The KFTA and Taiwan

The Taiwanese are concerned about the impact of the Korea-U.S. FTA on their competitive position in the U.S. market: Taiwan`s textile industry to be hit by South Korea-US FTA (Textile News, July 19):

The textile industry is among a number of Taiwanese industries expected to be hit by the South Korea-U.S. Free Trade Agreement (FTA), and the government and industries will have to take precautionary measures to mitigate its impact, researchers said Thursday. Taiwanese industries that are expected to be hardest hit by the South Korea-U.S. FTA include textiles, machinery, liquid crystal display televisions (LCD TV), plastics and auto components industry, researchers from the Chung-hua Institution for Economic Research (CIER) said in a seminar discussing relevant issues.

The textile industry, especially the clothing sector, is expected to take the hardest hit among all industries, said researcher Lin Jun-fu.

Taiwan's mid and lower-priced machinery products are also encouraged to work on product differentiation and value-added aspects to mitigate the impact of the FTA, researcher Chen Jia-le said.

The U.S. and China have just completed "productive talks" on trade and investment in Washington (Taiwan, US hold 'productive' talks, Annie Huang, Taiwan Journal, July 20):

Taiwan and the United States completed bilateral talks under the Trade and Investment Framework Agreement in Washington, D.C. July 11. They exchanged opinions on economic cooperation and agreed to launch the Consultative Committee on Agriculture, a new mechanism for dealing with bilateral food and agricultural issues.

The two-day meeting starting July 10 was the sixth under TIFA since it was signed in 1994 to resolve bilateral trade issues. Taiwan's delegation was led by John Deng, chief representative of the Office of Trade Negotiations under the Ministry of Economic Affairs, and that of the United States by Deputy U.S. Trade Representative Karan Bhatia. A wide range of issues was covered, including agriculture, pharmaceuticals, intellectual property rights and the bilateral investment climate, according to a July 12 news release posted on the American Institute in Taiwan's Web site.... 

The meeting did not produce a positive result on signing a Taiwan-U.S. free trade agreement, however. Conditions were not ripe for talks on the FTA since the Trade Promotion Authority expired in June, Stephen Norton, spokesperson of the Office of the United States Trade Representative, stated in the EDN report.

The TPA, the "fast track authority," was granted by the U.S. Congress to the administrative branch for FTA negotiations, which the U.S. Congress had to ratify or reject within 90 days and without leeway to amend provisions under the agreements. The U.S. government inked an FTA with South Korea before the TPA expired, which is awaiting passage by Congress.

Deng expressed concern about the U.S.-South Korea FTA, which, it was considered, would have an impact on Taiwan, since the United States represented a major market for both Asian countries. "Taiwan is happy to see the U.S.-South Korea FTA in place, but Taiwan's development opportunities must not be hobbled by the pact and Taiwan has to make comprehensive preparations to deal with the situation," Deng was quoted as saying in a July 12 report by Taiwan's Central News Agency.

Stressing that the United States would team up with Taiwan to reduce the adverse effects of the U.S.-South Korea FTA, Deng maintained the ROC government still strongly advocated signing an FTA with the United States, and continued efforts would be made to call for support from U.S. businesses and Congress, according to another July 12 CNA report.