Economics Ministry Pushing the Signing of ECA with EU

Taipei, May 26, 2011 (CENS)--With the free trade agreement (FTA) between Korea and the European Union going to take effect on July 1, Liang Kuo-hsin, vice economics minister, will visit the EU headquarters in June to express the wish of signing an economic cooperation agreement (ECA) with the EU.

The Ministry of Economic Affairs (MOEA) believed that the FTA between Korea and the EU will impact Taiwan's textile, machinery equipment, and plastics/rubber industries most severely.

The MOEA pointed out that the FTA between Korea and the EU will trigger a trade and investment transference effect, enabling Korean firms to solicit orders from the EU at lower prices and encouraging European firms to invest in Korea, at the expense of Taiwan's interests.

An MOEA official noted that Taiwan and Korea have high extent of similarity in their exports to Europe, especially for information-communications, machinery, and auto parts. Most ICT products are entitled to free tariff for exports to Europe, according to the Information Technology Agreement (ITA). However, textile, machinery, and plastics/rubber products will continue to be subject to higher tariff in the EU, including 12% for textile and 6.5% for plastics/rubber.

To alleviate the impact, the MOEA has dispatched a number of delegations to the U.K., Belgium, France, Germany, Italy, Holland, and Denmark this year, lobbying the signing of ECA between Taiwan and the EU. On May 11, the European Parliament passed a resolution supporting the signing of ECA between Taiwan and the EU.

In addition, the MOEA is also pushing the signing of ECA with the U.S., Japan, and Singapore. In fact, Taiwan has entered the stage of substantive talk for ECA with Singapore, which is expected to be signed in one year.