Taiwan's Textile Exports to China Are Likely to Be Hit by The China-Korea FTA

Taiwan’s textile exports to China are likely to be hit by the China-Korea Free Trade Agreement (FTA), negotiations for which are going to start soon, Taiwan’s Bureau of Foreign Trade (BoFT) General Director, Bill Cho, said. Besides textiles, China-Korea FTA is likely to impact exports of more than 2, 000 items to China, particularly when Korea has already inked similar agreements with the EU and the US. The China-Korea FTA would prove detrimental to Taiwan, especially if it takes form before the conclusion of cross-strait negotiations between Taiwan and China for further facilitations of mutual trade. According to the Ministry of Economic Affairs, industrial machinery, petrochemical materials, machine tools and textile goods are all included in the list of items whose exports from Taiwan to China overlap with those from Korea. Korea has been pitching for FTA with China ever since Taiwan inked an Economic Cooperation Framework Agreement (ECFA) with China in mid-2010. It is because a number of Korea’s export items to China coincide with those from Taiwan. For years, Taiwanese companies had been competing with Korean firms for retaining their share in the machine tools export market in China. However, inking of the FTA between China and Korea would turn the competition scenario in favour of Korean players in future. Still, the ECFA would enable Taiwan to continue shipping some of its machine tools and related parts to China, duty-free. Meanwhile, Cho said that though particulars and schedule of the China-Korea FTA negotiations are not apparent at present, the recent decision of China and Korea to commence mutual FTA negotiations has raised the concerns of Taiwan. He added that BoFT is taking the matter seriously and it would assess the impacts that the agreement would have on Taiwan, and would try to find out ways to ease those impacts, even before the FTA comes into effect. Source: fibre2fashion.com