C.C. Wang, president of the Taiwan Association of Machinery Industry (TAMI), warns that the island will lag South Korea in machine tool exports globally in three to five years if the Legislature fails to approve the service trade pact Taiwan has signed with China.
He notes that without such approval the government will have to indefinitely put on hold the negotiations with China on the commodity trade agreement in follow-up to the Economic Cooperation Framework Agreement (ECFA) signed between the two sides in 2010, which is crucial to export competitiveness of many of Taiwan's pivotal industries including machine tools.
Wang points out that after signing free trade agreements with European Union, the United States, India, and Association of Southeast Asian Nations (ASEAN), South Korea outdid Taiwan in machine-tool exports to these economies last year. He fears that Taiwan will be eclipsed by South Korea in global machine-tool markets in three to five years despite leading South Korea in exports last year.
Last year, Taiwan shipped US$400 million of machine tools to the United States, plunging 24.5% from 2012, versus South Korean exports to the States of US$455 million. To Germany, Taiwan's exports were US$120 million, decreasing 9.3% from 2012, compared with South Korea's US$144 million, surging 13.7%.
According to a South Korean association of the machine-tool industry, in 2013 the world's top-5 machine-tool makers by production revenue were China (US$24.6 billion), Germany (US$14.6 billion), Japan (US$12.3 billion), Italy (US$5.7 billion), and South Korea (US$5.3 billion). Taiwan dropped out of the list to the 7th place with revenue of US$4.53 billion.
In terms of export, Germany was the No.1 with revenue of US$10.4 billion, followed by Japan (US$8.9 billion), Italy (US$4.5 billion), Taiwan (US$3.5 billion), mainland China (US$2.8 billion), Switzerland (US$2.6 billion), and South Korea (US$2.2 billion).
Nevertheless, last year Taiwan's exports declined 16% year on year, deeper than South Korea's 13%. In the meantime, China gained 4% in the exports. (KL)
