Taiwan eyes free trade pacts to stay competitive

A successful conclusion to the World Trade Organisation's long-running Doha round of market-opening talks could achieve in one fell swoop what many FTAs would achieve by cutting tariffs globally for all signatories to a deal.

But even if those talks succeed, Taiwan's exports would still be at a disadvantage in countries that undercut WTO tariff rates through bilateral FTAs.

Taiwan needs to act quickly to avoid damage to its exports, the mainstay of its economy, from two of the biggest recent deals, one between South Korea and the United States still awaiting ratification, and the other between China and ASEAN.

Those agreements could hurt the textile, chemicals and plastic sectors, accounting for a fifth of Taiwan's exports, analysts said.

"Even if a Doha trade deal is reached this year, Taiwan's exporting products will still lose out trying to compete with countries that have signed FTAs," said Chaw-hsia Tu, a deputy executive director at the Chung-hua Institution for Economic Research's WTO Center.

"For sure Doha will bring down some of the tariffs, such as textiles, but there is no way they'll be cut to zero like in some of the FTAs, such as the U.S.-Korea deal. The U.S. and Korea will have to cut their tariffs to zero in 10 years under the bilateral pact."