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Taiwan May See US$2B. Drop in Exports to China due to Potential Sino-Korea FTA

2014/07/21 | By Judy Li

Due to Chinese President Xi Jinping's recent visit to Seoul, China and South Korea have decided to try to ink free trade agreement (FTA) by the end of 2014, which has  made Taiwanese makers and exporters anxious due to the negative impact of such agreement.

Once signed, the agreement may reduce Taiwan's annual exports to China by about US$2 billion, with total industrial production value down US$4 billion or GDP lowered by 0.23%, and Taiwanese sectors to be battered to include LCD panels, machine tools, petrochemicals and iron & steel.

Economists in Taiwan say that the local  economy has over the last decade been dampened by severe political conflicts, with the opposition party impeding the ruling KMT's trade talks with China, resulting in the stalled inking of bilateral trade agreements, and granting S. Korea, Taiwan's major trade rival, the room for racing ahead to to sign trade agreements with China.

Economists advise Taiwan, an export-oriented island, to map out measures as soon as possible to deal with the aftermath of the foreseeable inking of FTA between China and S. Korea. (JL)