Taiwan's textile, electronics sectors to suffer most from AFTA's inclusion of China, Japan, S. Korea

Taipei, Jan. 21, 2005 (CENS)--After mainland China, Japan, and South Korea join the Free Trade Agreement of the Association of Southeast Asian Nations (ASEAN), Taiwan's textile and electronics industries will bear the brunt of the resultant impact, according to Ministry of Economic Affairs (MOEA).

The Industrial Development Bureau (IDB) under MOEA recently commissioned Chung-Hua Institution for Economic Research (CHIER) to study the possible influences on Taiwan's industries from after ASEAN Free Trade Agreement (AFTA) includes mainland China, Japan and S. Korea.

The study report showed that if AFTA plus the trio, Taiwan's economic and trade development may be hard hit. The island's external trade will decline for sure, particularly of such industries as textile, plastics & chemicals, and electronics, which together may see exports by US$2.36 billion a year. As a result, the island's gross domestic product (GDP) will shrink by 0.98% or US$6.97 billion.

Furthermore, if taking agricultural and industrial products into consideration, Taiwan's real GDP is estimated to edge down by 0.1%, the production value of industries to decrease by US$720 million, and total export trade to shrink by US$234 million. The electronics industry alone is estimated to see a drop of US$243 million in production value and US$202 million in export value, both the highest figures of their kinds among local industries.

If AFTA includes only the mainland, Taiwan may suffer less than from the inclusion of the trio. If only the mainland joins the AFTA, Taiwan's GDP may fall by 0.2% and total production value by US$1.4 billion. The textile industry may record the largest output shrinkage of US$325 million; and Taiwan's total exports may decline by US$446 million, with the electronics industry to see the largest fall of US$259 million.

Other industries that will also be influenced include semiconductors, basic chemical materials, petrochemical materials, plastic & refined petroleum products, cotton & related woven products, synthetic fibers, knitted woven products, and basic steel & iron products.


In terms of the impact on the island's employment, the domestic job market is predicted to see an additional 14,154 persons become jobless, with the semiconductor industry to account for 1,761 persons and the textile industry 1,545 persons.