cens logo

TAMI President Fears Out-migration of Taiwan's Machinery Makers to China

2014/08/08 | By Ken Liu

J.C. Wang, president of the Taiwan Association of Machinery Industry (TAMI), J.C. Wang, said at a meeting held recently by the National Development Council and Taiwan's Cabinet that he fears the island's machinery manufacturers may migrate to China or the Association of Southeast Asian Nations (ASEAN) once the Sino-S. Korea Free Trade Agreement (FTA) takes effect .

The meeting was also attended by representatives from the island's steel, dyeing, appliance, and laundry associations.

Wang says that China is Taiwan's biggest market for machines, absorbing around 30% of the island's US$20 billion in annual machinery exports. Around two-thirds of the 700-800 types of machine Taiwan exports to China are levied tariffs up to 8%, with the remaining one-third at  4-7%, and around 100 items being duty-free as allowed under the prioritized list of the Economic Cooperation Framework Agreement (ECFA) signed in 2010 between Taiwan and China.

China and South Korea will sign the agreement by the end of this year and put it into effect in July 2015. Since machinery exports from Taiwan and South Korea to China overlap greatly, Wang estimates Taiwan's machinery industry to lose around US$7 billion in business to South Korea yearly in the Chinese market, and the machine-tool sector to lose an estimated US$1.2 billion.

Wang sees Taiwan's machinery makers to migrate to wherever duties can be saved, namely China and ASEAN, and urges the government to speed negotiations with China to sign the goods and services trade agreement to minimize any foreseeable impact. (KL)