Taiwan’s bid to join the Trans-Pacific Partnership (TPP), a United States-led trade bloc, will need the support and consent of the 12 member countries and “no opposition from China” if it is to succeed, Taiwan’s economic affairs minister, John Deng, said Wednesday.
The US and 11 other Pacific Rim countries concluded TPP negotiations on Oct. 5 after more than five years of negotiations. The trade bloc covers about 40% of the global economy.
Only if Taiwan can achieve the two conditions will it have a chance to join the trade bloc, the minister said in an interview with a local radio station.
Deng said the degree of openness of the TPP is extremely high with few exceptions, and the transition period during which tariffs have to be cut to zero or 5% is five or 10 years, shorter than for most free trade agreements.
Deng admitted that several countries have adopted a cautious attitude toward Taiwan’s bid to join the trade bloc, and considering that China is the biggest trading partner of six of the 12 participating countries, “it’s inevitable that they will have some concerns.”
But he also said Taiwan is a big market that imports US$200 billion to US$300 billion worth of goods a year, and the opportunity to join the bloc does exist.
Deng cautioned that Taiwan will eventually have to address the hot-button issue of importing US pork as part of its bid even though the situation has not yet reached that stage. Taiwan currently does not allow US pork that contains ractopamine, a leanness-enhancing drug that is banned in Taiwan, to be imported into the country.
Domestic hog farmers have been particularly vocal in their opposition to US pork imports, questioning the safety of the meat and worrying about the impact imports would have on their business.
The minister said every country adopts the same approach in mitigating the potential disruption of free trade agreements, by helping vulnerable sectors maintain or boost their competitive edge.
Deng also warned that Taiwan’s industrial sector will come under severe pressure after a free trade agreement signed by China and South Korea in early June comes into effect.
He said many businesses have expressed the hope that progress can be achieved on a cross-strait trade-in-goods agreement to offset the threat of the China-South Korea free trade deal.
Deng cited the eyeglasses sector as an example, noting that the import duty on eyeglasses in China is 20%, compared with only 5% in Taiwan.
If tariffs on both sides could be cut to zero, then Taiwan’s competitive edge would be strengthened and local companies could stay put in Taiwan without having to move to China, Deng said.