Taiwan has thrown its support behind a proposed Pacific Rim free-trade zone and considers APEC a key forum to achieve this, according to a senior Taipei official.
The Asia-Pacific Economic Cooperation forum, whose latest gathering kicked off Sunday in Yokohama, will culminate with its annual summit this weekend, involving 21 member economies, including China, the United States, Vietnam and Australia. APEC is one of the few international gatherings where Taiwan has representation.
Cho Shih-chao, director general of the Bureau of Foreign Trade under the Taiwanese Ministry of Economic Affairs, stressed the importance of APEC to his government and its strong dedication to contribute to the framework.
“Due to political realities, APEC and the WTO (World Trade Organization) are two of the most international organizations we attend,” Cho said in an interview with The Japan Times earlier this week. “Unfortunately, we are not able to attend the Group of 20 meetings or the OECD (Organization for Economic Cooperation and Development), even though we’d like to. As a result, we treasure our participation in APEC.”
Taiwan has been a member of APEC since 1991. Cho said Taiwan has actively undertaken steps to slash tariffs and open its service sector in an effort to reach APEC’s ultimate goal of trade and investment liberalization. It also launched the APEC Digital Opportunity Center project in 2004 to enhance the information and communications technology of member economies in an attempt “to transform digital divide into digital opportunity.”
“Some APEC members are way behind in terms of digital development, quite significantly,” Cho said. “So we think we need to act to narrow down this digital divide.”
Participants at this year’s APEC summit are expected to focus on “possible pathways” for the U.S.-proposed Trans-Pacific Partnership free-trade agreement.
While some APEC economies have reached bilateral free-trade agreements, experts have highlighted their exclusive nature and have called on the regional parameters to be expanded.
Bilateral economic partnership agreements and FTAs are “not a good way to develop trade facilitation and liberalization,” Cho said, adding a free-trade accord covering the entire Asia-Pacific region would bolster trade by easing import-export restrictions.
Taiwan, however, is concerned that it may be left on the sidelines of the APEC summit due to political pressure from China.
“Legally speaking, as a member of APEC and the WTO, we have the right to enter into any free-trade agreements,” Cho said. “But practically, because of the global political situation, we may have a little bit of difficulty in doing so.”
In the past, China has opposed Taiwan’s participation in international organizations. To ease Chinese diplomatic concerns with regards to APEC, the island is officially listed under the name “Chinese Taipei,” as it also is in the Olympics.
Cho noted, however, that China-Taiwan relations have improved significantly in recent years, especially since Taiwanese President Ma Ying-jeou took office in 2008. Under Ma’s leadership, Taiwan has taken a number of steps to strengthen ties with Beijing, including direct commercial flights between the two rivals.
In June, the two governments signed the historic Economic Cooperation Framework Agreement, which obliges China to cut import tariffs on about 540 goods and services worth an estimated $14 billion. On the flip side, the agreement requires Taiwan to slash tariffs on around 270 imported products worth $3 billion.
“(The ECFA) was a very positive development because it (established) a predictable and systematic way of doing business with China,” Cho said. “The ECFA provides a really good opportunity for mutual benefits.”
The international spotlight has recently focused on the rise of China, which has not only become the world’s second-largest economy but is also increasing its political and military influence.
But Cho said Ma doesn’t consider China a threat.
“Our president adopted the so-called pro-China policy and he sees China as an opportunity instead of a risk,” Cho said.
In recent weeks, China-Japan ties have become extremely strained over a run-in near the Japan-controlled Senkaku Islands in the East China Sea. The uninhabited islets are also claimed by China, as well as Taiwan. Taipei is also involved in territorial disputes with Beijing over other islands in the South China Sea.
Cho declined comment on these territorial rows and only stressed that Japan-Taiwan relations are getting stronger.
According to Foreign Ministry data, Japan was the largest import source for Taiwan in 2009. What’s more, about 1 million people from Japan visited Taiwan in 2009 and 1.02 million Taiwanese visited Japan.
“We have a solid relationship with Japan at all different levels — economic and trade levels, as well as people going back and forth,” Cho said. “We’ll only get better and better in future.”