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China-South Korea free trade deal to hurt Taiwan's economic growth

China-South Korea free trade deal to hurt Taiwan's economic growth

Taipei, April 10 (CNA) A free trade agreement between China and South will begin to hurt Taiwan's economy within a year after it takes effect, as South Korean products made cheaper by lower tariffs gain an edge over Taiwanese goods in China, the Ministry of Economic Affairs said Friday. Taiwanese exporters are expected to lose an estimated US$6 million to US$17 million in orders to South Korean rivals in the year after the pact takes effect, pulling down economic growth by 0.04 percent, according to a ministry report on the deal's impact on Taiwan. Losses will increase to between US$1.92 billion and US$4.25 billion within a decade after the agreement is put in place, the report forecast. Taiwan's economic growth will tumble 0.15 percent annually two decades after the agreement takes effect, as losses amount to between US$2.31 billion and US$6 billion a year, the report said. On Feb. 25, China and South Korea completed the "initializing" of the agreement, with the two sides aiming for formal signing of the pact within the first half of 2015.
The agreement is expected to hurt Taiwanese manufacturers of petrochemical, textile and steel products as well as automobiles, flat panels and machine tools. China is Taiwan's biggest export market, and Taiwan's government has consistently warned of the potential damage of the pact to the country's economy since a potential deal was first announced late last year. It has hoped the warnings would drum up support for Taiwan's own free trade negotiations with China, but a bilateral trade-in-services pact signed by the two countries in June 2013 has yet to receive legislative approval because of widespread opposition. (By Huang Chiao-wen and Scully Hsiao)


Updated : 2021-09-19 19:35 GMT+08:00