TAIPEI (Taiwan News) — The expected finalization of the Regional Comprehensive Economic Partnership (RCEP) by the end of 2020 is likely to have a serious impact on the private sector of Taiwan, local experts have warned.
RCEP negotiations — a free trade agreement for nations in the Asia Pacific — made significant progress in 2019 after its launch in 2012. The trade pact is set to be signed by 15 member states in the region, including China, Japan, South Korea, Australia, New Zealand, and 10 ASEAN nations, despite India opting out last year, according to the Nikkei Asian Review.
With Taiwan blocked from participating in the trade bloc, local firms would seek to move out to avoid tariffs, said Tsai Lien-sheng (蔡練生), secretary-general of the Chinese National Federation of Industries (CNFI), at a symposium on ECFA Wednesday (Aug. 26). RCEP members accounted for 59 percent of Taiwan’s trade in 2019, wrote China Times.
Tsai called for a government-led response to the potential fallout of the trade arrangement, by assisting companies to relocate to Southeast Asia and countries like Mexico. The plans can be realized, for example, by inking investment agreements with target countries and setting up industrial parks to accommodate Taiwanese businesses.
The relocation efforts should not affect Taiwan’s aim to emerge as a global hub for research and development, Tsai reckoned.
Kao Koong-lian (高孔廉), former vice-chairman of the Straits Exchange Foundation, advised authorities to conduct a survey about the needs of different industries and incorporate financing as well as other resources for companies planning to move out. He also made a case for Taiwanese businesses in China, which are capital and technology-intensive as well as making high-value products, to return amid the global supply chain shift spurred by the COVID-19 pandemic.