Taiwan seeks trade agreement with Singapore
Fri, Aug 06, 2010
The China Post/Asia News Network

TAIPEI, TAIWAN - The announcement of bilateral trade talks between Taiwan and Singapore met with a relatively understated response from mainland China yesterday - a major breakthrough which could mean the island will be able to hold negotiations with international economies without the political hurdles of the past.

In what amounts to an effort to circumvent the thorny issue of Taiwan's international political status, the joint statement from the Taipei Representative Office in Singapore and the Singapore Trade Office in Taipei yesterday morning stated that agreements have been reached to explore the feasibility of an economic cooperation agreement between the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei) and Singapore, both members of the World Trade Organization (WTO).

Vanessa Yea-ping Shih, Taiwan's representative to Singapore, said the news highlighted Taiwan's efforts to participate in regional economic integration.

President Ma Ying-jeou's spokesman, Lo Chih-chiang, said the President expressed satisfaction with the work of the administrative team as it has begun negotiations with Singapore on an economic cooperation deal shortly after concluding a landmark economic cooperation framework agreement (ECFA) with China. The president had argued in the past that part of ECFA's purpose was to broaden Taiwan's international reach through economic talks.

Lo said this is in keeping with the president's promise to start talks with Taiwan's other major trading partners after securing the ECFA with China.

Taiwan's economic development will significantly benefit from a comprehensive economic cooperation accord with Singapore, a regional economic powerhouse strategically located in Southeast Asia and Taiwan's sixth largest trading partner, Lo said.

Moreover, he said, Taiwan can build closer economic relations with other major trading partners on the foundation of a trade agreement with Singapore, which already has agreements with many other countries including India, Japan and members of the Association of Southeast Asian Nations (ASEAN).

In what was regarded by many as a low-key response, a spokesperson for mainland China's Taiwan Affairs Office (TAO) said that Beijing ?elieve Singapore will continually adhere to the one China principle in its handling of trade relations with Taiwan, and that Taiwan will uphold ?ommon political grounds reached by both sides of the Taiwan Strait to maintain the peaceful development of Taiwan-China relations.

China's Foreign Ministry spokesperson Jiang Yu said that the mainland's position has been consistent and unequivocal regarding the economic exchanges and trade between Taiwan and foreign countries.

Jiang said China hopes elevant countries continue to abide by the one China principle and handle relevant affairs prudently.

The statements signify a hands-off approach by China when responding to Taiwan's trade negotiations with international economies -- as long as both sides observe the one China principle.

However, that does not mean future trade talks with not be met with intervention from China. While Taiwanese media such as the Central News Agency interpreted China's position yesterday as not blocking Taiwan's outreaches as long as the so-called 2 Consensus is adhered to. The policy is a compromised agreement reached by Taiwan and mainland China in 1992, in which both sides accept the existence of only one China but can apply their own interpretations to the phrase. The statements by mainland officials used the term one China principle, which according to Beijing's White Paper in 2000 can mean that the People's Republic of China is the only legitimate representative of China in international occasions.

To highlight Taiwan's sovereignty in pursuing its trade deals, Lai Shin-yuan, head of Taiwan's Mainland Affairs Council, said at a speech in Washington that China does not have the right to decide whether Taiwan can make free trade agreement (FTA) deals with other trade partners. Such rights belong to Taiwan as a member of the World Trade Organization, she said.

Nevertheless, the top China policy maker also expressed that many nations have shown an interest in free trade talks with Taiwan after it signed the ECFA with China.

Shih, Taiwan's representative to Singapore, told Central News Agency that the government has made trade agreement negotiations a priority task to prevent Taiwan from being marginalized in the process of regional economic integration.

Singapore, as Taiwan's fifth-largest export market and one of its top 10 trading partners, is on top of Taiwan's wish list of countries with which to sign trade cooperation agreements, she added.

The previous trade talks between Taiwan and Singapore in 2004 were stalled in part because the two sides failed to agree on the name of the trade agreement. As to the title of the agreement, Shih said that Singapore has been very flexible in naming the 15 trade agreements it has signed with other nations such as the Closer Economic Partnership (CEP) Agreement with New Zealand, the Comprehensive Economic Cooperation Agreement (CECA) with India, and the Economic Partnership Agreement (EPA) with Japan.

Shih said the two parties will study the feasibility of a trade pact under the WTO framework. Since agricultural exports to the city state, which only has a small agriculture industry, will not be an issue, Shih suggested that the negotiation process will be simpler due to less impact on the agricultural sector.

A Taiwan-Singapore trade agreement will have little impact on both sides in terms of tariffs, which are generally low or exempted already. Taiwan's financial and logistics industries may have more to gain if the trade pact eases regulations to allow Singapore companies to be listed on the island, thereby simplifying the custom clearance process.

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