Taiwan Today

The Ministry of Economic Affairs has reached a consensus with domestic car manufacturers on allowing mainland China-made vehicles to be imported while protecting domestic firms from being sidelined. This conditional opening, which will establish quotas for mainland-sourced vehicles, will remove non-tariff trade barriers and be in line with regulations concerning the appellation of origin. An official at the MOEA pointed out that, Taiwan’s domestic market being too small, carmakers must rely on foreign sales in the medium to long term. However, after the Association of Southeast Asian Nations takes on new partners, industrial goods trading within the region will enjoy lower import tariffs of between 0 percent and 5 percent. Taiwan’s producers of cars and car parts will immediately face the risk of being marginalized in the wake of such a development. The administration of President Ma Ying-jeou has therefore decided to list automobiles as one of the topics to be discussed in the first stage of negotiations on an economic cooperation framework agreement with the mainland. To limit enterprises’ losses and maximize profits, the MOEA’s Industrial Development Bureau has held talks with Kuozui Motors Ltd., Ford Lio Ho Motor Co. Ltd., Yulon-Nissan Motor Co. Ltd., Yulon Motor Co. Ltd., China Motor Corp., Honda Taiwan Co. Ltd., Auto 21 Prince Motor Co., Sanyang Industry Co. Ltd., Taiwan Isuzu Motors Co. Ltd. and other manufacturers of car parts and accessories. The government has promised to not unconditionally open Taiwan’s market to mainland-made vehicles. The notion of using a quota system for mainland-made cars, it said, is comparable to Taiwan’s actions in the wake of its accession to the World Trade Organization, and the actual number of vehicles to be allowed from the mainland would become clear as cross-strait talks progressed. Taiwan will also ask the mainland to set up a comparable import quota for Taiwan-made vehicles. Should the two sides fail to maintain an equilibrium in their moves to open up, domestic manufacturers fear a tidal wave of lower-priced imports from the mainland would eat into local producers’ market share. Producers are expecting the Bureau of Foreign Trade to keep tabs on the situation. The second item on which the MOEA and car manufacturers have agreed is on the appellation of origin of mainland-made cars. They also concurred that mainland-branded vehicles not be allowed to be shipped to Taiwan from their production facilities in southeast Asian nations. In removing non-tariff barriers to trade, the mainland has required that vehicles to be imported for sale be subject to tests such as those currently in force in Taiwan on emissions, safety, noise and mileage. As these tests are time-consuming and add a considerable cost to the vehicles, the government is seeking to have Taiwan’s Automotive Research & Testing Center-issued certificates recognized by the mainland to receive its China Compulsory Certification Mark in lieu of such tests for domestically produced vehicles to be sold in the mainland. An industry professional shared that domestic car sales have fallen every year since 2006, with only 229,000 units being sold in 2008. Of these, 40,000 were imports. The mainland market, meanwhile, this year has—for the first time ever—broken the 10 million-unit mark, of which 400,000 were imports. (MJH)