The ROC and Singapore inked an economic partnership agreement Nov. 7, a significant step forward in Taiwan’s bid for greater participation in regional economic integration, according to the Ministry of Foreign Affairs.
The Agreement between Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Partnership (ASTEP)—signed in the city-state by ROC Representative to Singapore Hsieh Fa-dah and his Singapore counterpart Calvin Eu—is Taiwan’s first free trade pact with a Southeast Asian nation.
“This landmark development, along with a similar pact concluded with New Zealand in July this year, will help pave way for Taiwan to join the Trans-Pacific Partnership and Regional Comprehensive Economic Partnership,” MOFA Minister David Y. L. Lin said.
The comprehensive and high-quality agreement also underscores Taiwan’s commitment to greater trade liberalization. “It fits strategically with ROC policy goals of pursuing regional integration and forging deeper connections with the Asia-Pacific and beyond.”
Lin also said Taiwan has wrapped up feasibility studies on similar agreements with India and Indonesia, and is close to completing another with the Philippines. “We are making an all-out effort to pursue trade negotiations with the country’s partners,” he added.
Comprising 17 chapters, including cooperation issues, dispute settlement, further trade liberalization, trade in goods and services, the ASTEP also includes provisions not covered under World Trade Organization agreements spanning competition, e-commerce and investment.
Under the agreement, tariffs will be removed immediately on 83.03 percent of imports from Singapore, with those on another 16.45 percent to be cut to zero over five, 10 and 15 years.
Import duties on Singapore cigarettes and tobacco will be reduced by 20 percent in five years, with 40 agricultural products, including deer antler velvet, dry mushrooms, pineapples and rice, excluded from the tariff concession list.
In return, Singapore agrees to eliminate tariffs on all Taiwan exports, including those on six types of alcoholic beverages, as soon as the ASTEP takes force. This represents a higher level of liberalization than what the city-state currently commits to under the WTO framework.
Both sides agree to meet and review progress within one year after the ASTEP takes effect, and will set up related committees and working groups to ensure effective implementation of all provisions.
According to a study by Taipei City-based Chung-Hua Institution for Economic Research, the ASTEP is expected to boost Taiwan’s exports and imports by US$782 million and US$719 million, respectively, over 15 years after the pact takes effect, creating more than 6,100 jobs in the process.
“As Singapore’s trade system adheres closely to international standards, the ASTEP will help bring Taiwan more in line with global practices and enhance the country’s national competitiveness,” Minister of Economic Affairs Chang Chia-juch said.
“The MOEA will work with related agencies in mapping out complementary measures and to help sectors potentially vulnerable to the trade pact cope with any possible impact,” Chang said.
According to the MOEA minister, Taipei and Singapore jointly announced in August 2010 their intention to conduct separate feasibility studies for an economic cooperation agreement and initiated negotiations in May 2011.
Chang said he hopes the ASTEP will be fast-tracked for legislative review as per the ANZTEC, with lawmakers giving the green light before the current session ends Dec. 30.
According to the latest ROC government statistics, Singapore is Taiwan’s fifth largest trading partner and fourth largest export market, while Taiwan is Singapore’s eighth largest partner and 10th biggest export market.
Bilateral trade hit US$28.2 billion in 2012, up 13.55 percent from the year before, with Taiwan enjoying a surplus of US$12 billion. (SFC-JSM)
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