CNFI Chairman Urges Taiwan to Speed Negotiations with China on Cross-Strait Service Trade Agreement

With the increasingly challenging global market, along with China and S. Korea being close to signing a free trade agreement (FTA), Rock Hsu, chairman of Taiwan's Chinese National Federation of Industries (CNFI),  urges the Taiwanese government to accelerate negotiations with China on striking a Cross-strait Service Trade Agreement.

At a presentation held recently for CNFI's 2014 white paper, Hsu warned that the China-Korea FTA, expected to be signed by the end of this year, will pummel Taiwan's steel, textile, petrochemical, plastics, glass, automotive, display panels and machine tool sectors, causing as much as US$38.6 billion worth of Taiwan-made products destined for China to be possibly replaced by Korean counterparts in the short term.

Hsu furthered that lots of ongoing national and economic development policies worldwide, such as U.S.'s AMP (advanced manufacturing partnership) and manufacturing regeneration, Japan's Abenomics, China's 12th Five-year Plan and emerging industry promotion projects, and Korea's new economic strategy, suggest a global trend for more aggressive development of domestic industries, or even protectionism, and supply chain integration. As such, the chairman alerted that Taiwan may lose in global competition without developing technological innovation and cultivating new competitive advantages to go upmarket in the future.

To help Taiwanese enterprises become globally competitive, Hsu said, the government should follow the U.S, Germany, Japan and Italy to enhance industrial added-value and help domestic industries boost value, which is especially relevant when Taiwan's global competitiveness based on thin-margin contract manufacturing has been gradually eroded for a couple of reasons.

Therefore, Hsu said, the CNFI hopes the government to stand its ground to push forward economic liberalization and sign FTAs with other countries, in addition to a cross-strait service trade agreement with China, so as to better help domestic enterprises explore overseas markets. (SC)