Trading firms feel pinch from Iraqi war and SARS scare

Taipei, April 7, 2003 (CENS)--Over 41% of trading firms in Taiwan have felt the pinch from the longer-than-expected U.S.-led war in Iraq and many executives are concerned the new dampening factor of severe acute respiratory syndrome (SARS) will only aggravate the situation.

A survey by the Taipei Exporters & Importers Association on March 26, six days after the war broke out, shows that there is a general slide of incoming orders placed by foreign business partners. Up to 41% said the war has affected their business operations.

Up to 58% of the member companies list the "cargo transport" involving the rising shipment risks and insurance coverage costs as major negative factor that is weakening their export drive, and 55% see the slides in the export orders since overseas buyers have either suspended or postponed the placement of new orders.

Other negative factors cited by the executives of trading firms include the more complicated conditions in providing and negotiating price quotations, the supply of raw materials, the calculation of profit margins, the foreign exchange rate risks, the tightening credit lines by financial institutions, and maintaining punctual delivery as stipulated in contracts.

Nearly all of the firms express the view that the impact will be more severe as the war draws out longer. They have also become increasingly concerned about the SARS scare which is causing snowballing influence on business.

They hope that both the association, government agencies, and the export-promotion organizations like the state-funded China External Trade Development Council (CETRA) will help them gather timely economic and business information as well as provide assistance for them to win business contracts for post-war reconstruction projects in the Middle East.