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Economic Cooperation between Taiwan and the Philippines – State of Play and Prospects The 22nd Joint Meeting of Chinese-Philippine & Philippine-Chinese.

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Presentation on theme: "Economic Cooperation between Taiwan and the Philippines – State of Play and Prospects The 22nd Joint Meeting of Chinese-Philippine & Philippine-Chinese."— Presentation transcript:

1 Economic Cooperation between Taiwan and the Philippines – State of Play and Prospects The 22nd Joint Meeting of Chinese-Philippine & Philippine-Chinese Business Councils August 16 2012 Kristy Hsu Chung Hua Institution for Economic Research, Taiwan

2 Outline I. Taiwan-Philippine Economic Relations II. Taiwan’s ECFA and other ECA Negotiations III. Study on Taiwan-Philippine ECA Feasibility IV. Conclusion and Policy Recommendations

3 Taiwan-Philippine Economic Relations In 2011, TWN exported US$ 6.96 billion of goods to the Philippines; imported US$ 2.41 billion. Philippine ranks 8th and 22nd largest export market/import source for Taiwan, contributing to 2.26% and 0.86% of total exports/imports. Taiwan-Philippine trade increased by only 71% in the past decade, the slowest comparing to other ASEAN countries, except for Myanmar. As of end of 2011, Taiwan FDI in the Philippines amounted to US$ 1.95 billion, lagging far behind TWN FDI in Singapore, Thailand, Indonesia, Malaysia and Vietnam. Economic ties between the Philippines and China, Japan, Korea have been showing stronger growth. Taiwan and Philippine need to find momentum to revitalize economic relations.

4 Taiwan ’ s Exports to ASEAN+6

5 Taiwan ’ s Imports from ASEAN+6

6 Taiwan FDIs in ASEAN Countries (In terms of FDI amount)

7 Taiwan FDIs in ASEAN Countries (in term of numbers of projects)

8 Foreign Workers by Country Origins in Taiwan

9 Foreign Workers in Manufacturing Sector

10 Foreign Workers in Social Service/House Work

11

12 The ECFA and other ECA Negotiations Due to “One China Policy”, Taiwan had concluded only 4 FTAs with 5 Latin American countries: covering 0.2% of total trade. The Cross Taiwan Straits Economic Cooperation Framework Agreement (ECFA) was signed on June 29, 2010, between government-designated organizations, the SEF and ARATS. Following the Framework Agreement, both sides have signed an investment protection agreement on Aug. 9, and are negotiating an FTA of goods, FTA of services and a dispute settlement agreement. Singapore in Aug. 2010 announced to explore the feasibility of negotiating an ECA (the ASTEP), and New Zealand soon followed suit. Taiwan is conducting ECA study with India, Indonesia, Israel. The ECFA paved way for ECAs with important trading partners, under the “Singapore Model” – Taiwan will use “Taiwan, Penghu, Kinmen, Matsu Separate Customs Territory” or “Chinese Taipei” in the agreements.

13 The Study of a Taiwan-Philippine ECA The Rational - to find momentum to revitalize bilateral trade & investment relations and identify potential areas of cooperation, to enhance competitiveness while facing global economic downturn, to re- direct TWN FDI to Philippines and shape regional supply chains, to expand the Kaohsiung-Subic Bay Economic Corridor model and effects. The Format - CIER and PIDS will conduct the study separately. The Objectives - 1. to study pros and cons and elements of a bilateral agreement in order to enhance bilateral economic and trade relations; 2. to provide economic impact analysis and simulations results for both governments and to reflect business communities’ interests to facilitate promotion and negotiations of the ECA; 3. to provide policy recommendations, including possible content and approach of the ECA, adjustment measures, to both governments for future work of related government agencies.

14 Contents of the Study Overview of Taiwan-Philippine economic and trade relations Economic Effect/Impact Analysis of a Taiwan-Philippine ECA - Trade in Goods, Trade in Services, FDIs, etc. Agriculture: including cooperation of agro-industries Manufactured Industry Services in Trade - Financial services, ICT-related services, retail and distribution, education, tourism, etc. Investment - Current FDI, investment policy, Subic Bay Industrial Zone. Economic Cooperation - Human Resource Development, trade and investment facilitation and promotion, SME, technology cooperation, etc. Other Issues: environment, government procurement, competition policy, maritime services, cooperation in third market

15 Conclusions and Some Policy Recommendations Highly complementary in industry structure and trade profile; An ECA grants more benefits than impacts. Already success cases of TWN investors - Lite-On Semiconductor Corp, Coin Chemical Subic Inc., Tong Lung Metal Industry Co… Joint efforts to respond to world economy and rise of Asia Pacific economy. Explore a wider range of bilateral cooperation issues under the ECA or separately from ECA, for example, building an electronics industrial belt, etc. Support mechanism should also be created – platforms between key industries, joint venture capital fund, SME/entrepreneurship programs, BPO cooperation, etc. Enhanced cooperation in high value added agriculture and agro- based industries, green industry, ICT, electronics, services…

16 一、東亞區域經濟整合趨勢 ( ) ECFA Based on Baldwin, 2006

17 Thank You for Your Attention! Kristy Hsu Associate Research Fellow Taiwan ASEAN Studies Center, Taiwan WTO Center, CIER TEL: 886-2-27356006*318 Email: kristy@cier.edu.tw


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