Economies in both Taiwan and the EU would greatly benefit from the implementation of full-fledged trade enhancement measures (TEMs), similar to those in a free trade agreement (FTA), an international economics consultancy firm commissioned by the European Chamber of Commerce Taipei (ECCT) said yesterday.
Trade barriers between Taiwan and the EU result in 12 billion euros (US$16.6 billion) in lost business opportunities per year for European exporters to Taiwan and 10 billion euros for Europe-bound Taiwanese exports, a Copenhagen Economics report said yesterday.
The local economy would see an estimated annual GDP boost of 1.2 percent or 3.8 billion euros in exports to the EU, while the EU would see an increase of 2 billion euros or 0.02 percent GDP in Taiwan-bound exports if an FTA or full-fledged TEMs were implemented in three to five years’ time, the report said.
“The EU should consider saying ‘yes’ to Taiwan if Taiwan knocked on the door and asked for initiation of discussions on TEMs,” Martin Thelle, partner of Denmark-based economics consultancy Copenhagen Economics and the report’s author, told a media briefing in Taipei yesterday.
Thelle, who previously wrote an evaluation report for the FTA between the EU and South Korea, yesterday said that “Taiwan, in relative terms, is just as attractive as South Korea” even though its economy is smaller and Taiwan would be negatively affected by an EU-South Korea FTA.
Under the EU-Taiwan pact, what would make Taiwan additionally valuable would be its special role as a stepping stone for European businesses interested in branching into China, he said, adding that China would also benefit from a stronger Taiwan economy although Chinese exports to the EU would encounter direct competition.
In the long run, the trade pact would further help enhance European productivity and competitiveness by opening trade with Taiwan, a technology powerhouse, while creating more opportunities for Taiwanese electronic and machinery exports to Europe once preferential tariffs were imposed, the report said.
After the nation’s economics ministry expressed similar interest in forging closer trade ties with the EU, Guy Wittich, CEO of the ECCT, yesterday said that the chamber had sent the lengthy report to EU headquarters last week and expects to receive a preliminary response by next week.
The chamber also expects to soon conduct discussions with European officials during its trip to Europe, he said.
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