Agreement Taiwan Spare

As main­land China‘s glob­al pres­ence will con­tin­ue to grow in the com­ing years, it could also shape the agen­da of glob­al trade stan­dards by mul­ti­lat­er­al insti­tu­tions for the ben­e­fit of their own indus­tries. The forum for­mal­ized with ASEAN in main­land Chi­na by the ASEAN+3 meet­ing (ASEAN, Chi­na, South Korea and Japan) undoubt­ed­ly con­tributed to the […]

As main­land China‘s glob­al pres­ence will con­tin­ue to grow in the com­ing years, it could also shape the agen­da of glob­al trade stan­dards by mul­ti­lat­er­al insti­tu­tions for the ben­e­fit of their own indus­tries. The forum for­mal­ized with ASEAN in main­land Chi­na by the ASEAN+3 meet­ing (ASEAN, Chi­na, South Korea and Japan) undoubt­ed­ly con­tributed to the cre­ation of a free trade agree­ment between them. Since ASEAN is a pro­duc­tion tar­get in its own right, this could become increas­ing­ly impor­tant, giv­en that the cost of labor con­tin­ues to rise in Chi­na. What does this mean for imports from Tai­wan or main­land Chi­na? If you come from one of the hap­py coun­tries that share a free trade agree­ment with Chi­na, you may see low­er import costs from main­land Chi­na than Tai­wan. Their sup­pli­ers in main­land Chi­na can also find sub­con­trac­tors and buy com­po­nents and raw mate­ri­als cheap­ly and more eas­i­ly from ASEAN coun­tries. Indeed, main­land Chi­na has now signed 16 free trade agree­ments (SAAs) and is in force with impor­tant part­ners, includ­ing coun­tries of the Asso­ci­a­tion of South Asian Nations (ASEAN) and Aus­tralia. Tai­wan has only sev­en, most­ly with diplo­mat­ic allies in Cen­tral Amer­i­ca. South Korea, a major com­peti­tor of Tai­wan, also has 16 free trade agree­ments, includ­ing impor­tant part­ners such as the Unit­ed States, the Euro­pean Union, Cana­da and ASEAN. The U.S. Air Force intends to deter­mine sources capa­ble of sup­ply­ing spare parts for Taiwan‘s fleet of Northrop F‑5E fight­ers. (This agree­ment was marked by SICE in HTML. You can find a PDF ver­sion here.) The inter­nal pro­duc­tion net­works of an econ­o­my are impor­tant, but also their glob­al network.

Due to Taiwan‘s con­tro­ver­sial diplo­mat­ic sta­tus, its posi­tion in glob­al trade can some­times be frag­ile. Tai­wan is often lim­it­ed to nego­ti­at­ing bilat­er­al agree­ments with coun­tries on an indi­vid­ual basis, which some trad­ing part­ners avoid due to polit­i­cal pres­sure from main­land Chi­na. 498 F‑5s are still in ser­vice world­wide, includ­ing the Tai­wanese fleet. The oth­er main oper­a­tors of the Cold War are South Korea (133), the Unit­ed States (55), Brazil (47), Switzer­land (36) and Thai­land (34). Tai­wan may not be the best choice if you want to make labor-inten­sive cloth­ing like made-up cloth­ing. While main­land Chi­na is con­sid­ered one of the top four Asian regions for cloth­ing man­u­fac­tur­ing. On the oth­er hand, man­u­fac­tur­ers in the elec­tron­ics, machin­ery, plas­tics, and med­ical tech­nol­o­gy indus­tries often per­ceive Tai­wan as an attrac­tive alter­na­tive to main­land Chi­na. Data from the Inter­na­tion­al Mon­e­tary Fund (IMF) shows that Tai­wan is almost three times more pro­duc­tive than main­land Chi­na. The increase in GDP per capi­ta usu­al­ly leads to an increase in liv­ing stan­dards and eco­nom­ic growth. Tai­wan is one of the advanced economies like Ger­many and Aus­tralia for GDP per capita.

While the num­ber of main­land Chi­na places it among devel­op­ing coun­tries like Thai­land and Mex­i­co. Tai­wan is also on the side­lines of many trade nego­ti­a­tions in the Asia-Pacif­ic Eco­nom­ic Coop­er­a­tion (APEC), ASEAN and Trans-Pacif­ic Part­ner­ship (TPP) forums due to restric­tions imposed by the main­land government.… 

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