• Wed
  • Apr 16, 2014
  • Updated: 2:12pm
BusinessEconomy

Taiwan, Singapore sign free trade agreement

PUBLISHED : Thursday, 07 November, 2013, 2:35pm
UPDATED : Friday, 08 November, 2013, 4:05am

Taiwan signed a free trade deal with Singapore yesterday, its first with a Southeast Asian country, as the diplomatically isolated island steps up efforts to join regional economic blocs.

The "economic partnership agreement" was signed in Singapore just months after Taiwan struck a similar deal with New Zealand, its first with a country that has diplomatic ties with the mainland.

"The agreement will further boost trade liberalisation and internationalisation for Taiwan and create beneficial conditions for our entry to the TPP and the RCEP," Foreign Minister David Lin said in Taipei.

Taiwan has been pursuing bilateral trade deals to prepare for joining proposed multinational free trade blocs such as the Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership.

Under the deal, signed after three years of negotiations between the sides, Singapore will immediately remove custom duties on all products imported from Taiwan, according to Taiwanese authorities.

Taipei will immediately eliminate customs duties on 83 per cent of goods imported from Singapore, while duties on other products will be removed over a period ranging from five to 15 years.

Forty agricultural products such as rice and pineapples are excluded.

Singapore, like most countries, officially recognises Beijing rather than Taipei and already has a free trade deal with the mainland.

Singapore is Taiwan's fifth-largest trade partner and fourth-largest export market, with bilateral trade totalling US$28.2 billion in 2012.

In 2011 Taiwan forged an investment protection agreement with Japan as Beijing relaxed its previous strong opposition to economic deals between the island and third parties.

The change in the mainland's policy followed the signing of the sweeping Economic Co-operation Framework Agreement between Beijing and Taipei in 2010.

Beijing still considers Taiwan as part of its territory awaiting reunification even though the two entities have been governed separately since 1949.

Many Taiwanese fear that increasing dependence on the mainland market gives Beijing leverage that could ultimately be used to undermine Taiwan's de facto independence.

About 40 per cent of Taiwan's total trade is with the mainland.

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