A free trade agreement between South Korea and China could knock down Taiwanese textile exports to China to the tune of US $324 million per annum.
According to the Taiwan Textile Federation (TTF), through the FTA, 85 per cent of South Korean textile exports to China may be granted duty-free status in the future,” Focus Taiwan reported.
TTF conservatively estimates the loss to Taiwanese textile exports to China at $324 million or even more, once the FTA between South Korea and China is implemented.
The TTF said currently Taiwan mainly exports fibres, yarns and fabrics to China, while South Korea ships fibres, apparels and accessories among the major items.
China and South Korea had announced earlier this month that they have concluded talks on the FTA, which is expected to go into effect in mid-2015.
The announcement has given rise to concern among Taiwanese textile exporters over South Korea's rising competitive edge in the huge China market.
As per a recent Taiwanese government assessment, among many goods, Taiwanese produced petrochemicals, textiles, machine tools and steel exports may be mainly impacted from the FTA.
The government said the FTA could hit total Taiwanese exports by 1.35 per cent or $3.75 billion per annum.
TTF said Taiwan should speed up the pace of signing a trade-in-goods agreement with China in a bid to stem the adverse impact of the China- South Korea FTA.
Earlier in January 2012, fibre2fashion had reported that a potential China-South Korea FTA, is likely to impact Taiwanese exports of more than 2,000 items to China, besides textiles. (AR)