The fifth biggest economy in Asia looks to strengthen economic agreements with Central and South American countries
The subject of trade between Latin America and Taiwan often takes the backseat to headlines that revolve around the Asian country’s diplomatic adventures and alliances in Latin America. Indeed, the abrupt end to Panamanian-Taiwanese diplomatic relations in June 2017 thrusts Taiwan back IGNORE INTO regional spotlight. Since Panama represents one of just a handful of countries to have a Free Trade Agreement (FTA) with Taiwan, many wonder what the breakdown in diplomatic relations means for the trade deal. The mid-July economic cooperation agreement with Paraguay also sparks some curiosity IGNORE INTO what Asia’s fifth largest economy brings to the table in terms of trade. These recent developments present a good opportunity to highlight a few characteristics of Taiwan’s trading relationship with the region.
With regards to Panama, Taiwanese Foreign Affairs Ministry spokeswoman Eleanor Wang confirmed on July 11th that although bilateral treaties would cease to exist immediately the FTA was to remain intact until a further agreement could be reached. Taiwan’s other FTA partners in Latin America include Guatemala, Nicaragua, El Salvador and Honduras. FTAs with Paraguay and the Dominican Republic have been explored but complications while negotiating have left the countries to settle on basic economic agreements instead. Countries with FTAs have seen the benefits in trading with Taiwan. Guatemalan Exporters Association Director Amador Carballido revealed that from 2012 to 2016 exports to Taiwan generated an additional US$290 million and noted a substantial increase in sales of sugar, coffee, confectionary, fish, spices and fresh fruit, among other products.Taiwan’s most important trading partners in the region are Brazil, Mexico and Chile.
With population of over 23 million and a lack of abundance in natural resources, Taiwan is consistently in search of raw materials to source its food supply, construction and manufacturing industries. Latin America has a lot of the raw products Taiwan needs, so the Asian country needs to import products such as soybean, corn, coffee, cotton, copper, iron ore, granite and wood. Due to a lack of diplomatic presence, Taiwan has set up unofficial commerce offices in many major cities in hopes of attracting trade. Taiwanese trade delegations routinely crisscross Latin America, visiting trade shows and giving presentations for potential buyers of its main exports including chemicals, optical devices, machinery, plastics and a variety of computers, tablets and other electronics.
Most recently, Taiwan stepped up efforts to increase connectivity with Latin America and the Caribbean. On the 12th of July 2017, the Taiwanese Ministry of Foreign Affairs announced the easing of visa restrictions to all eleven diplomatic partners in the region. Taiwan hopes the move will not only boost tourism, but also encourage new opportunities for trade and future growth.
Latin American Post | Eric Smoley
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