Forthcoming trade deal between Taiwan and China could disadvantage South Korean petrochemical industry

Cross-strait trade ties between Taiwan and China are underway and have picked up pace. The materialization of ECFA (Economic Cooperation Framework Agreement) could disadvantage certain sectors of South Korean industry as these two countries are major competitors in significant industry sectors and could pit Taiwan against South Korea in China. South Korea’s petrochemicals, battery, textile industry are likely to be negatively impacted by trade deals between Taiwan and China, likely to be signed in the coming year. China imposes an average 6.17% tariff on petrochemicals. Upon implementation of the ECFA, Taiwan will gain from non-tariff or lower-tariff shipment of their petrochemicals, batteries, etc and will be able to erode South Korea and Japan’s share. Currently, Japan and Korea account for about 38% of China's petrochemical market.