Likely edge for Taiwan businesses with likely reduction in tariffs on petrochemical exports to China

05-Sep-14

Taiwan's state-run oil company CPC Corp. hopes to see a reduction in tariffs on petrochemical exports to China, which would give Taiwan businesses in that sector a competitive edge in the huge mainland market, as per CNA. Taiwan and China are set to resume negotiations next week on a trade-in-goods agreement, likely leading to the tariff cut. Taiwanese exporters are hoping to obtain significant concessions when the ninth round of talks on the trade-in-goods agreement gets underway. Noting that China and South Korea are in negotiations on a free trade agreement, CPC Chairman Lin Sheng-chung said that if South Korean petrochemical companies obtain tariff-free concessions on exports to China, petrochemical exporters in Taiwan could lose more than US$1 bln worth of orders per year. China currently imposes about a 6.54% tariff in Taiwan-made petrochemical products. In 2013, the local petrochemical industry accounted for 31.4% of the total production value of Taiwan's manufacturing sector and 25.8% of the sector's total exports.