The chief executive of Formosa Plastics Group, Taiwan's largest petrochemical conglomerate, expressed disappointment Thursday that the petrochemical sector was not included on the "early harvest" list under a proposed trade pact with China.Also not on the list were automobiles, which means that the rationale for the VW investment here in Taiwan just went POOF. Wang also said that the firm's rivals in Korea, Japan, and southeast Asia are expanding their capacities, meaning that brutal price wars are probably on the way, especially if the economy of China goes KA-BOOM. Which means that after capacity expansion to take advantage of government subsidies, Formosa Plastics will next scream either for more subsidies or protection. [sonorous voice] "The petrochemical industry is too big to fail...." The whole rationale for that brontosaurian industrial complex down in Mailiao with its steel plant and naptha cracker is the China market.....
Wang Wen-yuan urged the government to pay more attention to the old economy industries and continue efforts to support the sector by winning consensus with China to include the petrochemical sector on Taiwan's list of items and services that will enjoy tariff waivers or an easier market access upon the signing of the economic cooperation framework agreement (ECFA) with China.
Taiwan and China wrapped up the third round of ECFA negotiations Sunday and reached consensus on the context of the pact, including the "early harvest" lists of each side.
A government official who demanded anonymity had said earlier this week that polyvinyl chloride and polypropylene have been excluded from the "early harvest" list.
REFERENCE: China Post article outlining the sectors covered. And don't miss these comments from Yen Ching-piao about economics and the environment.
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