Taiwan-El Salvador FTA Takes Effect

El Salvador's Free Trade Agreement (FTA) with Taiwan came into effect on March 1. AFP reports:

El Salvador on Saturday launched a free trade pact with Taiwan, its first such deal with a partner outside the Americas.

President Elias Antonio Saca called the deal historic and argued it would give this small Central American nation new access to the highly competitive Asian market.

The official launch ceremony was held at a plant outside the Salvadoran capital set up with capital from Taiwan, with Taiwan's Ambassador Carlos Liao on hand.

Taiwan has sought to cultivate diplomatic ties with Central and South American states as it vies with China for international recognition.

Taiwan and China split in 1949 after a civil war and have since argued over which is the rightful government, with Beijing regarding the island as part of the mainland awaiting reunification.

The Taipei Times described the FTA last year:

Under the FTA's framework, Steve Chen said that El Salvador would enjoy tariff-free privileges for sugar exports up to 35,000 tonnes for the first year.

The amount will increase to 50,000 tonnes of sugar for the second year and 60,000 tonnes for the third.

Taiwan's consumes 500,000 tonnes to 600,000 tonnes of sugar per year, with approximately 60,000 tonnes coming from local suppliers and the rest mostly from Thailand and Australia.

Steve Chen said tariff-free sugar imports from El Salvador would not jeopardize local sugar cane farmers because the government has a purchasing system in place to protect their interests.

Because El Salvador is a member of the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA), which took effect in El Salvador in March last year, Steven Chen said that Taiwanese businesses operating in El Salvador were entitled to trade benefits with the US.

DR-CAFTA includes the US, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.

Signing FTAs helps lower prices and increase trade volume, Steve Chen said.

In addition to sugar, he said there was plenty of room for imports of El Salvadoran coffee. Taiwan's coffee imports totaled US$32 million last year, with US$3 million, or 11 percent coming from Central American countries.

The Taiwan-El Salvador FTA covers agriculture, manufacturing and the service sector.

Taiwan Journal noted the importance of sugar quotas in both this FTA and in Central American-Taiwan relations in an article last year as well:

Chen noted that Saca was originally supposed to visit Taiwan to sign a free-trade agreement, but that the ceremony had to be canceled because negotiators had reached an impasse with regard to sugar export quotas. The president held up the FTA talks as an example to illustrate how the two sides have similar problems. Honduran President Manuel Zelaya Rosales, Chen reminded his guest, ordered his country's negotiators to put aside their differences with Taiwan in order to speed up the signing of an ROC-Honduras FTA.

Saca stressed that El Salvador had had high expectations for its FTA with Taiwan, but the sugar export quotas demanded by the Taiwanese negotiators would have affected job opportunities and agricultural production technology in his country. He hoped the two countries could find a solution to the issue and reach a consensus.

Chen and Saca, accompanied by government officials from the two countries, visited the Tainan Science Park Oct. 19, where they attended a briefing on the park's development and visited several high-tech companies, such as Taiwan Semiconductor Manufacturing Co. Ltd. and Chi Mei Corp., which makes computer monitors.

Tai Chien of the National Science Council spoke about plans to build a Taiwan science park in El Salvador. He said Saca's visit was a positive sign that El Salvador would come to better understand Taiwan's high-tech industry. Taiwanese efforts to transplant the science park experience can not only help its allies, but also provide new investment opportunities for Taiwanese companies, Tai added.

FTAs with central American nations also help Taiwan in that they can be used as an export base for the American market. For that reason China has also targeted relations with these nations.

MEDIA NOTE: AFP appears to be living in an alternate reality on the Taiwan Question:

Taiwan and China split in 1949 after a civil war and have since argued over which is the rightful government, with Beijing regarding the island as part of the mainland awaiting reunification.

Not only does this repeat the erroneous formulation that "Taiwan and China" split (the KMT and the CPP split; Taiwan was owned by Japan in 1949) but it adds, incredibly, that Taiwan and China spar over who rules China. Taiwan renounced claims to China almost twenty years ago.... now the debate is over whether Taiwan should be annexed to China. And of course, the media tell us what Beijing thinks of Taiwan, but never what Taiwan thinks of Beijing.

[Taiwan]