RP urged to sign FTA with Taiwan

MANILA, Philippines - The Philippines must sign a free trade agreement (FTA) with Taiwan soon because the agreement between Taiwan and China can mean job losses for overseas Filipino workers (OFW) in Taiwan and a slowdown of Taiwanese investments in the country.

In an interview, Ambassador Donald Lee, Representative of the Taiwan Economic Cooperation Office (TECO) said the signing of the Economic Cooperative Framework between China and Taiwan this month would result in the transfer of some Taiwanese factories to China because it is cheaper to produce in China.

“Once the factories are in China, the OFWs will be displaced,” Lee said. Currently, Lee estimated that there are 80,000 OFWs in Taiwan.

Likewise, Lee said firms would choose to locate in China because of the big domestic market. China has a population of 1.2 billion while the Philippines only has 92 million. The access to raw materials is also easier in China rather than the Philippines.

The labor cost in China is cheaper than the Philippines, Lee said. The cost of production in China is one fifteenth cheaper than Taiwan while it is only one tenth cheaper here in the Philippines.

“This is the reason why the two countries (Philippines and Taiwan) must enter into an FTA soon,” Lee said. He said talks for a possible FTA began early this year. “It is quite urgent for Taiwan and the Philippines to negotiate.”

Aside from displaced workers, Lee said the Philippines may also lose potential investors because it would be easier to enter a country that has an existing agreement with Taiwan.

Lee said they understand that the change in the administration may mean a delay in the negotiations but said there has been a number of talks between the two countries already. “We have no time frame for this but we want it done soon.”

He said they are willing to wait until the new administration is set up before pursuing the deal. If given the chance, Lee said he would like to discuss the matter with President Apparent Benigno Aquino III. “I want to discuss this issue with him because this is very important for the two countries.”

When asked if this will conflict with the One China Policy, Lee said this has nothing to do with the policy. “We have 12 cooperative MOUs with China.”