Economy

Bad Korea move

Seoul and Tokyo fear ECFA’s impact

Taiwan’s gain could be our loss. That, at least, is the view of Japan’s Nikkei newspaper.

“A broad tariff-slashing agreement signed Tuesday by China and Taiwan is set to impact South Korean and Japanese companies strategies for the Chinese market,” it laments.

The particular concern is about exports. “In the Chinese market, Taiwanese exports compete with those from South Korea and Japan in 17% of the 539 products where China has agreed to reduce tariffs,” according to an official at Taiwan’s Ministry of Economic Affairs.

The Nikkei quotes Cheong Inkyo, a professor with Inha University as worrying that “tougher competition in electronic components will undermine South Korean companies positions in China”.

It cites similar sentiment from an official with the Korea International Trade Association who is concerned about the “improved competitiveness of Taiwanese rivals”.

Japanese firms also worry about automotive parts, which are also covered by the ECFA agreement.

Some big firms are looking further ahead, expecting more items to have tariffs lifted in future. Samsung Electronics and LG Display “are rushing to build Chinese factories,” the Nikkei reports, as they anticipate LCD panels could be in line for a tariff cut, giving Taiwanese manufacturers a huge advantage over their own Korean made panels.


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