In response to the media’s recent coverage on the introduction of 830 agricultural items from China via Taiwan’s upcoming free trade test zone program, the Council of Agriculture (COA) said that it remains dedicated to safeguarding the rights of Taiwanese farmers and that the Council has been monitoring the said 830 items since agricultural exports from China began on May 20, 2008. The Council added that the free trade zone program, which is aimed at lowering global trade barriers, is not related to the current agricultural trade scheme with China.

Free trade zones to add value to Taiwan’s agricultural goods

In line with the global trend of regional economic integration, Taiwan has been actively pursuing Free Trade Agreements (FTAs) with various trade partners and has expressed its interest in joining the Trans-Pacific Partnership (TPP). As part of the government’s policy in capitalizing on free trade opportunities, the Council has partnered with the Council for Economic Planning and Development (CEPD) to implement a nationwide free trade test zone program. The program is not only dedicated to attracting foreign investment, boosting employment opportunities and bridging the gap between local industries and international markets, it will also include the establishment of processing and distribution centers designed to add value to local agricultural products.

Raw materials required by manufacturers based in the free trade test zone will be acquired from around the world, said the Council, who stressed that China will not be the sole provider of agricultural materials in the free trade zone program. Moreover, business opportunities such as securing international contracts or gaining supplies from local satellite farms can also be acquired through the free trade zone program, which in turn will directly benefit Taiwan’s agricultural sector by offering a wider array of sales channels, the Council pointed out.

Value-added centers to produce items for exports only

According to the Council, the operational premise of the value-added distribution centers within the free trade zone program is based on processing agricultural items for exporting purposes, which is clearly a different target market in comparison to the demand for Taiwan’s specialty products. Foreign investors attracted by the free trade zone program will also be able to provide valuable sales channels to market Taiwan’s flagship agricultural products on the international market, the Council added.

The establishment of value-added processing and distribution centers will unite Taiwan’s advantages in the areas of agricultural processing technology, food safety and sanitary production as well as agricultural research and development, stated the Council. The importation of foreign raw materials at a cost-effective price, combined with local supplies and key processing technology, will also help usher forth industry-wide development, cross-sector integration and new value chains for the nation’s agricultural sector. This triple-winning combination — benefiting the nation’s manufacturers, processors and exporters alike — will then serve to boost Taiwan’s agricultural prowess in the international arena by deploying Taiwanese products, technologies and materials around the world, the Council pointed out.

The Council stressed that the 830 agricultural items imported from China will remain under strict surveillance and control, and that the government will adhere to policies beneficial to the sustainability and development of Taiwan’s agricultural sector in future negotiations regarding the Cross-Strait Economic Cooperation Framework Agreement (ECFA). The value-added processing and distribution centers under the CEPD’s free trade zone program, on the other hand, are wholly unrelated to the post-ECFA negotiations, the Council stated. It concluded that the government will always keep the best interests of Taiwanese farmers in mind, and that the next round of cross-strait talks will focus on securing preferential tariff treatment for Taiwanese agricultural exports to China.