Taiwan in Push for FTA with Australia

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Director-general of the Taipei Economic and Cultural Office,
Edward Tao, with Brisbane Lord Mayor, Adrian Schrinner  

Taiwan is pushing for a free-trade agreement (FTA) with Australia as it moves to reduce its exposure to China amid heightened military tensions in the region. Australia walked away from plans for an FTA with Taiwan in 2018 after China warned any deal would hurt relations between Beijing and Canberra.

Edward Tao, the new director-general of the Taipei Economic and Cultural Office in Brisbane, spoke out in an interview that appeared in the major daily newspapers around Australia this week. He said that an FTA would make sense for both nations that had suffered “economic bullying” at the hands of China.

China dominates Australian trade, accounting for more than 30% or $153 billion in exports annually. But Taiwan is Australia’s sixth largest export market and surged by 20% in 2018-19 to $10 billion, largely on the back of coal, iron ore, LNG and agricultural exports. We receive finished goods such as electronics and vehicle parts in return.

Mr Tao noted that Taiwan, with a population of 25 million and about half the size of Tasmania, was on a per capita basis the biggest buyer of Australian products. He said Taiwan’s New Southbound Policy aims to enhance economic and trade relations between it and 18 countries in Southeast Asia, South Asia and Australia.  

While resources growth has been strong, consumables have historically been undermined by tariffs that make them less competitive against countries that have economic co-operation deals with Taiwan, including New Zealand and Singapore. New Zealand, a competitor to Australia in the beef and wine sectors, saw its exports to Taiwan rise by 22% in the year after the deal was signed.

Australian officials are believed to have been conducting talks with Taiwanese officials about closer economic and trade links with the island nation, but it remains to be seen whether these will once again be blocked by warnings from Beijing.  

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