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Economy

Taiwan gets serious about Pacific trade deal

TAIPEI -- With Taiwan's exports flagging, President Ma Ying-jeou has steered the island economy on a faster course toward the Trans-Pacific Partnership.

     Ma wants to have a road map to the free trade pact by the end of July, including a time for announcing Taiwan's bid for entry.

     In his New Year's address, Ma promised to focus on economic growth in 2014. He is particularly eager to lay the groundwork for joining the TPP and will oversee progress personally.

    

Ma Ying-jeou

Ma had initially cast this as a longer-term goal. At his second inauguration, in May 2012, he had said he wanted to take up to eight years to prepare.

     The U.S., Japan, and the 10 other countries at the TPP negotiating table are nearing a final framework. Even if Taiwan makes up its mind by summer, it is likely to find a fait accompli.

     Yet Ma has reason to jump at the opportunity for expanded trade. Exports, vital to the Taiwanese economy, climbed just 0.7% last year on the heels of the previous year's 2.3% decline. Just a few years ago, exports were rising more than 10%. A wide range of sectors, from information technology to machinery to metal products, are now suffering.

     South Korea, whose manufacturers compete with Taiwanese businesses in many of these sectors, said in November that it intended to enter the TPP negotiations. It already has free trade agreements with the U.S. and the European Union. Officials in Ma's government fear that Taiwan will fall hopelessly behind if Seoul adds the TPP to the list.

     Last year, China expressed "interest" in the TPP, which some in the government had initially regarded as a U.S.-led attempt to sideline the world's second-largest economy. This apparent softening of its stance seems to have encouraged Ma to fast-forward Taiwan's TPP bid. Helpfully, he has enjoyed stable relations with Beijing and a flourishing of free trade with the mainland on his watch.

     But the president has yet to achieve an equally important domestic consensus on joining the trade bloc. Farmers' groups, among others, are certain to oppose entry, as they have in Japan. The political heavy lifting needed to clear the legislature could prove a hard test for Ma, whose approval rating is already sagging.

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