FASTENER INDUSTRY URGES TAIWAN GOV’T TO HELP IT BATTLE RCEP

Taiwan's main fastener industry association called on the government to weaken the Taiwan dollar to help it offset potentially tougher export competition following the signing of a major regional trade pact earlier this month, Wu Chia-jung, Jeffery Wu and Joseph Yeh reported for Taiwan’s Central News Agency (CNA).

Industry representatives urged the government to allow the local currency to depreciate to boost their export competitiveness, as the Regional Comprehensive Economic Partnership (RCEP) signed last Sunday could seriously threaten some Taiwanese businesses.

Before a meeting with senior government officials, Tsai Tu-chin, chairman of Taiwan Industrial Fastener Institute, told the media of the difficulties Taiwan's fastener sector is facing. Though Taiwan is the world's third largest exporter of binding and fastening products, its annual production value fell from NT$176 billion ($6.17 billion) in 2018 to NT$144 billion in 2019 and could fall as low as NT$110 billion this year.

A key part of that significant drop is the continued appreciation of the Taiwan dollar against the US dollar over the past two years, according to Tsai. He said the 12% to 15% appreciation of the local currency against the greenback over that time has translated into an annual loss of NT$5 billion for the industry. It has also faced import duties of 5-30 percent on binding and fastening products exported from Taiwan to the 10 Association of Southeast Asian Nation (ASEAN) economies, Tsai said. The RCEP signed between the 10 ASEAN states, China, Japan, South Korea, New Zealand and Australia, could pose a serious challenge to Taiwan's fastener industry, which is already being hurt by currency appreciation, by reducing tariffs for RCEP members, Tsai said. "Once the industry loses its competitiveness, we will be forced to close down our businesses in Taiwan or move them away from the country," he warned.