Taiwan — A Potential Economic Partner of South Asia

Abstract

Taiwan is a major hub of the global supply chains and one of the leading investors not only in China but also in other Southeast Asian markets. Although high trade complementary, bilateral trade between South Asia and Taiwan is only about US$ 9 billion, investment has only picked up recently. The computable general equilibrium (CGE) analysis indicates a substantial economic benefit of bilateral tariffs elimination between Taiwan and its South Asian partners. Taiwan has a substantial comparative advantage in producing high tech manufacturing goods while in South Asian’s main strength is in the resource-based agricultural and light manufacturing sector. Taiwan has been maintained a liberalized trade regime with minimal import tariffs and non-tariff measures (NTM) over the decades. As South Asia is booming, and Taiwan is seeking alternative markets and investments opportunities, it is time to deepen a bilateral economic relationship. South Asia is a market of 1.5 billion people with an emerging middle class along with substantial cheaper labor forces, made an ideal place for investment. A comprehensive economic partnership agreement (CEPA) with a preferential trade and investment agreement would be useful to attract Taiwanese multinationals and seamless trade between South Asia and Taiwan.

Keywords

• south asia
• taiwan
• trade
• investment
• cepa