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Taiwan will work to protect its economic interests in Panama: MOEA

2017-06-14
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Taipei, June 13 (CNA) The Ministry of Economic Affairs (MOEA) said Tuesday that it will do its best to safeguard the interests of Taiwanese investors and companies that do business with Panama, after the Central American country switched diplomatic recognition from Taiwan to China.

The MOEA said that it is watching closely how the Ministry of Foreign Affairs (MOFA) handles a 2003 bilateral free trade agreement now that diplomatic ties between the two sides have been severed.

The two ministries will work closely together to deal with any fallout from Panama's decision, the MOEA said, adding that it will seek to protect the interests of Taiwanese investors, businesspeople and Taiwan as a whole.

The FTA between Taiwan and Panama took effect on Jan. 1, 2004, granting tariff free status to 95 percent of Taiwan's exports to Panama and 97 percent of Panama-made goods sold to Taiwan, according to the MOEA.

The agreement also focused on economic and technological cooperation between the two countries, the MOEA said.

On Tuesday morning Taipei time, Panamanian President Juan Carlos Varela announced that his country had cut diplomatic ties with Taiwan and was switching recognition to China.

The decision was a diplomatic blow to Taiwan, which has adopted a less conciliatory stance toward Beijing since President Tsai Ing-wen of the pro-independence Democratic Progressive Party took office on May 20, 2016.

With the loss of Panama as a diplomatic ally, Taiwan now has official relations with only 20 countries in the world.

Whatever may be the future of the bilateral FTA, Tsai Mei-na, director of the Ministry of Finance's (MOF's) statistics department, said its fate will have little impact on Taiwan's global trade as Panama absorbs only a small percentage of Taiwan's exports.

In the first five months of this year, Taiwan's exports to Panama totaled US$51.54 million, accounting for only 0.042 percent of Taiwan's global exports, the MOF said.

It said the exports to Panama were mainly information/communications devices, rubber and plastics goods, textiles, and machinery.

According to MOEA data, Panama was Taiwan's 72nd largest trading partner in 2016.

Trade between the two countries totaled US$160 million, a 7 percent annual drop, and accounted for only 0.031 percent of Taiwan's total bilateral trade, the data showed.

Panama was the 61st largest buyer of Taiwan products in 2016, absorbing 0.047 percent of Taiwan's exports at a value of US$133.04 million, the data indicated.

Taiwan does have a sizeable investment footprint in the Central American country.

According to the Investment Commission, Taiwan's aggregate investments in Panama are about US$1.6 billion to date. Evergreen Marine Corp. and Mega International Commercial Bank are the two biggest investors, with investments of US$850 million and US$20 million, respectively, the commission said.

Evergreen Marine, which has shipping and terminal management operations in Panama, said that its investments are based on the business reality that Panama is a major global shipping hub.

The company said the diplomatic shift is unlikely to affect its operations there. 

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