Canada’s trade with Taiwan is likely to grow again this year, but despite efforts on both sides of the Pacific the balance in Taiwan’s favor continues to expand.
The growing gap is of considerable concern in Taiwan, says Lorne Seitz, senior vice-president of the Canadian Chamber of Commerce.
Canadian exports to Taiwan – primarily paper products, copper, coal and grain – rose 15.8 per cent in 1984 to $400-million from the level of the previous year. But in the same period, imports from Taiwan – mainly footwear, textiles and consumer electronics – jumped 32.2 per cent to $1.22-billion.
This year, exports probably will approach $500-million, but imports are likely to climb even more, to between $1.4-billion and $1.5-billion.
A Canadian trade delegation, including Mr. Seitz, met Taiwanese officials earlier this month and urged them to make efforts to narrow the trade differential.
The gap in the trade balance is proportionately the same size as that between Taiwan and the United States, Taiwan’s largest export market, and the situation ”s causing no end of concern in Taiwan,” Mr. Seitz said.
The Canadians suggested Taiwan could increase its imports of Canadian coal and go to Canada to buy some metal products and all of its grain, rather than most of its grain, as is the case now.
They also suggested Taiwan could make some purchases in Canada rather than in Australia, with which Taiwan has almost balanced trade of about $700-million each way annually.
The Taiwanese are looking to diversify and to decrease their reliance on imports from Japan, which currently has a $3-billion trade surplus with Taiwan.
In hopes of boosting sales of Canadian goods, the chamber of commerce is preparing to establish a trade office in Taiwan, perhaps later this year.
Financing is the stumbling block. With no diplomatic relations between the two countries, the Canadian Government is prevented from providing the $500,000 to $600,000 needed to set up such an office and a support system in Canada. “The situation is kind of ludicrous,” said Ted Chih-Fan I, president of Investec (Taiwan) Ltd., a Taiwanese management consulting firm. “Purchases from Canada are very much agreeable to Taiwan, and the lack of political relations makes that more difficult.” Victor Chen, director of Far East Trade Service Inc. in Vancouver, says Canadians must maintain personal contacts if they hope to do business in Taiwan. Frequent follow-up visits are essential, he said.
U.S. and West German telecommunications companies, for example, keep a close watch on projects being developed through official agents in Taiwan.
A Canadian office could also help Taiwanese business people who want to come to Canada. A frequent complaint is the lack of a Canadian visa office in Taiwan. That forces potential travellers to apply for visas in Hong Kong, where the nearest Canadian post is located. Similarly, Canadians must apply for visas through Taiwanese offices in the United States.
Canada should also consider giving multiple visas, good for four or five years, as the U.S. Government does, Mr. Chen said. These make it easy for business people to make frequent trips.
Taiwan relies heavily on foreign trade. Exports comprise about half of the country’s gross national product.
Strong export demand has been the engine of Taiwan’s economic recovery following two years of slow growth in 1981-82, says a report published by the international banking department of the Royal Bank of Canada. ”he impressive export-led recovery is now being consolidated by an increase in momentum in consumption and private investment.” And with the economic recovery boosting tax receipts, the Government increased its spending plans by 11 per cent in 1984-85.
The Government is also committed to industrial restructuring, from labor-intensive to technology- intensive processes, and it is encouraging diversification of exports, which are mostly consumer- related goods.
Opportunities exist for Canadians to increase sales, particularly as Taiwan needs technology and equipment for planned nuclear and telecommunications developments.
As well, the Government of Taiwan recently decided to reduce import tariffs over the next three to five years.
Canada and Taiwan do not afford each other most favored nation status in trade, but ”hese things can be negotiated,” Mr. Chen said.
Mr. Chen’s company, which has offices in Toronto and Montreal as well as Vancouver, offers information and consultation services free to encourage trade between the two countries. The office is financed through levies paid by the Taiwanese Government, unions and businesses.