News description

After years of RCEP (Regional Comprehensive Economic Partnership) negotiations, despite India’s withdrawal from the agreement, the remaining 15 countries have finally completed their negotiations on November 4, 2019. The agreement is expected to be officially signed in 2020 to establish a community of economic interests.

Impact analysis

In 2018, the cross-strait output value of Taiwan’s PCBs was approximately NT$651.4 billion, where approximately 63% were produced in mainland China and the remaining 37% of approximately NT$245.6 billion were made in Taiwan and were mainly export-oriented. According to customs statistics, approximately NT$167.6 billion worth of PCB products were exported to other countries in 2018. From the list of Taiwan’s PCB exports, the United States, Germany, and Mexico were three non-RCEP signatory countries among the top 10 exporting countries. The remaining seven countries are RCEP signatory countries. Also, 15 RCEP signatory countries imported a total of NT$137.4 billion worth of PCB products from Taiwan in 2018, accounting for 82% of Taiwan’s PCB exports. This shows that the relationship between RCEP signatory countries and Taiwan’s PCB industry is very close.

       India, which was initially on the RCEP list, did not complete the negotiation this time. As a result of this, the number of RCEP countries that are expected to sign the agreement in 2020 will be reduced from the original 16 countries to 15 countries. As India continues to move towards the goal of supporting its local products, the country imposed an additional tariff for imported electronic products and other components, including PCBs. Therefore, if India joins the RCEP and opens the remaining RECP member countries with a duty-free status, Taiwan’s export production of PCB products in India will be affected, with an output value of approximately US$700 million each year.

       Currently, the exports of Taiwan-made PCBs to the 15 RCEP countries are eligible for zero tariffs. So, the RCEP to be signed in 2020 will have a negligible impact on Taiwan’s PCB industry. However, if Taiwan can join the RCEP again, it will be of great help to the industry because several imported components, such as steel sheets that are needed in PCB processing, are still subject to tariffs. Although the exports of finished PCB products can still be refunded, this will consequently increase the manufacturers’ operating costs and the cost of temporary tax funds. Therefore, if Taiwan cannot fight to join the various global trade organizations, the competitiveness of Taiwan’s industries will be gradually weakened.