CHAPTER III.- MARKET ANALYSIS AND POTENTIAL
3.5 Background on Commercial Relations between Honduras and Taiwan
With the signing of the FTA, around 3,882 items from Taiwan are able to enter Honduras with tariff exemption. On the other hand, Taiwan lifted tariffs for around 6,135 Honduran products.
Starting from 2017, Taiwan will not place import duties on 93% of Honduran goods, and Honduras will allow 70% of merchandise from Taiwan to enter its market without charging any tariffs.
3.5
Background on Commercial Relations between Honduras and Taiwan
Before the FTA, Honduras just exported US$1.5 million and imported US$26 million from Taiwan. Barely 21 Taiwanese companies maintained operations in Honduras, with a total investment coming from Taiwan reaching US$11 million, mostly in the textile industry, but which over the years, has been in decline.
It was expected that the commercial exchange between Honduras and Taiwan to be of approximately US$80 million. That, however, has not been the case. In 2008 when the FTA came into force, Honduran exports to Taiwan increased considerably but decreased significantly in 2009 due to the recession. However, exports later picked up in 2010.
Table 3: Trade Balance with Taiwan
Year Export Value Export
2006 $2,489 14,786 $34,695 11,873 ($32,205) 2,914
2007 $6,425 32,581 $39,737 12,452 ($33,313) 20,129
2008 $22,359 58,182 $46,732 17,217 ($24,373) 40,965
2009 $2,877 12,022 $38,613 20,982 ($35,736) (8,959)
2010 $16,309 27,201 $35,435 13,198 ($19,126) 14,003
Total $50,459 144,773 $195,212 75,722 ($144,754) 69,051
Central Bank of Honduras Trade Balance with Taiwan Value in US$ thousands; Volume in kg
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Over the past five years, Honduras’ trade balance with Taiwan has been of deficit, importing more from Taiwan than what it exports to it.
In 2010, Taiwan was Honduras’ top 18th export partner. As seen on Table 4 below, over the past few years Honduras’ main exports to Taiwan have been tons of waste and scrap of iron, steel and aluminum, coffee, and seafood such as scallops, shrimps, prawns and mollusks.
Table 4: Top 25 Exports from Honduras to Taiwan
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1 72044900 Other waste and scrap, of iron or steel $11,332,888 $135,426 $3,244,264 $14,712,578 2 72041000 Waste and scrap of cast iron $4,973,547 $120,318 $6,760,851 $11,854,716 3 09011130 Coffee, not roasted, not decaffeinated $1,066,136 $1,233,141 $1,353,013 $3,652,290
4 03061311 Shrimps and prawns, frozen $0 $338,512 $2,678,492 $3,017,004
5 72042900 Waste and scrap of other alloy steels $576,647 $921,904 $1,440,049 $2,938,600 6 72043000 Waste and scrap of tinned iron or steel $2,180,489 $0 $0 $2,180,489
7 76020000 Aluminium waste or scrap $1,810,970 $0 $200,078 $2,011,048
8 48045900 Other kraft paper and paperboard, uncoated, in rolls or sheets, weighing 225 g/square meter or more
$0 $0 $225,490 $225,490
9 47079000 Other recovered (waste and scrap) paper or paperboard, including unsorted waste and scrap
$0 $57,631 $140,611 $198,242
10 03072900 Scallops (include full shell fish and compoy), alive, frozen, dried, salted or in brine
$151,653 $0 $0 $151,653
11 47072000 Recovered (waste and scrap) other paper or paperboard made mainly of bleached chemical pulp, not coloured in the mass
$0 $28,434 $84,413 $112,847
12 03079900 Other mollusks and aquatic invertebrates, frozen, including flours, meals and pellets of aquatic invertebrates other than crustaceans, fit for human consumption
$72,722 $0 $0 $72,722
13 09011190 Other coffee, not roasted, not decaffeinated $0 $0 $60,312 $60,312 14 03073900 Mussels (mytilus spp., perna spp.), alive, frozen,
dried, salted or in brine
$59,937 $0 $0 $59,937
15 23012090 Other flours, meals, and pellets, of fish or of crustaceans, mollusks or other aquatic invertebrates
$10,920 $0 $43,747 $54,667
16 73192000 Safety pins, of iron or steel $0 $20,729 $20,729 $41,457
17 07070000 Cucumbers and gherkins, fresh or chilled $34,493 $0 $0 $34,493
18 39139000 Other natural polymers and modified natural polymers, in primary forms
$19,238 $0 $14,106 $33,344
19 61091000 T-shirts, singlets and other vests, knitted or crocheted, of cotton
$0 $0 $25,040 $25,040
20 84481900 Other auxiliary machinery for machines of heading no. 84.44, 84.45, 84.46, 84.47.
$14,696 $0 $0 $14,696
21 85481010 Waste lead-acid accumulators and spent lead-acid accumulators
$0 $0 $13,186 $13,186
22 44071000 Other coniferous wood sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or end-jointed, of a thickness exceeding 6 mm
$11,346 $0 $0 $11,346
23 84529000 Other parts of sewing machines $9,498 $0 $0 $9,498
24 94036000 Other wooden furniture and its parts $0 $6,620 $210 $6,830
25 39269099 Other articles of plastics and articles of other materials of headings Nos. 39.01 to 39.14
$6,393 $0 $10 $6,403
$22,331,570 $2,862,714 $16,304,600 $41,498,884
$27,551 $14,087 $4,145 $45,783
$22,359,122 $2,876,801 $16,308,745 $41,544,667 Gra nd T o ta l machines, parts and accessories of vehicles, lamp units, plastics and its derivatives, rubber, footwear, among others, as shown on Table 5.
Table 5: Top 25 Imports by Honduras from Taiwan
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1 72259900 Flat-rolled products of other alloy steel, of a width of 600 mm or more
$3,482,254 $574,913 $4,202,383 $8,259,550
2 72082700 Other flat-rolled products of iron or non-alloy steel, pickled, of a thickness of less than 3 mm, hot-rolled, in coils, containing by weight 0.6% or more of carbon
$7,443,313 $90,317 $0 $7,533,629
3 87089900 Other parts and accessories, parts and accessories of motor vehicles of heading 87.01 to 87.05
$3,953,841 $2,445,712 $829,336 $7,228,889
4 72106110 Flat-rolled products of iron or non-alloy steel, plated or coated with aluminium-zinc alloys
$0 $3,366,820 $2,057,803 $5,424,623
5 39199000 Other self-adhesive plates, sheets, film, foil, tape, strip and other flat shapes, of plastics, whether or not in rolls
$935,920 $752,344 $936,215 $2,624,479
6 87082990 Parts and accessories of other vehicles $101,479 $595,653 $1,699,238 $2,396,370
7 85391000 Sealed beam lamp units $857,462 $418,167 $1,032,942 $2,308,570
8 85122000 Other lighting or visual signalling equipment $981,300 $750,226 $557,623 $2,289,150
9 87081000 Bumpers and parts thereof $440,372 $496,488 $1,232,147 $2,169,007
10 84529000 Other parts of sewing machines $1,091,575 $522,562 $530,310 $2,144,447 11 87112090 Other motorcycles, cycles, equipped with
reciprocating internal combustion piston engine of a cylinder capacity exceeding 50 cc but not exceeding 250 cc
$523,793 $632,198 $692,425 $1,848,416
12 85291000 Aerials and aerial reflectors of all kinds; parts suitable for use therewith
$25,348 $269,172 $1,501,711 $1,796,231
13 39191010 Self-adhesive plates, sheets, film, foil, tape, strip and other flat shapes, of plastics, in rolls of a width not exceeding 20 cm
$750,392 $676,021 $309,731 $1,736,144
14 64029190 Other footwear, covering the ankle, with outer soles and uppers of rubber or plastics
$563,942 $1,128,507 $0 $1,692,448
15 84145100 Table, floor, wall, window, ceiling or roof fans, with a self-contained electric motor of an output not exceeding 125 W
$233,937 $521,231 $831,297 $1,586,465
16 84145900 Other fans $62,691 $179,008 $1,019,788 $1,261,487
17 85235210 Cards incorporating an electronic integrated circuit (smart cards) Supports semiconductors, disk, tape, permanent storage devices based on
semiconductor data
$1,013,919 $173,589 $463 $1,187,972
18 64022000 Footwear, with upper straps or thongs assembled to the sole by means of plugs, with outer soles and uppers of rubber or plastics
$193,382 $886,528 $0 $1,079,910
19 64029990 Other footwear, with outer soles and uppers of rubber or plastics
$152,590 $805,894 $0 $958,484
20 70091000 Rear-view mirrors for vehicles $435,348 $245,610 $255,497 $936,455
21 87120000 Bicycles and other cycles (including delivery tricycles), not motorised
$306,326 $3,384 $610,285 $919,995
22 87149990 Other parts and accessories of vehicles of headings Nos. 87.11 to 87.13
$367,013 $250,409 $301,601 $919,023
23 84099100 Other parts suitable for use solely or principally with the engines of heading 84.07 or 84.08
$236,150 $449,937 $159,395 $845,482
24 84149019 Parts of air pumps and vacuum pumps;
compressors; fans and blowers
$457,422 $320,934 $20,703 $799,058
25 40114000 New pneumatic tires, of rubber, of a kind used on motorcycles Taiwanese companies such as Mr. Brown Coffee, part of King Car Group, showing great interest in this Honduran delicacy. Also, interest has been shown from Taiwanese companies to invest in solar energy, due to the potential they see in Honduras to develop
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such resources. Likewise, a Taiwanese manufacturer of sporting goods has plans to establish operations in Honduras in the near future.
The electronics sector is Taiwan's most important industrial export sector and is of great appeal to world markets because of their quality and innovation and thus, is an excellent opportunity to exploit in Honduras.
Honduras held an event this past May, which focused on launching Honduras as the most attractive investment destination in Latin America. The event, which was named Honduras is Open for Business, is a fundamental milestone of the National Program for Investment Promotion. The event gave place to international forums and business meetings where companies were able to present their products to potential investors.
More than 1,000 companies from 75 countries were invited to this international forum.
They were selected based on the interest they have historically demonstrated in Latin America, for their sales volume, as well for their orientation toward certain productive sectors of global priority.
A delegation of Taiwan, which included the Vice-minister of Economy and around 20 Taiwanese businessmen of the textile sector, machinery for plastics, electronics, technical services and coffee, were all present.
With this, commercial relations were reinforced between both countries. It was announced that Export-Import Bank of the Republic of China has agreed to offer US$10 million in loans for Honduran companies who wish to purchase advanced machinery from Taiwan.
This aims to help Honduran companies raise its competitiveness in the international markets.
According to Taiwan’s Vice-Minister of Economy, to date, Taiwanese companies have invested around US$60 million in Honduras, creating more than 2,000 jobs.9
9 Honduras Investment Pact. Noticias – Newsletter about Taiwan. May 2011.
http://noticias.nat.gov.tw/ct.asp?xItem=163926&ctNode=138&mp=12
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Taiwan can benefit greatly through foreign direct investment in Honduras and reach the United States market by taking advantage of the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), and thus having preferential treatment to export their products to United States.