As the United States and South Korea reached a free trade agreement (FTA) a few days ago, the major machine tool manufacturers in Taiwan are concerned that the Taiwan machine tool orders will decline significantly in 2012.

With the signing of the FTA, from January 1, 2012, Korean machine tool products exported to the United States will not be subject to a 4% tariff. In addition, the sharp depreciation of the Korean Won against the US dollar has also increased the international competitiveness of Korean machine tool manufacturers.

Taiwan's machine tool builders pointed out that the free trade agreement between South Korea and the European Union came into effect in July this year, and the related tariff fell from 2.7% to zero. At present, Taiwan’s mechanical products exported to the United States account for 14.1 to 14.5% of its total machinery exports, which is higher than its share of exports to the EU by 12%.

Taiwan’s major machine tool manufacturers, including Dongtai Precision Machinery, Gaofeng Machinery, Fuyu Business, Aachen Electromechanical, Qiaofu Machinery, Taichung Precision Machinery, Chengtai Machinery, and Taiwan’s Yuze Technology, all said that they currently receive The order can meet the full production at the end of this year. But they do not know if they can get enough orders next year.

At present, since the recovery signals of the automotive and consumer electronics industries in the United States, the European Union, and mainland China are unclear, starting from 2012, they will affect the exports of plastics and rubber processing machines, PCB drilling machines and machine tools manufactured in Taiwan, China.