Taiwan offers Honduras economic incentives as new leader waits in wings

Taiwan on Friday cut to zero tariffs on 25 goods imported from Honduras under a free-trade agreement (FTA), offering an incentive ahead of this month's inauguration of a new president who had threatened to break off diplomatic ties with Taipei.

Taiwan on Friday cut to zero tariffs on 25 goods imported from Honduras under a free-trade agreement (FTA), offering an incentive ahead of this month's inauguration of a new president who had threatened to break off diplomatic ties with Taipei. Honduras is one of only 14 countries that maintain formal diplomatic relations with Chinese-claimed Taiwan.

Prior to winning November's presidential election, Xiomara Castro of the leftist Liberty and Refoundation Party (Libre) said if victorious, she would open diplomatic ties with China. But her team has since backtracked on that stance. Taiwan's Economy Ministry said the import tariff cut on agricultural goods ranging from avocados to yoghurt and pork bellies, originally agreed in 2019, had come into effect after completing relevant legal procedures.

The two have had a free trade agreement since 2007. Taiwan's economy ministry said since then, bilateral trade had grown from $65.95 million to $148 million in 2021, with Honduras being the largest source of frozen prawns imported into Taiwan.

"It is hoped that Taiwanese companies can make good use of the FTA niche to continue to deepen cooperation and open up more industrial cooperation and trade opportunities," the ministry said. Castro will be inaugurated as president on Jan. 27.

Taiwan's presidential office said on Friday it would make an announcement "in due course" on who would attend. China has been stepping up pressure to win over Taiwan's remaining diplomatic allies, last month re-establishing ties with Nicaragua.

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