Taipei (Taiwan), June 13: After the Central American country switched diplomatic recognition from Taiwan to China; the Taiwan Ministry of Economic Affairs (MOEA) today said that it will do its best to safeguard the interests of Taiwanese investors and companies that do business with Panama.
As of now the diplomatic ties between the two sides have been detached, the MOEA said that they will have a keen observation of how Ministry of Foreign Affairs (MOFA) handles a 2003 bilateral free trade agreement.
According to MOEA, the two ministries will work closely together to deal with any fallout from Panama's decision and adding the point said that it will seek to protect the interests of Taiwanese investors, businesspeople, and Taiwan as a whole.
MOEA informed that the FTA (Free Trade area) between Taiwan and Panama took effect on Jan. 1, 2004, granting tariff-free status to 95% of Taiwan's exports to Panama and 97% of Panama-made goods sold to Taiwan. They also informed that the agreement also focused on economic and technological cooperation between the two countries.
On Tuesday morning, Panamanian President Juan Carlos Varela announced that his country had cut diplomatic ties with Taiwan and was switching recognition to China.
The Central American country is the second who switched diplomatic recognition from Taiwan to China in past six months after the West African nation of Sao Tome and Principe switched in last December.
China’s Secretary General of the Presidential office Joseph Wu quoted "The move by the Beijing authorities is not only wrong but also affects the current situation, turning the peaceful development of cross-strait relations into a confrontation. For this, the government will reappraise the situation of the ties across the Taiwan Strait”.
Wu added that the China should stop taking decisions that hurt cross-strait stability and the feelings of the Taiwanese people.
Taiwan's foreign ministry separately announced that it would end diplomatic relations with Panama, shut down its embassy and withdraw all its financial and technical aid for the country. The Foreign Minister expressed grave regret over Panama's decision and hit out at Beijing's ‘chequebook diplomacy’ in its attempts to woo away Taiwan's allies. China sees the island as a renegade province that must be brought back under its control.