The Ministry of Economic Affairs (MOEA) has completed an evaluation of a potential comprehensive trade pact with China and finalized consultations with industries that were held to gain a better understanding of their needs, Minister of Economic Affairs Yiin Chii-ming (尹啟銘) said.
Yiin was quoted as making the remarks at an executive meeting of the Chinese Nationalist Party (KMT) on Wednesday.
KMT spokesman Lee Chien-jung (李建榮) said Yiin had outlined six stages that must be completed before an economic cooperation framework agreement (ECFA) with China could be put into effect: independent assessments by each side, a joint assessment, negotiations, signing the pact, legislative approval and implementation.
Yiin expressed hope at the meeting that the first stage would be completed within three months, Lee said.
The minister stressed that it would be best for Taiwan to sign the proposed ECFA sooner rather than later, as China was about to enter into a free-trade arrangement with the ASEAN countries.
When the ASEAN-China trade pact takes effect next year, tariffs will be removed on 93 percent of products traded between China and the ASEAN countries.
Taiwan risks being marginalized, the minister was quoted as saying.
If Taiwan is excluded from the free trade region, more than half of the country’s exports will be hurt by the existence of tariffs, which would lead to an exodus of industries, Yiin said.
For example, petrochemical companies would be subject to tariffs of 6.5 percent on their products, while their competitors in the region would pay only 0.25 percent, he said.
Yiin said the government had come up with a “safeguard mechanism” to protect certain local industries — including leather, towel and footwear manufacturers — under an ECFA.
Initially, Chinese goods from those industries would not be allowed into the country and anti-dumping measures would be in place, he said.
Meanwhile, Mainland Affairs Council Chairwoman Lai Shin-yuan (賴幸媛) said on Wednesday that the ECFA proposal would likely be discussed later this month in Taiwan at preparatory meetings ahead of the third round of cross-strait talks.
On the agenda of the next round of cross-strait talks are anti-crime efforts, regular cross-strait flights, financial cooperation and Chinese investment in Taiwan, Lai said.
She said the proposed pact would hopefully be raised during the preparatory meeting and that if both sides were willing to negotiate the issue, it would be put on the agenda of the cross-strait talks.
As internal consensus is needed before an agreement can be signed, it is too early to negotiate with China on the proposed pact, Lai said.
The MAC chief said that as far as she knew, China was still studying the proposal, but added that the ECFA issue would definitely be raised at the fourth round of cross-strait talks if not earlier.