The inking of an economic cooperation framework agreement (ECFA) with China could generate between 257,000 and 263,000 jobs per year in Taiwan and raise annual GDP by between 1.65 percent and by 1.72 percent, a top local research institute said yesterday.
Presenting a study on the potential effects of an ECFA, the Chung-Hua Institution for Economic Research (CIER) said it had drawn two possible scenarios for the signing of the pact: In the first scenario, tariffs on select Taiwanese agricultural products that are currently open to China will be removed, while the industrial sector will be closed to China; in the second scenario, there will be no changes in the agricultural sector, but the industrial sector will be completely opened to China.
CIER vice president Liu Bih-jane (劉碧珍) said that exports could increase by 4.87 percent in the first scenario and by 4.99 percent in the second one. Imports could correspondingly rise by 6.95 percent or 7.7 percent.
Balance of trade — or net exports — would experience an annual boost of US$1.76 billion to 1.78 billion, Liu said.
“Although inking the trade agreement is not the only solution to the economic crisis, it is certainly be an effective one, as our calculations show,” Liu said.
The institute decided to run two scenarios because the government's proposed pact is likely to fall somewhere inbetween, the Ministry of Economic Affairs said.
The ministry also conducted separate ECFA calculations that included the multiplier effect, which in essence produced higher results.
Based on the ministry's calculations, annual GDP could rise by 1.83 percent and employment could increase by 273,000 jobs compared with CIER's estimates of 257,000 to 263,000.
“Furthermore, over a seven-year period after inking the ECFA, we expect foreign direct investment to top US$8.9 billion as more international companies set up subsidiaries in Taiwan,” Minister of Economic Affairs Yiin Chii-ming (尹啟銘) said.
The ministry said an ECFA would not negatively affect the information technology (IT) sector, while other industries such as plastics, chemicals, machinery, textiles and steel should see direct and immediate benefits.
“If the IT industry could lose up to NT$350 billion [US$10.7 billion] because of the ECFA as the Cross-Strait Interflow Prospect Foundation has said, why haven't we heard any IT companies complain,” Yiin said.
Yiin made the comment in response to another CIER study commissioned by the non-profit foundation.
The minister said the foundation failed to take into account that many Taiwanese electronics, information and communication technology companies already enjoy zero tariffs and only based its calculations on companies that could suffer as a result of the ratification of the ECFA.
Speaking on the government's timetable for the proposed pact, Yiin said the plan was “to complete independent studies in June, conduct joint studies in July, August and September, and start discussions in October.”
“That's our plan so far. We don't know about China's timetable,” Yiin said.
CIER used two financial models to analyze the impact of an ECFA: the Global Trade Analysis Project (GTAP) adopted by most WTO countries prior to signing any free trade agreement, and a Taiwan General Equilibrium Model, which is an offshoot of GTAP, but tailored for the local economy.
EFFICIENCY: The rules for Philippine arrivals were revised after 17.6% of arrivals with symptoms tested positive, compared with 0.7% of those with no symptoms Starting today, Chinese spouses who hold a reunion permit can apply to enter Taiwan and travelers without symptoms from the Philippines do not need to be tested for COVID-19 upon arrival, but are to be tested after a 14-day quarantine, the Central Epidemic Command Center (CECC) said yesterday. Minister of Health and Welfare Chen Shih-chung (陳時中), who heads the center, said that from today, Chinese who are married to a Taiwanese citizen and hold a reunion permit can apply to the National Immigration Agency for entry into Taiwan. Chinese who are married to a foreign national and hold an accompanied reunion permit
PENGHU INSPECTION: Taiwan cannot let its enemies strut around in its airspace, Tsai said, one day after a Chinese spokesman denied a median line exists in the Taiwan Strait Following China’s assertion on Monday that there is no “median line” in the Taiwan Strait, President Tsai Ing-wen (蔡英文) yesterday pledged to defend the nation’s airspace during a visit to an air force base in Penghu, saying that Taiwan cannot allow others to flex their military muscle in its territorial airspace. Tsai praised the “heroic performance” of the pilots of the Indigenous Defense Fighters who have been intercepting Chinese People’s Liberation Army Air Force planes in recent days. “I have a lot of confidence in you. As soldiers of the Republic of China [ROC], how could we let enemies strut
CONSOLIDATION? Taiwan Thinktank deputy executive-general Doong Sy-chi said Beijing’s intimidation tactics are further alienating those who identify as Chinese Only 2 percent of respondents to a poll on constitutional amendments and national identity identified as Chinese, while 62.6 percent identified as Taiwanese, the Taiwan Thinktank said yesterday. Legislators have proposed amendments to the Additional Articles of the Constitution (憲法增修條文), which would change the definition of the nation’s territory, remove the Taiwan Provincial Government as an entity, prioritize the use of “Taiwan” for national groups at international events, and remove restrictions on defining the national emblem, national flag and national anthem. The poll showed that 80.5 percent of respondents agreed that the nation should participate as “Taiwan” at events organized by world
MISTAKE: The Global Covenant of Mayors for Climate and Energy is not a UN body, and the government is committed to protecting the nation’s name, Joseph Wu said The Ministry of Foreign Affairs yesterday condemned the Global Covenant of Mayors for Climate and Energy for listing Taiwanese cities as belonging to China on its Web site, and asked that it correct the error. The organization was inaugurated in Brussels in 2016 as a global coalition of mayors committed to reducing greenhouse gas emissions. Six Taiwanese cities at the time joined the coalition as cities in “Taiwan,” the ministry said. However, officials from the Kaohsiung City Government — one of the organization’s members — last week noticed that the city was now listed on the organization’s Web site as a