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.
PROVOCATIVE: Chinese Deputy Ambassador to the UN Sun Lei accused Japan of sending military vessels to deliberately provoke tensions in the Taiwan Strait China denounced remarks by Japan and the EU about the South China Sea at a UN Security Council meeting on Monday, and accused Tokyo of provocative behavior in the Taiwan Strait and planning military expansion. Ayano Kunimitsu, a Japanese vice foreign minister, told the Council meeting on maritime security that Tokyo was seriously concerned about the situation in the East China and South China seas, and reiterated Japan’s opposition to any attempt to change the “status quo” by force, and obstruction of freedom of navigation and overflight. Stavros Lambrinidis, head of the EU delegation to the UN, also highlighted South China Sea
The final batch of 28 M1A2T Abrams tanks purchased from the US arrived at Taipei Port last night and were transported to the Armor Training Command in Hsinchu County’s Hukou Township (湖口), completing the military’s multi-year procurement of 108 of the tanks. Starting at 12:10am today, reporters observed more than a dozen civilian flatbed trailers departing from Taipei Port, each carrying an M1A2T tank covered with black waterproof tarps. Escorted by military vehicles, the convoy traveled via the West Coast Expressway to the Armor Training Command, with police implementing traffic control. The army operates about 1,000 tanks, including CM-11 Brave Tiger
China on Wednesday teased in a video an aircraft carrier that could be its fourth, and the first using nuclear power, while making an allusion to Taiwan and vowing to further build up its islands, as it looks to boost maritime power, secure resources and bolster territorial claims. The video, issued on the eve of the 77th founding anniversary of the Chinese People’s Liberation Army Navy, featured fictional officers with names that are homophones of three commissioned aircraft carriers, the Liaoning (遼寧), Shandong (山東) and Fujian (福建). Titled Into the Deep, it showed a 19-year-old named “Hejian” (何劍) joining the group, sparking
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, said it expects its 2-nanometer (2nm) chip capacity to grow at a compound annual rate of 70 percent from this year to 2028. The projection comes as five fabs begin volume production of 2-nanometer chips this year — two in Hsinchu and three in Kaohsiung — TSMC senior vice president and deputy cochief operating officer Cliff Hou (侯永清) said at the company’s annual technology symposium in Silicon Valley, California, last week. Output in the first year of 2-nanometer production, which began in the fourth quarter of last year, is expected to
RSS