President Ma Ying-jeou (馬英九) yesterday said the economic cooperation framework agreement (ECFA) his administration seeks to sign with Beijing is a transitional arrangement for a free-trade agreement (FTA), but stopped short of saying whether an ECFA would eventually lead to a “cross-strait common market.”
“An ECFA is an FTA signed in a piecemeal manner,” he said. “The difference is that an ECFA is an agreement that is smaller in scale but necessary.”
Ma made the remarks at a Central Standing Committee meeting of the Chinese Nationalist Party (KMT) in his capacity as party chairman.
Ma played down concerns that the planned accord would allow more Chinese workers to enter the Taiwanese market.
“Any FTAs or similar trade deals between two economic entities never address labor issues because only at much later phases will such matters be addressed. It is possible [to touch on that issue] when an FTA becomes a customs union and later becomes an economic common market, but it is not definite,” he said without elaborating.
Ma said that some Taiwanese products would enjoy lower or zero tariffs once an ECFA is signed.
“If there are two stores, one selling goods with tariffs and the other without any, which one will you go to?” he asked. “Even if the store with tariffs can survive for a while, it cannot hang on forever. That is why we want to sign an ECFA with the mainland … We want to be the store with zero tariffs.”
The accord would also not touch on the agricultural sector, Ma said.
During the second round of negotiations on an ECFA in Taoyuan two weeks ago, Ma said both sides agreed not to include agriculture in the trade deal. China agreed not to ask Taiwan to allow more Chinese agricultural products to enter the local market and that tariffs on the 1,415 items already allowed would not be reduced, he said.
China also promised to “do its best” not to let Taiwanese traditional businesses that are already suffering take an additional hit once an ECFA is signed, he said.
Ma said the agricultural sector did not suffer after Taiwan joined the WTO in January 2002. Instead, the trade volume of agricultural products increased by US$276 billion despite a dropping number of agricultural workers.
“The industry will make the necessary adjustments and gradually tide over a crisis,” he said.
Council of Agriculture Minister Chen Wu-hsiung (陳武雄), who delivered a report at the committee meeting, said he would step down if more Chinese agricultural products were allowed into Taiwan during his tenure.
Chen said an ECFA would only lead to economic prosperity and that Taiwan would be doomed without it.