Mon, Mar 16, 2009 - Page 3 News List

MAC official plays down ECFA fears

STAFF WRITER, WITH CNA

Taiwan must make efforts to sign free trade agreements (FTA’s) with countries such as the US and Japan, rather than inking an economic cooperation framework agreement (ECFA) with China, panelists attending a forum on cross-strait business cooperation said yesterday.

Citing the example of Hong Kong, National Taiwan University economics professor Kenneth Lin (林向愷) told the forum — hosted by the Taiwan Advocates — that once an ECFA with China was signed, more businesses would relocate to China, worsening the soaring unemployment rate and creating a “second wave of business exodus.”

It would also establish a “hub-and-spoke distribution network,” with China being the hub and Staff Writer, with CNA

The government’s proposed economic cooperation framework agreement (ECFA) with China will not trigger another mass exodus by Taiwanese industries to China, a Mainland Affairs Council (MAC) official said yesterday.

“The signing of the pact, similar to a free trade agreement, will help Taiwan build a wider and more solid basis for economic globalization,” Council Vice Chairman Fu Don-cheng (傅棟成) said.

Fu made the remarks in response to discussions at a colloquium held in Taipei by a number of academics who raised concerns that an ECFA would cause Taiwanese companies to relocate their investments or manufacturing operations to China on a large scale, which would increase unemployment and eventually drag the local economy down into a deeper quagmire.

He argued that the agreement could help to facilitate the globalization of Taiwan’s economy and attract more investment funds from abroad.

The pact would provide a better environment for Taiwanese businesses to globalize their operations and allow industries from the two sides to complement each other, so that Taiwan could gain a better position in the world’s economic landscape.

The possibility of signing an ECFA with Beijing has been fiercely discussed over the past few weeks, with the government saying that the proposal will not put Taiwan’s sovereignty at stake, saying that a trade agreement with China must be reached to maintain Taiwan’s economic competitiveness in the world market.

Fu yesterday said that after an ASEAN Plus One (China) agreement takes effect next year Taiwanese manufacturers, particularly petrochemical processors, will face much greater challenges, as China and the ASEAN states will be able to trade their products free from duty.

“An ECFA with China might provide a lifeline for Taiwanese businesses and we can say that without an ECFA, Taiwanese companies will probably move to China in a mass exodus,” Fu said.cargo and passengers going to multiple destinations passing through the hub, he said.

Lin said China was in no hurry to sign the economic pact, adding that it was seeking to denigrate Taiwan’s sovereignty during the negotiation process.

Wang To-far (王塗發), an adjunct professor of economics at National Taipei University, said it was wishful thinking that China would allow any member of ASEAN to sign an FTA with Taiwan. He did not believe Beijing would deliver on such a promise even if it made one, he said.

Despite the name change of the economic pact, Wang said the ECFA was “a contract to sell out Taiwan” and “a short cut to political unification.”

Wang said as Beijing has made it clear that the accord could be modeled on Hong Kong’s closer economic partnership arrangement (CEPA), Taiwan’s capital, technology and talent would rush to China, further hollowing out the local market.

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