Sat, Jan 23, 2010 - Page 3 News List

INTERVIEW: ECFA will help Taiwan catch up with Asia: Ma

President Ma Ying-jeou spoke with several ‘Taipei Times’ reporters in an interview at the Presidential Office on Thursday, expounding on his government’s plan to sign an economic cooperation framework agreement (ECFA) with China. He tried to allay public qualms over the proposed pact, while emphasizing that an ECFA would be a crucial lever that would allow Taiwan to sign free-trade agreements with other countries

Ma: That’s true, but Taiwan cannot simply depend on somebody else’s promise to survive in this world.

TT: Judging by your words, you seem to suggest that we would be limited to signing FTAs only with those countries that have signed FTAs with China.

Ma: I heard that’s mainland China’s view. But when we negotiated an FTA with the US, China did not have an FTA with the US. The Chinese Communists and Singapore did not have an FTA when we began negotiations with Singapore.

So it shows that mainland China’s policy does not affect us. Our foreign policy and international relationships are independent.

If we sign an ECFA with mainland China, the pressure and obstruction to our effort to sign FTAs with other countries will be reduced.

The reason why we want to sign an ECFA is not other countries. If we don’t sign one, other countries will enjoy zero tariffs when they export products to China, while our products will lose their competitiveness because of higher tariffs.

TT: So that brings us back to our original question. Exactly where will the ECFA lead Taiwan, if it’s just the beginning?

Ma: First, it will help us catch up with the pace of economic integration in the region. There are 58 FTAs in Asia, but Taiwan has none. We have FTAs with our diplomatic allies in Central America, but we must remove the obstacles and sign more with other countries. The solution is to sign an ECFA with Beijing.

Cross-strait trade in 2008 exceeded US$130 billion, but there was no mechanism in place to institutionalize the trade. If there is such a mechanism, it will not only reduce obstructions to our effort to sign FTAs with other countries, but also increase the ratio of our products in the Chinese market.

An ECFA is conducive to Taiwan, but some local businesses will pay a price at the same time. We have conducted studies on the issue and held countless meetings to integrate opinions.

But it seems all of your questions presume that signing an ECFA will be negative to Taiwan. Do you think it’s better not to sign it?

TT: But Mr. President, you still did not answer our question: Where will the ECFA lead? Will the two sides [of the Taiwan Strait] eventually become a free-trade area or form a customs union?

Ma: Basically, the tariffs will be lower under an ECFA. A customs union is unlikely because both sides will have uniform tariffs. That will be impossible.

TT: So it will eventually be a free-trade area?

Ma: Something similar to a free-trade area, and that is in the spirit of the WTO. But I want to emphasize the WTO does not require any member to open its labor market and there are grace periods for the opening the market to some businesses.

TT: But GATT [the General Agreement on Tariffs and Trade, the WTO’s predecessor] stipulates that the contracting party must fully open markets in 10 years.

Ma: Yes, but some countries can explain to the Council for Trade in Goods if they believe 10 years is not sufficient. So such a regulation is not absolute.

TT: So can we then define the ECFA as an interim agreement to form a free-trade area?

Ma: An FTA or any similar trade agreement can have many forms. Some are called FTAs and some are called economic partnership arrangements, but they are all regional free-trade agreements under the WTO.

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