President Ma Ying-jeou (馬英九) yesterday said the government was ready to address problems that could emerge after an economic cooperation framework agreement (ECFA) is signed with China, adding that he would protect the rights of local workers and traditional industries.
Ma, in his capacity as Chinese Nationalist Party (KMT) chairman, defended his administration’s plan to sign an ECFA with China ahead of a debate on the economic pact with Democratic Progressive Party (DPP) Chairperson Tsai Ing-wen (蔡英文) on Sunday, adding that an ECFA would bring the country advantages with few disadvantages.
“The government is certain about the direction we are heading, but we will not hide the negative impact of an ECFA. We are prepared to help local workers and industries that will be affected,” Ma said during a KMT Central Standing Committee meeting at party headquarters.
The Straits Exchange Foundation and the Association for Relations Across the Taiwan Strait completed a second round of negotiations on an ECFA in Taoyuan last month and are scheduled to hold the next round in China at the end of this month.
The Ma administration hopes to sign an ECFA in June.
Citing a report by the Chung-Hua Institution for Economic Research, Ma said an ECFA would create 260,000 jobs in Taiwan, while about 80,000 workers could lose their jobs or suffer lower salaries as a result.
The government plans to set aside NT$95 billion (US$3 billion) within the next 10 years to assist traditional industries and protect their interests.
Presenting a report on the development of traditional industries after an ECFA is signed, Council of Labor Affairs (CLA) Minister Jennifer Wang (王如玄) yesterday dismissed concerns manual workers’ salaries would drop if Taiwan signed an ECFA with China and said the average pay of workers would not be adjusted as the quality of local workers was much higher than that seen in China.
In related news, Minister Without Portfolio Yiin Chii-ming (尹啟銘) yesterday challenged media reports that cast doubt on the benefits of an ECFA with China, saying the deal would encourage businesses to keep their roots in Taiwan.
In a story yesterday, the Chinese-language Liberty Times (the Taipei Times’ sister paper) said an ECFA would facilitate the relocation of local businesses abroad, which would exacerbate local unemployment and cause a contraction in domestic consumption.
Kenneth Lin (林向愷), a professor of economics at National Taiwan University, made the comments following statistics released by the Ministry of Economic Affairs on Tuesday that said 50.69 percent of Taiwanese export orders last month were produced overseas, marking the first time the percentage exceeded 50 percent.
“What Lin expressed concern about is exactly why Taiwan needs to sign an ECFA with China — to reduce certain tariffs,” Yiin told a press conference.
Yinn said the percentage of Taiwanese export orders being produced overseas during the former DPP administration jumped 33.7 percent, from 13.3 percent in 2000 to 47.8 percent in 2008.
“Local companies moved overseas under DPP rule as it opposed a similar agreement with China and implementation of direct cross-strait transportation,” Yiin said.
Meanwhile, Yiin rebutted a Business Weekly report that questioned comments made by Yiin that “an ECFA would not necessarily lead to a free-trade agreement [FTA] eliminating tariffs on 90 percent of commodities within 10 years.”