An academic yesterday described a controversial proposed economic cooperation framework agreement (ECFA) between Taiwan and China as a buffer that would protect industries vulnerable in an open market and said Taiwan’s only choice was to fully open its markets.
Facing economic integration among countries in the region, Taiwan has only one way out and that is to fully open its markets and seek liberalization, Thomas Lee (李桐豪), a professor of finance at National Chengchi University (NCCU), told a conference in Taipei weighing the pros and cons of signing an ECFA.
Lee, a former People First Party legislator, said that since 1620, trade has played a vital role in Taiwan’s development and that an ECFA was vital to ensure the survival of Taiwanese.
The most important trade activities in Asia over the past decade, he said, were the signing of free-trade agreements (FTA).
WTO statistics show that 276 agreements related to free trade have been finalized globally, he said, adding that 33 more are either under negotiation or have been announced.
Asian Development Bank statistics show there are 192 FTAs in Asia, he said.
“Unfortunately, Taiwan is not involved in any of them,” he said, adding that this contributed to the threat of marginalization.
The only problem involving an ECFA is whether the government can protect industries that would be harmed when the country’s market is opened to foreign competitors, he said.
“The government must enhance its ability to handle the consequences of signing an ECFA, such as unemployment and a widening gap between rich and poor,” he said.
Hsu Chung-hsin (�?H), a law professor at NCCU, said that according to WTO rules, 10 years after signing an ECFA, Taiwan would be forced to expand free trade with China to cover between 90 percent and 95 percent of trade in goods and services.
“The government has been saying it will not further open the country to Chinese agricultural products, but all 271 free-trade agreements and regional trade agreements registered at the WTO include agricultural products,” Hsu said.
Hsu said the government would be unable to turn the country into a financial hub in the Asia Pacific region unless it signed free-trade agreements with the EU, the US, and Japan in addition to an ECFA with China.
ADDITIONAL REPORTING BY CNA
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