President Ma Ying-jeou’s (馬英九) administration’s deletion of a safeguard chapter on Chinese imports could result in an influx of cheaper Chinese products to the domestic market, with devastating effects on local small businesses and the agricultural sector, a lawmaker said yesterday.
“[The deletion] brought me great distress and I found it unacceptable … The government had no reason to retreat from its current position,” Taiwan Solidarity Union (TSU) Legislator Hsu Chung-shin (許忠信) said at a press conference, calling for a special relief mechanism to protect local businesses from the potentially damaging effects of cross-strait trade liberalization.
The Ministry of Economic Affairs, the Ministry of Finance and the Council of Agriculture jointly announced on Monday last week an amendment to the Rules for Handling Import Relief Cases (貨品進口救濟案件處理辦法), in which the chapter on “import relief against products under the early harvest from Mainland China” was deleted.
Special safeguard mechanisms are allowed under the WTO, of which both China and Taiwan are members, Hsu said. Given that the Economic Cooperation Framework Agreement (ECFA) between China and Taiwan goes farther in liberalizing trade than the WTO, that mechanism is much more necessary, he added.
Under the deleted chapter, Taiwan was able to adjust tariffs and import quotas of Chinese imports, as well as provide financing or subsidies to especially hard-hit local businesses.
Juan Chuan-ho (阮全和), acting executive secretary of the economics ministry’s International Trade Commission, said the deletion was necessary after China’s transitional product-specific safeguard mechanism, a pledge Beijing signed at the time of its accession to the WTO in 2001, expired on Dec. 10 last year. Otherwise, China could retaliate against Taiwan-made products or file a complaint via the WTO dispute settlement mechanism, Juan said.
Juan said a safeguard mechanism and regulation would be included in the negotiation of the cross-strait trade in goods agreement.
However, National Taiwan University agricultural economics department head Roger Woo (吳榮杰) and National Chiayi University associate professor of applied economics Lin Chi-yuan (林啟淵) were both quoted by the Liberty Times (the Taipei Times’ sister newspaper) as saying that filing a lawsuit against Taiwan via an international organization was the last thing China would want.
“Protecting domestic industries should be the priority,” Woo was quoted as saying.