While President Ma Ying-jeou’s (馬英九) administration has been trumpeting the expected economic benefits of the Economic Cooperation Framework Agreement (ECFA), which was signed in 2010, the latest statistics from the Ministry of Audit and the Ministry of Finance show otherwise.
According to the Ministry of Audit, preferential tariffs that took effect in January 2011 on a list of “early harvest” products as defined by the agreement have only had a limited contribution to the total value of cross-strait trade.
The Ministry of Finance’s data also showed that from 2011 to last year, the nation’s trade surplus has diminished each year, with last year’s trade surplus being NT$36 billion (US$1.2 billion) less than that of 2011.
The Executive Yuan, responding to the Ministry of Audit, said that because the products on the early harvest list count for only 7 percent of the total items that carry export tariffs, they have only a limited impact on the growth of overall trade value.
National Taiwan University economics professor Kenneth Lin (林向愷) said the numbers show that Ma’s hyping of the gains that have been achieved by the ECFA has been a lie, adding that the Ministry of Audit’s report is a slap in the president’s face.
The Ma administration chose to underline only the number of products on the early harvest list and failed to negotiate for the substantive liberalization of certain goods that could have benefited Taiwan the most, Lin said, citing flat-panel displays and automobiles as examples that have been excluded from the tariff concession list.
The economics professor said that the limited substantive benefits of the agreement is a result caused by the Ma administration’s policy of openness toward Beijing.
The government had argued that the ECFA’s signing could create at least 260,000 job opportunities in the nation, correlating to a 2 percent decrease in the unemployment rate, but there has been less than a 0.5 percent decrease, said Lin, who attributed Ma’s championing of the agreement to the president’s pro-China ideology.
According to the finance ministry’s Customs Administration, total goods exports to China were valued at US$83.9 billion in 2011, US$80.7 billion in 2012 and US$81.7 billion last year; the trade surpluses were US$40.3 billion, US$39.8 billion and US$39.1 billion respectively.
Of the total goods exports, the gross export value of the items enjoying preferential tariffs on the early harvest list were US$17.9 billion, US$18.5 billion and US$20.5 billion and the surpluses were US$12.9 billion, US$13.6 billion and US$15.5 billion respectively.
The Ministry of Audit said that the total value of cross-strait trade has seen a limited uptick since the early harvest list came into effect, to which the Executive Yuan responded that it would continue its negotiations with Beijing to secure better terms.
Since the benefits yielded by the agreement have contradicted the government’s expectations, it should reassess the effect of the yet-to-take-effect cross-strait service trade agreement and the proposed agreement for cross-strait trade in goods, Lin said.