Economist blasts ECFA as poisonous

BAD IDEA: An economist criticized the proposed trade agreement, saying it would only make Taiwan even more reliant on China and put national sovereignty at risk

By Ko Shu-ling  /  STAFF REPORTER

Wed, Mar 31, 2010 - Page 3

There are many options to choose from to help boost Taiwan’s ailing economy, but an economic cooperation framework agreement (ECFA) the administration seeks to sign with Beijing is the worst of them all, an economist said yesterday.

Taiwan Thinktank chairman Chen Po-chih (陳博志) said Premier Wu Den-yih (吳敦義) asked government agencies to carefully study the possibility of raising the housing tax by a small amount, but was determined to push through an economic pact destined to change the course of the country’s development for decades with minimum discretion.

The Ministry of Economic Affairs says that the proposed agreement will boost GDP by nearly 1.7 percent and create more than 250,000 jobs. Chen, however, questioned the accuracy of the numbers, saying the methodology and models of the study were problematic.

Describing the trade pact as “sugar-coated poison,” Chen said that an ECFA would increase Taiwan’s economic reliance on China. He urged the public, including unification supporters, to oppose the planned pact, which he said would weaken the force propelling China to democratize.

The administration must reach out to the public and the opposition to seek consensus on this controversial issue, he said, preferably by holding a referendum.

He also called on the administration to seek trade agreements with other countries or refuse to let an ECFA take effect unless the trade pacts with other countries are signed.

Chen said he was not a troublemaker, but he wanted the administration to admit to its mistake. If he turned out to be wrong, Chen said, he would like to know why and how. If the administration is wrong, it needed to admit it, he said.

He made the remarks when ­promoting his new book, ECFA — The Unspeakable Secret, in Taipei yesterday morning.

Chen said the government had overestimated the benefits of an ECFA and underestimated its drawbacks. An ECFA is an interim trade pact for a free-trade agreement according to WTO rules, Chen said. After the proposed pact is signed, Chen said, more than 90 percent of Taiwan’s exports to China would enjoy zero tariffs and vice versa.

“The administration does not dare tell us of the negative impacts on local businesses and is turning a deaf ear on their doubts,” he said. “They are unwilling to clearly explain what it is because it is a secret they cannot afford to tell.”

Likening the signing of an ECFA with China to fishing, Chen said China’s blocking of other countries signing trade deals with Taiwan was like a fisherman driving fish from all sides so they had only one place to go.

Chen said there were many alternatives available, but the way the administration is demonstrating its interest in signing an ECFA with China by a certain time is like a man at a store declaring that he needs to buy a TV by 11am, leaving himself little room to negotiate. What was worse, Chen said, the man did not have a back-up plan.

“One of the back-up plans is not to buy it,” he said.


Also See: Panel, financial services not included in ECFA talks