Mon, Jun 15, 2009 page3

• FEATURE: Academics dread long-term impact of ECFA

  • By Chung Li-hua / STAFF REPORTER
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  While the government has polished the image of the proposed economic cooperation framework agreement (ECFA) with China by saying that it will ban imports of 830 Chinese agricultural products, a number of agricultural experts said that while the ban might initially be effective, it would be difficult to enforce in the long term.

  Saying that China’s agricultural industry frequently changes, agricultural academics worried that once an ECFA is signed, not only would the already substantial cross-strait agricultural trade deficit increase, but would also leave no room for Taiwan’s agricultural sector to expand, leaving it in a precarious position.

  Council of Agricultural Affairs Minister Chen Wu-hsiung (陳武雄) said Taiwan would insist that the ban on Chinese products be upheld in future cross-strait negotiations. The government would not budge if China insisted that Taiwan allow more Chinese agricultural imports, he said.

  The ban, which includes rice, peanuts, garlic, Chinese cabbage and cauliflower, is meant to avoid price wars in Taiwan and to protect farmers.

  Saying that many countries have signed free-trade agreements (FTA), Chen previously said that if Taiwan did not join the ranks of countries with FTAs, it would become an economic orphan. A cross-strait agreement would expand Taiwan’s market via China, which will soon join ASEAN. China would serve as a bridge for Taiwanese exports to other areas and Taiwan would enjoy lower customs fees, he said.

  Director of National Chung ­Hsing University’s economics department Huang Tsung-chi (黃琮琪), however, said that although Taiwan had always blocked agricultural imports from China, Chinese products could still be found in Taiwanese marketplaces.

  In addition to smuggling, Huang said, imports via third countries makes it possible to falsify the country of origin. Chinese garlic, for example, is often passed off as a Vietnamese product.

  The products also enter Taiwan after processing, or as frozen products. If the government is unable to enforce controls, the local market will gradually be undermined, he said.

  Huang said that experiences in other countries that have signed bilateral trade agreements show that the impact of an agreement will not be very obvious in the short run, but that businesspeople eventually find a niche and import the right product at the right time. The impact will be felt over time, however, Huang said.

  As Taiwanese land and labor costs are higher than China’s, imports of Chinese products could lead to the extinction of the Taiwanese agricultural industry, he said.

  Wu Jung-chieh (吳榮杰), a professor of agricultural economics at National Taiwan University, said that simply banning imports was not enough. An ECFA agreement would mean an intensification of cross-strait trade and Taiwan’s agricultural technology and products would flow to China.

  This would have an impact on the marketability of Taiwanese products — and such products could even flow back to Taiwan, Wu said.

  Wu said China has always had designs on Taiwan’s agricultural sector. At this stage, it wants to use its big markets to attract Taiwanese farmers, but once the industry has developed and its political goals have been achieved, it may demand deregulations.

  Taiwan would do better without an ECFA, Wu said, as it would only benefit a minority while harming Taiwan’s underprivileged farmers and national sovereignty.

  Wu Ming-min (吳明敏), an honorary professor at National Chung Hsing University, said the government would continue to be pressured to further open Taiwan to Chinese agricultural products, as China would seek to increase its own benefits from an ECFA.

  Although a ban is still in place on more sensitive products, Taiwan’s deficit in cross-strait agricultural trade last year reached NT$10 billion (US$280 million). Wu said the situation would become worse if an ECFA were signed and that the local agricultural economy would go into recession, with rising unemployment.
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