China’s decision to end tariff reduction on some Taiwanese imports under the Economic Cooperation Framework Agreement (ECFA) early harvest lists is of a political rather than an economic nature, Premier Chen Chien-jen (陳建仁) said, adding that the government has been communicating with the industries most affected.
The Chinese Customs Tariff Commission on Dec. 21 last year announced it would terminate the reduced tariffs on imports of 12 Taiwanese petrochemical products, including propylene and paraxylene, starting on Monday last week.
China’s Taiwan Affairs Office spokeswoman Zhu Fenglian (朱鳳蓮) at the time said that Beijing is hopeful that cross-strait relations could “return to the right track of peaceful development,” and that negotiations to resolve trade disputes could begin “immediately” on the basis of the so-called “1992 consensus.”
Photo: Liu Hsin-de, Taipei Times
The “1992 consensus” refers to a tacit understanding between the Chinese Nationalist Party (KMT) and the Chinese Communist Party that both sides of the Taiwan Strait acknowledge that there is “one China,” with each side having its own interpretation of what “China” means.
In an interview with the Liberty Times (the sister newspaper of the Taipei Times) on Friday, Chen was asked about the government’s contingency in the event that Beijing further terminates the ECFA or some of the early harvest lists before the upcoming presidential and legislative elections.
In response, Chen said that before last month’s announcement, China already launched a unilateral probe into Taiwan’s restrictions on Chinese imports earlier in the year. So, the government has increased alertness and the Ministry of Economic Affairs has begun making an inventory of the industries that might be affected, he said.
The ministry has also communicated with businesses in the affected industries, mainly textile, petrochemical, machinery companies, he said, adding that the actual amount earned from exported items with tariff cuts under the ECFA has been decreasing.
Chen said the announcement was a decision that was not made through the ECFA negotiation mechanism, and that trade disputes could be handled through the WTO, of which both countries are members.
Facing China’s unilateral tariff move, the premier said the government must help the textile, petrochemical and machinery industries to diversify their export market destinations and upgrade their products to reduce reliance on the ECFA.
Rather then Beijing’s claims that Taiwan is facing a choice between “war and peace” and “prosperity and decline” in the upcoming election, it is a choice between “democracy and authoritarianism” and “freedom or autocracy,” Chen said.
If Taiwanese choose democracy and freedom, then Taiwan would have peace and prosperity, but if they choose authoritarianism and autocracy, it would lead to war and economic decline, he said.
Chen said Taiwan has good trade communications with the rest of the world, such as the US-Taiwan Initiative on 21st-Century Trade First Agreement Implementation Act signed last year, and that Taiwan is also signing trade-related deals with Canada and the UK, showing that Taiwan can comply with international high-standards trade rules.
Therefore, hopefully China would also trade with Taiwan under high-standard rules, rather than politicizing trade and using economic threats against Taiwan, he added.
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