CLA unveils report on ECFA pros and cons

The report also showed that Taiwan's gross domestic product (GDP) may shrink by 0.179 of a percentage point if Taiwan fails to ink the ECFA with China.

By contrast, the island's GDP may gain 0.7 to 0.824 of a percentage point from the signing of the pact.

It was also found that the job openings to be created by the signing of the ECFA will be mostly for service personnel (around 43,400), mechanical operators (29,300), and technicians (28,300), among others.

But the above-mentioned types of employees will suffer the most in terms of employment if Taiwan fails to ink the ECFA with mainland China, because employers will be forced to automate their production to reduce operating costs.

CLA commissioned the Chilee Institute of Technology to work out the study report based on a “static simulation” mode, which is different from the “dynamic simulation” mode adopted by the Chung-Hua Institution for Economic Research (CIER) in carrying out a study report on the same topic, commissioned by the Ministry of Economic Affairs. Accordingly, the conclusions of both study reports can hardly be compared with each other, CLA officials stressed.

The “static simulation” mode excludes some factors such as the effect of the aggregation of capital funds, and the effect of export expansion on employment.

Based on the “dynamic simulation” mode adopted by the CIER, Taiwan's GDP may surge 1.65 to 1.72 percent and its employed population may increase 260,000 people if Taiwan signs the ECFA with China.

In related news, Economic Minister Shih Yen-shiang said yesterday that Taiwan will stand firm when negotiating with China on the proposed ECFA by seeking to exclude the import of Chinese labor, agricultural products and some industrial goods from the pact,

“We will do everything possible to prevent the imports of Chinese workers as well as China's 830 agricultural products and more than 1,000 industrial items from being included in the accord,” Shih said when responding to lawmakers' questions during a committee meeting of the Legislative Yuan.

Citing the latest statistics compiled by China's Ministry of Commerce, legislator Su Chen-ching said China will benefit four times more than Taiwan if the two sides clinch such an agreement.

He accused the government of seeking to sign what he called “an unfair and humiliating pact.”

But Shih refuted Su's argument, saying China's figures were assessed based on an assumption of a full market opening by Taiwan. Shih added that his ministry has worked out countermeasures to deal with the impact from China once an ECFA is signed.

According to the report by the Chinese Ministry of Commerce, a Taiwan-China ECFA will help China realize a 0.63 percent increase in its GDP (gross domestic product), or US$27 billion in value, while Taiwan will enjoy a 1.72 percent growth in GDP, worth about US$6.9 billion.

Critics of the economic agreement, which is similar to a free-trade agreement, have said it will flood Taiwan with cheaper Chinese products and threaten Taiwan's industries, putting many people out of work.

Proponents of the agreement, including President Ma Ying-jeou, have insisted the agreement is necessary in order to help Taiwan maintain its competitiveness, as China is planning to sign similar trade pacts with other countries in East and Southeast Asia, which would allow those countries to import items to China tariff-free.

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