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Updated Monday, March 30, 2009 9:22 am TWN, The China Post news staff

ECFA to increase Taiwan's GDP by 1.37%: Yiin

TAIPEI, Taiwan -- Yiin Chii-ming, minister of economic affairs, said yesterday the economy will grow next year if an economic cooperation framework agreement (ECFA) is signed between Taiwan and China. Without the ECFA, Yiin warned, the economy will shrink.

He told a seminar on regional economic integration and economic cooperation across the Taiwan Strait that the gross domestic product will increase by 1.374 percent in 2010 when the ECFA goes into force.

“If not,” Yiin predicted, “our GDP will shrink by at least one percent.”

The rise or fall in GDP depends on whether the ECFA is in effect on January 1, when the ASEAN-plus-One free trade zone is formed. Ten member states of the ASEAN (Association of Southeast Asian Nations) and the People's Republic of China form the zone, which will include Japan and South Korea by 2015.

Taiwan is excluded from the ASEAN-plus-One. If the ECFA isn't in force, its exports to China and ASEAN states will be taxed.

“We will be marginalized,” Yiin said, “because our products will be taxed out of the Asian market.”

All export-dependent manufacturing industries supported the conclusion of the ECFA. Among those to be seriously affected are the petrochemical, machinery, automobile component, electronics, and sports gear and equipment industries.

Their leaders who took part in the seminar at the Taiwan University Conference Hall urged that the ECFA be signed as soon as practicable.

Another problem Taiwan will face if the ECFA isn't signed, Yiin said, is the loss of jobs. The loss of at least 10,000 jobs is estimated. Time is running short as negotiations, which Yiin said are under way, may take months to complete.

Yiin refused to detail what issues are being negotiated.

“All I can say,” Yiin said, “is that those issues included in the 'early harvest' will be solved first, and the ECFA is an open-ended arrangement that isn't like an FTA (free trade agreement), which will get things done all at once.”

Problems that have to be solved without delay include a tariff arrangement and protection of Taiwan businesses in China.

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