The report found if Taiwan did not sign an ECFA with Beijing, the island’s gross domestic product would shrink by 0.179 percent, resulting in job losses for 47,000 workers. On the other hand, if Taiwan did sign an ECFA with the mainland, between 105,000 and 125,000 new jobs would be created, the report concluded.The uncertainties here are vast, probably too vast to make such claims. For one thing, no one knows the areas of agreement, and for another, they are almost certain to favor China. Consider the problems with the "fifth freedom" as the Taipei Times reported the other day (and Taiwan News has been editorializing about):
Workers in traditional manufacturing sectors and in the mining industry would be most adversely affected by ECFA, the report said.
In commenting on the report, CLA Deputy Minister Pan Shih-wei said that in the short term an ECFA could have an adverse impact on some Taiwanese industries, but in the long run the agreement would help make Taiwanese products more competitive.
The report also took into account what would happen after the free trade agreement of the Association of Southeast Asian Nations Plus Mainland China, South Korea and Japan.
The study looked at four possible scenarios. The best scenario for Taiwan would be if the mainland opened its market completely, while Taiwan only opened its market to industrial goods and products.
Under this best-case scenario, the main sources of new jobs would be the marketing, knowledge-intensive service and high-tech sectors. After an ECFA is signed, additional jobs for service assistants, machinists, manual laborers and technicians would be created as well, as the economy gradually improves.
Some jobs would be lost because of an ECFA, however. The garment and accessories industry could lose more than 5,500 jobs; the metal manufacturing sector could lose over 2,100 jobs; and other industries such as sports equipment and stationery manufacturing could lose some 2,500 jobs.
The fifth freedom of the air would allow Taiwanese carriers to fly on to other nations after arriving at airports in China, and vice versa.The pattern in Taiwan's agreements under the KMT is that Taiwan gets had. Why should ECFA be different? Consider also that not only are the particulars completely unknown, but further, there is no suggestion that if ECFA fails the nation should be permitted to abrogate the agreement. No one has planned for failure....
Chinese Nationalist Party (KMT) legislators Yang Li-huan (楊麗環) and Chu Fong-chi (朱鳳芝) suggested that the ministry take the opportunity presented by ECFA talks to discuss the matter.
Chu said Taiwan and China had failed to reach a consensus on the fifth freedom at previous cross-strait talks because if China agrees to the fifth freedom, it could risk Chinese carriers losing some customers to their Taiwanese counterparts.
The Ministry of Economic Affairs was quick to get out there with damage control:
Huang Zhi-peng, director of the MOEA’s Foreign Trade Bureau, explained that the differences in the estimates were the result of using different methods to gauge the impact of a cross-Strait ECFA on Taiwan’s job market. Moreover, Huang added that although the two estimates were different, both reports showed that a cross-Strait ECFA would have a positive impact on Taiwan’s economy.The financial industry should also make out like a bandit in the cross-strait agreements -- today the MAC put out a poll on the financial industry MOU. The poll was chiefly interesting for the questions it didn't ask, but on the last question, which asks whether Chinese banks should get tighter restrictions than other banks on their operations in Taiwan, the nearly 70% of the public said yes. How was this spun? The government was quoted as saying this:
Taiwan's top China policy body said Tuesday 52% of Taiwanese support the island's signing of financial memorandums of understanding with China, according to a survey by local TV station TVBS.Here are the first two questions that address the first paragraph:
Of the 1,084 people that answered the survey, 60% said signing the MOUs will help improve cross-strait financial cooperation, the Mainland Affairs Council said in a statement.
- 1. A cross-Strait MOU on financial services is a base document of cooperation to be signed by the financial regulatory authorities of both sides of the Strait for the exchange of information, confidentiality of information, regulatory mode, and mechanism of coordination. Do you think Taiwan should sign a cross-Strait MOU on financial service? (46.3% yes)
- 2. To date, we have signed MOUs on financial services with 32 countries or areas. Do you think we should negotiate and sign an MOU with the Mainland? (52% yes)
In other economic news, the unemployment rate trimmed to just slightly above 6% and the fall in commercial sales slowed -- according to the article, Taiwan is now climbing into recovery by riding the China boom. Taiwan's pariah status is forcing it to choose a carbon tax at home instead of paying carbon tariffs abroad. The new tax cuts have the government refunding billions to local taxpayers.
REF: A friend flipped me this article from The Age on Australia's losing free trade agreements, NAFTA from EPI. Both articles make essentially the same point: free trade agreements regulate sovereignty over trade, but do not increase trade or jobs. Of course we all know the whole point of the relationship between ECFA and local sovereignty...
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