The Cross-Straits Economic Cooperation Framework Agreement (ECFA) is paying handsome dividends for Taiwan, spurring significant tariff savings and business growth, according to the ROC Ministry of Economic Affairs Dec. 22.The article goes on to give "details" about the great economic growth under the ECFA Cargo Cult regime. But first I thought I drag out overall numbers so we could get a feel for ECFA's effect on the exports to China. Here are the numbers for 2004-11 for value of exports to China in million$ (DGBAS):
The pact came into effect in Sept of 2010. Here are numbers through Oct for 2012 (million$):
Ten month total: 66,957
Assuming we get $8,000 million for Nov and Dec, that would put 2012 at $83 or $84 billion. Roughly the same as last year. Of course, the global economy is in a nasty sustained downturn thanks to the austerity insanity in Europe and the total indifference of American elites to the fate of the US economy and the individuals who inhabit it, so we shouldn't be expecting too much anyway. But let's graph these numbers so we can view the trend line:
Anyway, the Taiwan Today piece gave some more breathless numbers:
The latest MOEA statistics show that from January 2011 to October this year, the ECFA generated US$551 million in tariff savings for local firms and farmers.Jan 2011 through Oct 2012, tariff savings of $US 551 million on a hair over $150 billion in exports to China. That means that the total savings are roughly 1/300 of the export total. How big can the effect be? After all, shifts in the value of currency, labor costs, or inflation are much greater...
In case you were wondering about the trend for 2012 through November, exports to China are down 5.5%, to ASEAN 6 up 9.3%, and to America down 10%. Yay ECFA!
We then get some numbers in percentages....
For the first 11 months, agricultural exports to mainland China were US$146 million, up 36.47 percent year on year. Oranges, live groupers and tea leaves top the list at 103.76 percent, 32.22 percent and 11.89 percent, respectively.The wording is strange. I think the author meant to say that the exports to China were UP $146 million. Otherwise, the second sentence makes no sense as written. Indeed, the DGBAS numbers have ag exports to China at $630 million through Oct of this year for a y-o-y rise of 17%, well more than $146 million. Because of the way this was worded last year, I suspect that this wording is actually meant to apply to the early harvest agricultural goodies and not to ag exports as a whole.
I've blogged on this issue several times. Let's just repeat what I wrote last year at this time because it is still apropo:
The COA then goes on to make my bullshit sensor signal a five alarm fire:The numbers are basically in the same proportions, just larger. Grouper and tea still account for the bulk of the rise in exports to China. The 103% rise for oranges is probably from a very small base, no doubt why percentages and not absolute numbers are given. The comforting idea that ECFA is going to save the poor farmers of southern Taiwan is a con. Unless you raise grouper -- fish and related products account for 2/3 of the island's agricultural exports (data source) -- you are not making money off agricultural trade. That post I wrote last year also explains why the profits are not going to Taiwan.
In the Jan.-Oct. period, Taiwan farm produce exports to China, in 18 categories that were included on an ECFA early harvest list, totaled 14,242 tons at a value of US$95.7 million, according to Chang.Ok, in the 18 ag product categories, there was a total gain of US$95.7 million. Now hold still, because a couple of paragraphs later come some numbers.
In the 18 categories, the sale of live groupers surged by a whopping 192 percent year-on-year to an export value of US$79.66 million, she said. Chang attributed the increase mainly to the ECFA “early harvest” tariff concession program and the opening of 15 Chinese seaports for direct shipping links.So... maybe I am reading this wrong, but of the $95.7 million increase, $79.66 million is groupers. 83% of the increase is from one product! Add the number given by the spokesperson for tea exports, $7.37 million, and 90% of the gain is from just two products. We're not succeeding in agricultural products, just in raising fish. Subtract that $79.66 million and the agricultural deficit sucks -- which shows how important definitions of what counts as agriculture are -- most people when they hear the word "agriculture" don't think of fish.
Taiwan runs an agricultural trade deficit with China proper but when you throw in Hong Kong, counted separately in the Taiwan figures, it seems that Taiwan still runs a slight ag trade surplus. Japan, China, and Hong Kong are first, second, and third as agricultural trade destinations (DGBAS). Against that, there's likely a flood of smuggled agricultural goods from China not counted in the trade figures (see this article).
Despite the hype, agricultural exports to China are not flying out of the containers. Rather, they consist of a couple of high value items whose profits are concentrated in a few powerful hands. This is why China cannot woo the south with the promise of agricultural concessions. Because they have no appeal for the vast majority of farmers.
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