Bad-for-RP Taiwan-China FTA not likely to be signed soon

ANALYSIS

TAIPEI: Taiwan and China were “stuck” in negotiations on their trade pact, the island’s premier said Saturday, in the latest sign that the two sides may miss this month’s deadline for concluding the agreement.

“We are stuck on some items as certain Taiwanese industries will lose their competitiveness without tariff reductions but some Chinese industries are concerned about the impact,” Wu Den-yih said in a statement.

Wu’s statement was issued on the eve of the third round of talks on the Economic Cooperation Framework Agreement (ECFA), to be held in Beijing Sunday.

“We would rather sign a good ECFA than an early one,” Wu said, despite his government’s pledge to conclude the deal in June.

“The government is not certain if it can make a breakthrough in the shortest time… It depends on whether we can overcome the points we are stuck on.”

Last month Taiwan’s Vice Economic Minister Lin Sheng-chung indicated that the pact’s June deadline might be missed, saying that “we would rather postpone it should the two sides find the results of the negotiations unacceptable.”

The pact is expected to include a list of industries that will benefit from preferential tariffs, as well as measures to protect intellectual property rights, according to Taipei officials.

But opponents say stronger competition from China will cost jobs and that the accord will make the island more dependent on the mainland.

Taiwan and China have been governed separately since a civil war in 1949, and Beijing considers the island part of its territory awaiting reunification, by force if necessary.

Not only Taiwan industrial groups are worried about the impact of a Taiwan-China free trade agreement on their situations.

Philippine overseas Filipino workers in Taiwan are also concerned that if the Taiwan factories they are now working for move to China as a result of the FTA, the (Filipino workers) would lose their jobs.

Philippine economic managers have also expressed concerns that once Taiwan-China FTA goes into effect, many Taiwan investors will no longer wish to be in the Philippines, There would even be a pullout of Taiwan locators now happily in operation in Subic.

These concerns were among the possible adverse impacts of the possible firming up of the Economic Cooperation Framework Agreement (Ecfa) between China and Taiwan that National Economic and Development Authority (Neda) director Dennis Arroyo said in April were taken up at a Nefa meeting with President Gloria Arroyo.

After that meeting, President Arroyo told reporters her administration considered the Ecfa a “threat” because this would attract Taiwanese investments and tourists away from the Philippines and into China.
The most “immediate” impact of the signing of the Ecfa, Dennis Arroyo said, would be a decline in Taiwan tourist arrivals in the Philippines. –AGENCE FRANCE-PRESSE WITH INPUTS FROM MANILA TIMES