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FTA preferable to common market, minister insists

Taipei Times

FTA preferable to common market, minister insists

By Jessie Ho


12 May 2005

The government will negotiate with Beijing to sign a free trade agreement (FTA) under the auspices of the WTO, rather than creating a cross-strait "common market," Minister of Economic Affairs Ho Mei-yueh said yesterday.

"It will be extremely difficult to establish a cross-strait common market," Ho told a legislative economic committee meeting at which cross-strait economic ties and the possibility of incorporating Taiwan and China into a common market were discussed.

The idea of a common market was raised by Chinese Nationalist Party (KMT) Chairman Lien Chan when he met Chinese President Hu Jintao in Beijing last month. Hu, however, prefers a Closer Economic Partnership Arrangement (CEPA) with Taiwan.

Ho said the idea of a common market is far-fetched.

"Members of a common market need to agree on the free flow of goods, labor, capital and services, which is unfeasible considering the huge gap in economic scale, customs structure and economic development between the two sides," she said.

So far, the EU is the only common market in the world, and the negotiation process for EU integration took 30 years, Ho said.

The government is not prepared to accept a CEPA with China, as Taiwan is a sovereign, independent country, while the CEPA implies a "one China" framework, she said.

Any negotiations about an FTA between Taiwan and China will have to be conducted by the authorities on both sides, not by private institutions, Ho said.

KMT Legislator Lee Jih-chu said that it does not matter what the platform for the talks is, as long as an agreement to eliminate bilateral trade barriers is inked as soon as possible.

Such an agreement would help to improve the nation’s economy, given China’s increasing importance to Taiwan’s economic development, Lee said.

According to figures released by the ministry, China has become Taiwan’s largest trading partner, with bilateral trade amounting to US$82.6 billion last year, or 18 percent of the nation’s total trade volume.

China is also Taiwan’s largest investment destination, attracting more than 50 percent of the nation’s overseas investment in recent years, according to the ministry.

Against the background of regional economic integration worldwide, and especially Taiwan’s exclusion from the so-called ASEAN plus three (China, Japan and South Korea), the nation should accelerate economic cooperation with China, Lee said.