TAIPEI, Taiwan - President Ma Ying-jeou said yesterday that he very much regrets seeing the cross-strait trade in services pact stalled again in the Legislative Yuan.
Meetings on the pact at the Legislature on March 12 and 13 led to physical altercations between ruling party and opposition lawmakers.
The president said that the Economic Cooperation Framework Agreement (ECFA) has helped Taiwan a lot, but that the agreement's "early harvest list" covers only a fraction of goods traded.
The government would like to complete the trade in goods agreement with mainland China this year, but if the trade in services pact doesn't clear the Legislature, the trade in goods agreement will be put in jeopardy, Ma said.
Seeing the cross-strait service pact put off for almost a year after it was signed will lead Taiwan's trading partners to doubt the island's credibility and its sincerity in pushing for trade liberalization, the president said, urging the Legislature to pass the cross-strait services trade pact.
Despite being mired in an economic slump, sectors covered by ECFA have seen growth, and without ECFA, several industries may not have been able to weather the storm, Ma said.
Taiwan needs to step up its effort to open up its market in order to give itself a competitive edge, the president said.
Citing Taiwan's economic cooperation agreement (ECA) with New Zealand as an example, Ma said that bilateral trade between Taiwan and New Zealand has increased 73 per cent since the agreement was inked.
The fact is that Taiwan's economic growth is 70 per cent dependent on exports, Ma said, adding that if exports don't increase, unemployment will worsen.
The number of ECAs that Taiwan has signed is less than a fifth of South Korea's agreements with other countries, Ma said, adding that once South Korea claims its share of the market, it will be very hard for Taiwan to reclaim lost ground.
South Korea, Taiwan's largest trade competitor, has already signed FTAs with dozens of countries, the president added.
It's not that Taiwanese goods are inferior, the president said, stressing that it's the fact that South Korean goods are not subject to customs taxes.
Taiwan's commodity prices are relatively low, and despite lackluster economic growth, purchasing power remains one of the island's advantages, Ma said.
Since December last year, export orders registered a new high, indicating that the economy is improving at a gradual pace, the president said.
Although recovery won't be rapid, the Executive Yuan's Directorate General of Budget, Accounting and Statistics estimated that this year's growth will reach 2.82 per cent, whereas several institutions both foreign and domestic have given figures above 3 per cent, Ma said, adding that this year will prove to be better than the last.
Several enterprises performed well last year, and given that the business income tax has been decreased, firms should invest more and increase salaries within their means, Ma said, adding that consumption and investment are both important parts of economic growth.