| The Economic Cooperation Framework Agreement (ECFA), reached in late June, has been hailed by Taiwan economists as a solution to stabilize cross-Strait economic ties and boost local business.
The present state of Cross-Strait economic relations gives investors confidence in future trade and makes things more predicable, said Roy Chun Lee, associate research fellow with Taiwan WTO Center under the "Chung-hua Institution for Economic Research," at a seminar here Friday.
"For any investor who wants to invest in the region, a stable policy environment is the most important. The ECFA has sent such a message that the two sides have agreed on where the economic relations will go in the future," Lee said.
The two sides will continue discussing agreements on commodity trade and service trade six months after the ECFA takes effect.
"Having the experience of reaching the ECFA, we believe the interactions in future talks will be positive and favorable," Lee said.
Prof. Jr-Tsung Huang, with the Department of Public Finance, Chengchi University, said reaching the ECFA with the mainland came from internal needs of Taiwan and will no doubt boost the economy.
"The most obvious effect will be more frequent and freer exchange of talents. If Taiwan companies want to explore the mainland market, it will send more employees from Taiwan to the mainland and more mainland people will work in Taiwan in the future if cross-Strait business really booms," Huang said.
In addition, the island will be able to join regional economic integration with the ECFA, he said. "Taiwan can be a bridge between international investors and the mainland. To realize the scenario, we can open our market wider to other countries, even unilaterally."
However, the economists agreed that the ECFA would not be given full play if the island was not well prepared.
The authorities should provide proper assistance to Taiwan companies which want to expand into the mainland market, as most local companies are of a smaller size than their mainland competitors, Huang said.
Taiwan authorities have promised 95 billion New Taiwan Dollars (2.97 billion U.S. dollars) to help vulnerable industries cope with the effects of the ECFA.
Besides the policy of offering subsidies, the authorities should also provide technical support to help these business upgrade or target other sectors, said Shieh Muh-tarng, associate professor with the Department of International Trade, Jinwen University.
From a long-term perspective, more resources should be spent on education, research and development so that Taiwan's leading industries can maintain their advantages, he said. |
