President Ma Ying-jeou met with Japan External Trade Organization (JETRO) Chairman Yasuo Hayashi at the Presidential Office on the morning of June 22. The president, on behalf of the government of the ROC, extended a cordial welcome to Mr. Hayashi and expressed his hope that JETRO will assist in boosting bilateral trade and interaction between Taiwan and Japan.
The president noted that in the 51 years since its founding, JETRO has set up over 30 offices throughout Japan and over 70 branches around the world. This extremely important trade organization has long worked to expand Japan's trade, introduce foreign investment to Japan, and aid in the development of small- and medium-sized enterprises, the president said, adding that everyone is well aware of the achievements of JETRO.
President Ma remarked that Japan is Taiwan's second largest trading partner, while Taiwan is Japan's fourth largest trading partner. Last year, bilateral trade hit US$64 billion, with Taiwan's exports to Japan valued at about US$17.5 billion and imports from its northern neighbor amounting to about US$46.5 billion. In addition, Japanese firms have invested enormous sums in Taiwan and taken part in many of Taiwan's major public infrastructure projects. President Ma said that these facts point to the close economic and trade ties between the two. He also expressed his view that there will be even more opportunities for cooperation in the future. He said he has specially designated 2009 as "The Year to Foster the Special Partnership between Taiwan and Japan" with the hope of further expanding trade and investment, as well as cultural interaction and contacts between officials from the two countries.
President Ma furthermore said that the ROC is extremely reliant on external trade, with exports comprising 64% of the nation's GDP. Even though Taiwan entered the World Trade Organization in 2002, limited progress has been seen among the world's nations in multilateral negotiations. In response, countries have been aggressively drafting and entering into free trade agreements. This is the weakest link for the ROC, he said. Due to pressure exerted by mainland China on the diplomatic front, the ROC has found it quite difficult to negotiate and realize free trade agreements with other countries, President Ma said.
In response to interest expressed by Mr. Hayashi in the development of trade and economic ties between Taiwan and mainland China, President Ma explained that the two sides have signed nine agreements over the past year covering transportation links, the liberalization of tourism, food safety, and mutual judicial assistance. In the future, he said, agreements will be extended to provide oversight of the financial sector. The president said he believes these initiatives are aiding in the normalization of cross-strait economic and trade ties, and are helping to reduce tension in the Taiwan Strait. In addition, he said, both sides are now mulling negotiating an economic cooperation framework agreement (ECFA). The main objective of signing such an agreement would be to prevent Taiwan from being gradually marginalized amid the integration of the East Asian economy. President Ma stated that the 10 ASEAN member nations in 2002 signed a Framework Agreement on Comprehensive Economic Cooperation with mainland China that will take effect in January of next year. At that time, Taiwan's exports of petrochemical products, automobile parts, machinery and textiles to mainland China will face tariffs of 10%-15%, compared with tariff-free access to mainland China's market by ASEAN nations. This will deal a blow to the competitiveness of Taiwan's products and could cause an outflow of industry, further exacerbating Taiwan's unemployment problem, he said. Therefore, the government sees a need to engage in negotiations with mainland China on an ECFA as soon as possible.
President Ma said negotiations leading up to an ECFA are usually quite lengthy. However, Taiwan could adopt the ASEAN model and include an "early harvest" clause in the course of the negotiations, enabling items that face the biggest threats to be included first, while talks on other industries would be put off until a later time. The purpose of this would be to adopt a pragmatic method to generate beneficial results for Taiwan. The president also noted that since the government floated the topic of an ECFA in February, it has sought to familiarize the public with the content and impact of such a pact. President Ma said that according to the latest public opinion polls, over 50% and in some cases more than 60% of the public favors the signing of an ECFA. This demonstrates that the initiative has won the support of the majority of the public, he said.
President Ma stressed that in the course of negotiating an ECFA with mainland China, the government will not discuss Taiwan's future, nor will the issues of independence or unification be broached. This would purely be an economic and trade agreement, with the goal being to normalize cross-strait relations in this regard, the president said. It would also help to bolster Taiwan's economic power, he added. Meanwhile, the president said Taiwan desires to engage in similar agreements with other countries, thereby promoting economic liberalization and normalization.