COMPLEX COMPENSATION:Experts yesterday said the government’s mechanism for trade-pact victims was comprehensive, but failed to be implemented
By Chris Wang / Staff reporter
A mechanism to compensate companies and sectors negatively impacted by the Economic Cooperation Framework Agreement (ECFA) is in place, but identifying and determining who the victims are will be difficult and require a lot of work, participants of a public hearing said yesterday.
The hearing, organized by the Taiwan Solidarity Union (TSU), gathered government officials, academics and representatives from labor and trade groups in the Legislative Yuan to discuss government assistance for corporate and labor victims of the ECFA.
The ECFA, which was signed in June 2010 and took effect in September that year, was lauded by President Ma Ying-jeou’s (馬英九) administration as a catalyst for Taiwan’s regional economic integration.
Like any free-trade agreement, the ECFA has created benefits for certain sectors and companies and harmed others, said TSU Legislator Hsu Chung-hsin (許忠信), who acted as the moderator of the hearing.
The government has allocated a 10-year, NT$95.2 billion (US$3.17 billion) budget to compensate victims from 2010 to 2019, but few companies have applied for the compensation because of its strict criteria, he said.
The three measures the government has devised for aiding ECFA victims — invigorating and assisting suffering sectors, adjusting industrial structure and damage compensation — were “comprehensive and complete,” most academics said.
“The most important thing is how you implements those measures,” said Liu Da-nian (劉大年), a researcher at Chung-hua Institute for Economic Research, adding that all of Taiwan’s compensatory measures would have to be in line with WTO requirements.
Currently, the most glaring problem of the compensatory mechanism is the assessment of the victim sectors and companies, since the present criteria focuses on damages created by an influx of foreign imports.
Taiwan should consider including workers who were laid off because of the massive exodus of local companies to China or Southeast Asian countries in its compensation coverage, National Taiwan University’s Graduate Institute of National Development associate professor Hsin Ping-lung (辛炳隆) said.
Representative from labor groups agreed with Hsin’s recommendation and urged the government to lower the threshold for applying for compensation.
There could be two reasons why the vast majority of small and -medium-sized enterprises (SMEs) are ignoring the measures, said Hung Ching-shu (洪敬舒), director of the Taiwan Labor Front’s Research Center for the Working Poor.
“Either they don’t know about it [compensation] or they have are not aware of the negative impact created by the ECFA,” Hung said, adding that large corporations often respond to changes and challenges faster than SMEs.
Taiwan’s intention to seek FTAs with other major trading partners — Japan, the EU and the US — would likely make compensation even more complex, National Association of Small and Medium Enterprises (中小企業協會) secretary-general Paul Wang (王振保) said.
For example, victims of the ECFA could become beneficiaries of the Taiwan-US Trade and Investment Framework Agreement (TIFA) or other FTAs, Wang said.
The government would have to conduct a complete review of the mechanism and present a comprehensive set of measures to cope with possible economic situations if it succeeds in signing more free-trade pacts with countries and trade blocs, Wang said.