Exec Yuan chief pledges no lower tariffs on existing mainland agricultural products after signing the pact

"Premier" Wu Den-yih said Wednesday that the opposition Democratic Progressive Party's (DPP's) arguments against the proposed trade pact with the mainland are flawed, because the government does not intend to open markets to more mainland agricultural products nor to allow imports of labor from the mainland.

In addition, he said, the government will not lower tariffs on existing mainland agricultural products after signing the economic cooperation framework agreement (ECFA). Wu made the comments during a television interview.

Wu said that "early harvest" lists drawn up by the two sides for priority tariff treatment or access will not necessarily include 500 or 600 items at one time, but urgent and necessary items would be prioritized.

The government will not accept an "early harvest" list that would have an adverse impact on Taiwan, he added.

Wu said that, while the DPP continually argues that signing an ECFA with the mainland will open the door to a flood of agricultural products, it was the administration of former "President" Chen Shui-bian of the DPP that opened imports of 936 mainland agricultural products.

Wu added that many businesses in the US, Europe and Japan hope the ECFA can be signed as soon as possible, with the affect of lowering Taiwan's tariffs.

Regarding another hot topic, Wu said that the DPP's advocacy of a 17.5 percent corporate income tax rate is merely following one of the options the administration has been considering.

He said that when the Executive Yuan considers an industrial innovation bill - which it considers essential to encouraging innovation and investment in Taiwan - to replace the Statute for Upgrading Industry that expired at the end of 2009, it has several options, including cutting the corporate income tax to 17 percent or 18 percent.

The DPP picked up only one of the options under consideration, and the party has "no solid basis" for its advocacy, according to Wu.

The ruling Kuomintang (KMT) legislative caucus decided earlier this week to lower corporate income tax from 20 percent to 17 percent, granting innovation incentives of NT$10 billion, and providing small- and medium-sized enterprises (SMEs) with government subsidies for additional workers they hire.

The DPP, meanwhile, supports a 17.5 percent corporate income tax, and is strongly opposed to the government subsidy measure, on the grounds that it goes against what the party calls the "innovation spirit."

The two parties face a possible showdown Friday, as the legislature might decide to hold a series of votes on the controversial provisions of the innovation bill.

China Daily/CNA

(HK Edition 04/15/2010 page3)