Study On The ECFA’s Influence On East Asian Trade In Goods

With the rapid development of economy, the scale of Chinese mainland market expands rapidly, which is already the world’s largest trading nation and second largest economy. So its influence on East Asian economies is also rising. For Taiwan, Japan and South Korea, Chinese mainland is now the largest export trade partner, and ASEAN countries such as Singapore, Malaysia, Thailand are main trading partners. The signature of the ECFA stimulates closer economic cooperation between Taiwan and Chinese mainland, ECFA’s early harvest program enhanced the competitiveness of Taiwan’s goods in Chinese mainland, which is the pressure for other economies in East Asia, while also accelerates to further strengthen cooperation with China to deepen economic integration, promoting the development of East Asian economic integration.This paper mainly analyzes the impact of ECFA’s early harvest program on goods export competitiveness of major economies in East Asia (Taiwan, Japan, South Korea, Singapore, Malaysia and Thailand) to Chinese mainland. Short-term effects are:for Taiwan, the comparative advantage of upstream petrochemical products such as propylene and heavy oil products decrease, while representative of downstream petrochemical products such as PX and plastic products increase. Singapore and South Korea have competitive downstream petrochemical products as Taiwan, suffering negative effects. Japan’s export to China, mainly in the field of machinery, is not subject to the effect obviously. Thailand and Malaysia are not sensitive to the effects of the early harvest program. Based on long-term effects, long-term equilibrium value change relative to the current value is not obvious, indicating that comparative advantages of related products of the early harvest program are already in the current new equilibrium level. A comprehensive analysis shows that South Korea and Singapore are subject to a higher negative effects, especially for South Korea; Japan, mainly focusing on technology-intensive mechanical products which have technical barriers, doesn’t sustain a obvious effect. Malaysia and Thailand are also not sensitive to effects of ECFA early harvest program.Finally, the paper describes the status of Chinese mainland in the process of economic integration in East Asia,and gives some suggestions about ECFA follow-opening steps and the strategy to lead the East Asian economic integration.