TAIPEI - Taiwan's economics minister has defended a proposed controversial trade agreement with China, saying it would help raise the island's gross domestic product, it was reported Monday.

In a seminar Sunday, Yiin Chii-ming warned that Taiwan's GDP could drop by 1.0 percentage point following the formation of a single market by members of the Association of Southeast Asian Nations by 2015, the Commercial Times said.

However, the island can get access to the bloc by forging an economic cooperation framework agreement (ECFA) with China, which has inked a free trade deal with ASEAN, Yiin said.

Taiwan's GDP could therefore rise by 1.374 percentage points and petrochemical, machinery and auto components makers are expected to benefit, he said, citing an academic report.

Once Taiwan and China sign the trade pact, prospects for the island to forge free trade agreements with other members of the World Trade Organisation would also increase, Yiin said.

Taiwan's China-friendly Kuomintang (KMT) government is pushing for the planned trade pact with Beijing to encourage a freer flow of goods and personnel across the Taiwan Strait.

But the pro-independence opposition Democratic Progressive Party (DPP) strongly opposes the move, insisting it could spell disaster for Taiwan's economy, which is already in recession, prompting an exodus of local manufacturers.

Yiin said under the trade pact, imports of Chinese goods would be closely watched and relief measures would be set up for local industries that lose out.

The DPP also fears the trade pact would undermined Taiwan's sovereignty, comparing it with the Closer Economic Partnership Arrangement that Beijing signed in 2003 with its special administrative regions of Hong Kong and Macau.

Beijing still regards Taiwan as part of its territory awaiting reunification by force if necessary, although the two sides have been governed separately since the end of a civil war in 1949.

However, ties between Taiwan and China have improved dramatically since the KMT's Ma Ying-jeou became president last May promising to boost cross-strait trade and tourism. --AFP