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ECFA will sell out the workers and
middle class
By Hong Chi-chang ¬x©_©÷
Wednesday, Feb 10, 2010, Page 8
Speaking in a recent interview about the proposed economic cooperation framework
agreement (ECFA) with China, President Ma Ying-jeou (°¨^¤E) said that if it were
discovered in tariff discussions that reductions to certain types of products
would not be beneficial to Taiwan, these tariffs would not be lowered. Such a
move would be a serious breach of the WTO¡¦s principle of universality.
In any type of negotiation, one always has to make sacrifices to make gains. It
is naive and presumptuous to be unwilling to give in to the other party while
expecting the same party to hand out benefits.
If the other party were to accept such an outcome, it would go against common
sense on international trade negotiations and imply that there were other
objectives beyond the scope of economic issues.
Cross-strait relations are supposedly ¡§special¡¨ and ¡§different¡¨ and the result
of a unique international political environment. Proponents of closer ties say
that economic interests exist between industries on both sides of the Taiwan
Strait, while China and Taiwan share a common history and culture.
However, the Ma administration has ignored the fact that most Taiwanese want to
maintain the ¡§status quo.¡¨ This is why an ECFA looks rosy but naive on paper,
while in reality poses a danger to Taiwan.
The ECFA Ma wants contradicts the principle of comparative advantage that is
supposed to result from free trade and it will nullify its assumed benefits.
When put into a political context, Ma¡¦s extra-economic motivations become
instantly obvious.
Some industries that lost their competitiveness long ago or are in desperate
need of public resources to survive may do so once this distorted economic
framework is promulgated. However, these industries will be no different than
those Taiwanese industries that are currently being kept alive by Chinese money.
This is a bit like the belief that a frog placed in a pot of water that is
gradually heated would not realize the danger and can be boiled alive.
Most wage earners and the middle class will not know what to do, and they will
be destined to drift along with whatever happens.
The prediction by former Council for Economic Planning and Development chairman
Chen Po-chih (³¯³Õ§Ó) ¡X that factor price equalization will occur as a result of
cross-strait trade ¡X will come true.
Another problem with an ECFA is that the interests of corporations will take
precedence over democratic principles and drown out the voices of the middle
class.
Only a limited number of corporations would gain anything. Industries with
special interests will go to every length to influence policy, while the general
public and small and medium enterprises will be ignored.
The lightning speed with which the government passed the memorandum of
understanding with Beijing gives us a glimpse of what will happen in future.
These companies will form interest groups to put pressure on the government and
demand subsidies or pay allegiance to Beijing to win their support. By doing so,
they will direct the development of cross-strait trade.
Once this happens, Taiwan will slowly sink into China¡¦s trap of taking Taiwan by
economic means. The middle class and wage earners that do not belong to any
interest group will lose out. They will be mere bargaining chips and will become
the ¡§new poor¡¨ in the process.
Hong Chi-chang is former chairman of the Straits Exchange
Foundation and a former Democratic Progressive Party legislator.
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