20100702 ECFA is a betrayal of Taiwan’s economy

ECFA is a betrayal of Taiwan’s economy

By Hwang Kun-hu 黃崑虎
Friday, Jul 02, 2010, Page 8

After months of negotiations and much dispute in Taiwan, the Economic Cooperation Framework Agreement (ECFA) was finally signed on June 29. Both the Taiwanese and Chinese governments were visibly delighted at this outcome. Both hailed the agreement as bringing great benefits to Taiwan, saying it would prove a much needed shot in the arm for the economy.

The Taiwanese government was doubly pleased to have secured the “early harvest” list, which offers immediate tariff concessions or exemptions for 539 Taiwanese items exported to China and 267 Chinese items imported here. Unfortunately, those promoting the deal do not seem to have noticed that signing the agreement represents a betrayal of Taiwan’s economy.

According to Straits Exchange Foundation (SEF) Chairman Chiang Pin-kung (江丙坤), the effect of the deal will not really become apparent for another six months, during which time a lot still needs to be cleared up through ongoing negotiations. These talks, he added, are sure to stir up a lot more disputes on both sides of the Taiwan Strait. Chiang pointedly said that not only was the ECFA signing obviously not going to solve every single problem, it was actually more likely to focus attention on even bigger and more intractable problems in cross-strait relations.

If this is true, and many serious issues have yet to be addressed, why was the government in such a rush to get the ECFA signed? Haven’t they just set themselves up for more headaches down the road by inking the agreement now when so many questions still need to be dealt with?

Renowned Japanese business strategist Kenichi Ohmae claimed in a recent lecture given at the Presidential Office that signing the ECFA was a smart thing to do and called the agreement an “elaborately designed vitamin” that could help stimulate Taiwan’s economy. He said that Taiwan should press on and not stop at the ECFA. It should rather use the agreement as a ­stepping-stone and look to sign a free-trade agreement (FTA) with China at some point in the not too distant future.

However, Ohmae ignored the fact that any one kind of vitamin is not going to be suitable for everyone. Moreover, why was it so imperative that an ECFA be signed before an FTA?

Taiwan is legally able to sign an FTA with any country it wants under the framework of the WTO. Unfortunately that is only true if China is not determined to prevent it from doing so.

Everyone is aware that the government is likely to press on with its pro-China policies. Its intentions are quite transparent — eventual unification with China.

Even though both the Chinese Nationalist Party (KMT) and the Chinese Communist Party continue to wax lyrical about the economic advantages of the ECFA, they say it is much better than any international agreement and will bring unlimited benefits to both sides of the Taiwan Strait. Do they really expect us to take this argument at face value without any corroborating evidence?

There is another fact the Taiwanese public needs to understand, namely that the ECFA is nothing like an international agreement. It is in effect bait dangled by China in front of the KMT. I strongly urge everyone to take a long, hard look at the ECFA and consider whether it really is all it’s cracked up to be and what it will actually mean for their own livelihoods and the next generation.

Hwang Kun-hu is ­president fo the Taiwan Friends Association.