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EDITORIAL: Ma needs
bold, balanced action
Now that President Ma Ying-jeou (°¨^¤E) no longer faces the pressure of getting
re-elected, he can be bolder and more determined in his mandate in his second
term. However, he should take action in a balanced and measured way, as the
major tasks facing him involve not just cross-strait ties with China, but
domestic issues and challenging global conditions.
For instance, over the past four years, Ma and his Chinese Nationalist Party (KMT)
government have been criticized for their lackluster performance in creating
jobs and narrowing the wealth gap. While they have often touted the benefits of
the inking of the Economic Cooperation Framework Agreement (ECFA) with China to
revitalize Taiwan¡¦s economic growth, the fact that the election was so
close-fought shows that only a few people and industries have enjoyed the fruits
of closer cross-strait trade ties.
Thus, while Ma and his KMT are poised to continue and strengthen existing
government policies over the next four years, especially as regards cross-strait
economic measures, they need to strike a balance on how fast and how far they
can go. Most importantly, they have to remind themselves that the benefits of
closer cross-strait trade ties should be directed at more industries and the
majority of the people.
The challenges facing the government on this front are threefold.
First, while the ECFA appears to provide business opportunities to Taiwanese
firms in China thanks to the ¡§early harvest¡¨ list of items enjoying
concessionary tariff treatment, sooner or later the bilateral trade pact will
offer opportunities for Chinese companies to do business in Taiwan. Eventually
it will lead to competition between Taiwanese firms and their Chinese
counterparts, in Taiwan and not just China.
Therefore, as the government has shown its intention to promote greater trade
and investment liberalization across the Taiwan Strait through the ECFA, it must
also carefully negotiate with China over investment protection and
double-taxation to protect the interests of Taiwanese businesses.
Second, when the government is paying attention to benefits for Taiwanese firms
operating in China, it should not neglect small businesses and the economically
disadvantaged in Taiwan. There are clues to why Ma lost votes in certain parts
of Taiwan in the election and he must realize the need to address those voters¡¦
dissatisfaction with the government by improving the domestic business
environment.
As further ECFA discussions with China might involve more tax reductions for the
plastics, fiber, LCD, automobile and machinery industries, they could have both
positive and negative impacts on domestic industries. As an increase in Chinese
investment in Taiwan through the ECFA is very likely to lead to restructuring
and consolidation of local industries, a responsible government needs to take
pre-emptive measures to help local companies upgrade production to improve their
competitiveness.
Third, the government should not forget about global economic conditions, as the
development of an export-oriented Taiwan does not rely solely on China. The
government has said it would step up the pace of signing free-trade pacts with
other countries, as this is an important move to prevent Taiwan from becoming
marginalized in the global economy, but it should proceed cautiously to avoid
unfair treatment of domestic industries during the negotiation process.
Ma said on Sunday he wanted to leave a legacy in Taiwan after his second term.
The opportunity exists, but it depends not just on his determination, but on how
far and how fast he takes action and whether the action is taken in a balanced
way.
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