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EDITORIAL: Taiwan
trapped by free-trade moves
China, South Korea and Japan have made a joint declaration of their intention to
begin trilateral free-trade talks later this year. This is a major milestone in
trade relations between the Northeast Asian economic superpowers. These three
nations are crucial to Taiwan¡¦s own economic development and the impact on
Taiwan of a regional free-trade agreement (FTA) between them would far outstrip
that of the ASEAN free-trade area, to which Taiwan is also external.
Taiwan relies on foreign trade and needs to remain competitive in all areas, be
it sourcing raw materials, manufacturing orders or sales. Globalization means
that regional trade cooperation is increasingly important and yet at every turn,
Taiwan is turned away by nations fearing intimidation by China. The only
international trade organization Taiwan is actually able to participate in, the
WTO, does give Taiwan certain privileges and guarantees, but as regional trade
integration becomes more important, Taiwan is in danger of being marginalized.
How to open up new markets and remove impediments to trade are part of a
government¡¦s responsibilities. President Ma Ying-jeou (°¨^¤E) is aware of the
danger to Taiwan¡¦s long-term economic development posed by an FTA between China,
South Korea and Japan. To avoid Taiwan¡¦s further marginalization, he instructed
the Cabinet yesterday to speed up trade negotiations with other countries and to
pursue regional economic integration.
Being aware of a problem, however, is not the same as being able to solve it.
The government signed the Economic Cooperation Framework Agreement (ECFA) with
China in June 2010 in the hope of using it as a way to access international
markets. In fact, it tried to persuade the public that it was a good idea by
saying the ECFA would remove obstacles to signing FTAs with other countries and
even allowing Taiwan to join ASEAN Plus Three. Since then, however, the only
agreement Taipei has signed was an investment agreement with Japan in September
last year. There are ongoing economic cooperation talks with Singapore and New
Zealand, but so far no agreement is in sight. Once again, Ma has failed to
deliver.
Meanwhile, Taiwan and the US have not conducted negotiations on economic issues
under the bilateral Trade and Investment Framework Agreement (TIFA) in five
years due to a prolonged dispute over US beef imports. Neither are the two sides
likely to resume talks in the foreseeable future, given the mess the government
seems to be making of the issue. Last year, US President Barack Obama endorsed
the Trans-Pacific Partnership (TPP), a major regional economic regime that
Taipei originally desired to be a part of, and which would have finally broken
the stranglehold China has on Taiwan. Ma managed to throw cold water on this,
however, by saying that joining the TPP was one of the goals of his ¡§golden
decade,¡¨ something he wanted to see in the next 10 years. Since then, the idea
has been placed on the back burner.
The Chinese Nationalist Party (KMT) and Democratic Progressive Party (DPP) are
approaching the problem from two completely different directions and with
completely different methodologies. The KMT wants to gain access to
international markets through China and the DPP wants to gain access to China
through international markets. Considering it has proven a challenge even to
sign an investment agreement since the inking of the ECFA, let alone signing
FTAs with other countries, it is difficult to see how the KMT envisages Taiwan
getting into ASEAN Plus Three or the proposed FTA between China, South Korea and
Japan. Ma is hoping his second term will establish his historical legacy.
Hopefully he does not make a mess of it and go down in history as the man who
botched Taiwan¡¦s future.
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