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Securing Survival: Crafting Economic Agreement with Vigilance

Shin-yuan Lai

Minister of the Mainland Affairs Council

Recently, Ing-wen Tsai, chairperson of the Democratic Progressive Party (DPP), wrote a newspaper opinion piece, stating that if the ROC government signs a CECA with mainland China, this would elicit the marginalization of domestic laborers and an adverse impact on local industries.

Apparently, the opposition party has confused the Comprehensive Economic Cooperation Agreement with the Free Trade Agreement (FTA) which seeks full market openness. The implementation of normalized cross-Strait economic exchanges, regardless of the type of agreement, will not translate to the complete opening up of Taiwan’s market to mainland China.

President Ying-jeou Ma has repeatedly affirmed the policy of prohibiting mainland Chinese laborers and 800-plus types of agricultural products from entering the Taiwan market. The government’s commitment to securing the people’s survival and the country’s sovereignty is unwavering. In fact, the government is more meticulous in scrutinizing mainland Chinese food products than the previous administration. Due to the ROC government’s insistence on its position, mainland China, however reluctant at first to engage in talks regarding a food safety agreement, eventually adjusted its position after having accepted our recommendations. When mainland Chinese representatives came to Taiwan, President Ma and I received the Mainland delegation in our respective capacity as President of the ROC and Minister of the Mainland Affairs Council, which has marked a precedent. As such, the opposition party’s groundless anxiety arose out of false allegations.

Whether it is an FTA, a CEPA, a CECA, or the government’s proposed ECFA, the signatory’s status varies according to the type of each agreement involved and should be not treated as the same. The scope of these agreements and the preference items pending negotiations vary as well. The government will earnestly conduct the item assessment one by one before signing any agreement with mainland China, as this is the basic requirements for engaging in economic diplomacy. Currently, Taiwan-made products are sold not only in the Mainland, but also throughout the world. However, the task of determining which domestically manufactured goods will benefit from such an Economic Cooperation Framework Agreement is a challenging one. As such, formulating the terms and the stipulations of the agreement would be difficult. In accordance with the needs of the industry, the government will proceed in the best interests of the industry. With regard to matters concerning sovereignty, President Ma has clearly articulated his position in his inaugural speech. Securing Taiwan’s survival is the prerequisite for conducting cross-Strait interactions. In the course of normalizing cross-Strait economic and trade relations, the government will not tolerate its sovereignty to be eroded.

Since an economic agreement closely correlates with people’s livelihood, the agreement itself should not be over-simplified as an issue of bipartisanism. Undeniably, the opposition party has manipulated the issue by politically labeling the issue as “China-leaning” or “political clientelism,” which is aimed at criticizing the President through these ambiguous political slogans. As a result, the public has remained deeply divided over this issue. Analogizing the Economic Cooperation Framework Agreement as a miracle pill that allows Taiwan to remain unscathed in the global economic downturn is unrealistic. Likewise, claiming that Taiwan will be “China-leaning” or lose its economic independence upon the signing of such an agreement is too unwarranted. Under the principle of safeguarding Taiwan’s interests, the government is analyzing the pros and cons of the pursuit of an Economic Cooperation Framework Agreement.

Lately, leading members of Taiwan’s petrochemical industry have called for the signing of a CECA. They estimate that the agreement is conducive to generating an output value of NTD $4 trillion. The government will be attentive to the business leaders’ recommendations. From another perspective, the government has taken note that of the 4-trillion output value, 2.3 trillion worth of output are associated with the textile industry, most of which are small- and medium-size enterprises, including towel, furniture, and other traditional industries. Protecting those Taiwan’s industries and the manufacturing sector, as well as Taiwanese jobs against the influx of low-cost products from mainland China will be the government’s responsibility as well. The government has its guidelines in formulating related policies in a gradual and orderly manner, and thus, it would be unfair to level baseless criticisms against the government’s measures prematurely.

The trans-boundary nature of this economic agreement itself is a problem. We hope that mainland China will remove trade barriers and open its market to certain items of Taiwan’s products, and vice versa, while neither is unwilling to give in easily. On the other hand, it is pivotal to construct a profit feedback mechanism to compensate relatively disadvantaged industries. The balance of interests between industries and laborers will also be cautiously calculated by the government. In view of all the heavy burden there is for the government to shoulder, I have recently proposed the principle of developing more preferential economic and trade measures in a prudent and steady manner to ensure both prosperity and sovereignty. The opposition party emphasized the need to carry out a “risk and opportunity” assessment of this topic, which has actually been commenced by the government for a long time. For us, protecting Taiwan’s interests is more than just paying lip service, and the government has already undertaken efforts to this end.

A slightly different version of this article was published on the United Daily News on February 19, 2009.