Taiwan Can't Stand Losing ECFA

 Taiwan Can't Stand Losing ECFA

China Times Editorial (Taipei, Taiwan)

October 6, 2019

 Translation of an Excerpt

In responding to interpellations at the Legislative Yuan, Economics Minister Shen Jong-chin admitted the possibility of losing ECFA (the cross-Strait Economic Cooperation Framework Agreement) as a result of deteriorating cross-Strait relations; however, he emphasized that this would only affect about 5% of our export value, “not much in dollar amounts." Shen Jong-chin’s words were spoken lightly, but there are two points worthy of consideration: First, once ECFA is abrogated, the issue of Taiwan’s economic/trade being marginalized would deteriorate even more; the heavy tariff burden on the part of factories would make the growth of exports and GDP feel the brunt. The second point is the cavalier attitude of the Economics Ministry. It tried to end the matter with "the dollar amount not being much", but completely not having thought about the possible impact on employment and people's livelihoods. A light description and glossing over the matter is precisely the consistent attitude of the Tsai government, to which we take strong exception.

ECFA was the most important cross-Strait economic agreement signed during the Ma Ing-jeou administration in 2010; based on the assessment of the Chang-Hwa Institution for Economic Research at that time, ECFA could increase our economic growth rate by 1.65% to 1.72% and hike total employment by about 250,000. After the setback in the WTO Doha rounds of this century, global economic/trade has basically turned toward the path of FTAs and regional economic/trade organizations, tantamount to shifting from global "multilateralism" to bilateralism or "limited multilateralism." Based on these mechanisms, the signatories give the other party or parties lower tariffs and more generous terms of trade; as a result, as far as exports and the economy of the signatories are concerned, they basically benefit. This is also why in the past nearly 20 years, the world has signed over 400 FTAs of various types and formed regional organizations.

Amid this wave of trends, Taiwan has clearly become an international orphan; however, in over three years, the Tsai government has made no progress in resolving the crisis of Taiwan being marginalized in terms of economics and trade or in avoiding becoming an international orphan in the same area, and now even ECFA could also be lost. While other countries continue to move forward on the road of pushing FTAs or regional economic/trade integration, Taiwan’s gap with its competitors has become wider and wider. What is more deplorable is the mentality of government officials saying that "the impact would be only 5%, very little." Taiwan’s exports occupy about 60% in the weight of its holistic GDP; exports are of course the lifeline of the economy. With 5% being affected, do government officials know how many workers and members of the public would be impacted?

In order to win the elections, Tsai Ing-wen obviously wants to play the anti-China card and may even wish that the other side of the Strait would abrogate ECFA in order to gain points in the elections. With regard to whether the Tsai government has the capability and willingness to save ECFA, we do not hold out any hopes; however, we hope that the business community and rational economic voters will understand and see clearly the crisis and risks that the Tsai government would bring to Taiwan’s economy being marginalized, and prudently cast their ballots, making sure that the DPP must be removed from office. We also pin our hope on the Mainland to put special emphasis on long-term cross-Strait relations, not lightly talking about abrogating ECFA.

[Translator’s note: The so-called cross-Strait ECFA is supposedly an umbrella agreement covering a series of agreements for economic cooperation between the two sides of the Strait, including the Merchandise Trade Agreement, the Services Trade Agreement, and the Investment Guarantee Agreement. However, after early harvest lists were concluded and signed, the three main agreements under ECFA have now been stalled owing to the Sunflower Student Movement in 2014. Thus, only the early harvest lists are being enforced now, in which the list for Taiwan is much longer than the list for the Mainland. Therefore, Taiwan enjoys many more benefits than the Mainland under the early harvest list mechanism.

[It is noteworthy that during the great debate between Tsai Ying-wen and Ma Ing-jeou for the 2012 presidential election, Ma strongly defended ECFA while Tsai vehemently opposed it. She even said that if elected, she would introduce a plebiscite proposition to bar further negotiations on ECFA.]

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