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Economist criticizes Siew's proposal

A local economist yesterday criticized a proposal by opposition Chinese Nationalist Party (KMT) vice presidential candidate Vincent Siew (蕭萬長) to develop Taiwan into a free trade zone as "more a loss than a gain," saying that such an opening would harm local manufacturers and workers.

Chen Po-chih (陳博志), chairman of the non-profit research organization Taiwan Thinktank (台灣智庫), made the comment in a speech titled "The Direction and Strategies of International Cooperation" at a conference held by the Industrial Development Bureau on industrial upgrading and transformation.

Chen, who once served as chairman of the Cabinet-level Council for Economic Planning and Development, said no country will be willing to open its doors to Taiwan just because Taiwan opens its own for barrier-free trading.

Under WTO regulations in terms of most-favored nation treatment, any WTO member that opens its market and offers privileged trading treatment to another member is obliged to treat all other members in the same way, unless the opening is part of a mutual free trade agreement (FTA), Chen said.

"Will there be a country willing to open its doors to the whole world only because Taiwan unilaterally opens its own and that country wants to do the same thing for Taiwan?" the economist asked.

Once they get the Taiwan market, the foreign countries will never want to "sacrifice" theirs, which Chen claimed would be the result of a free trade zone. He said that Taiwan's opening its market would put the country in a situation in which foreign economies would take advantage of the Taiwan market, while Taiwan would not have access to theirs.

But Chen said that international cooperation is still a good way for local enterprises to expand their business and profits, and he suggested that the government try to find other kinds of cooperation relations that would pose a lesser threat to local businesses.

He said that signing FTAs with developed countries is the way Taiwan should follow in efforts to boost foreign trade.

Siew, a former premier who also served as minister of economic affairs in the previous KMT administration, proposed idea of the free trade zone in May during a speech to a gathering of influential entrepreneurs.
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