Sun, Jun 12, 2005 - Page 8 News List

Beijing's attempted fruit attack won't work

By Woo Rhung-jieh 吳榮杰

Taiwan and China are both member nations of the WTO. Although the WTO encourages its members to actively promote free trade of agricultural produce, due to the unique cross-strait political situation, trade between Taiwan and China is not completely bound by the constraints of WTO regulations.

After the bout of "China fever" triggered by Chinese Nationalist Party (KMT) Chairman Lien Chan's (連戰) and People First Party (PFP) Chairman James Soong's (宋楚瑜) China visits, Beijing showed some "goodwill" toward Taiwan by approving the import of up to 18 types of Taiwanese fruits, 15 of which may be exempt from tariffs (but not the 15 percent of commodity tax), and pledged billions of NT dollars for purchasing Taiwan's agricultural products. In order to safeguard the long-term interests of Taiwanese farmers, Taiwan has demanded government-to-government negotiations under the WTO structure, but China seems to show no interest of such a request. Instead, it advocates engaging in a dialogue with Taiwan's non-governmental organizations.

In fact, China was originally one of Taiwan's target markets for agricultural exports. Despite China's disparity in wealth and income, its coastal cities have many high income people, including Taiwanese businesspeople.

There are many benefits to be had from exporting Taiwan's agricultural produce to China in a planned way, for this will help relieve the negative pressure on Taiwanese farmers brought by the deregulation of trade in agricultural produce.

But the preconditions of establishing trade relations with China are the absence of political interference, respecting the WTO regulations and the free operation of the market under a "normal" situation. Only in this way could we prevent the possibility of suffering a big loss for a little gain, and only by doing this can we refrain from being confronted with a predicament nobody wants.

In a country where the income of farmers and the prices of agricultural produce are low, it is inconceivable why the government should so "generously" proclaim the import of higher-priced agricultural produce without first solving its domestic agricultural problems. If China's promise of preferential treatment is just a propaganda ploy, we would not be surprised. What concerns people is that Beijing may have some dirty trick up its sleeve. If China enters a business for political reasons, it could pull out for the same reasons. It will be worse if China has malevolent intentions.

The prospect of short-term benefits may cause domestic farmers to increase production to meet the demands of an illusory market, disrupting Taiwan's agricultural export development plan. After some businesspeople are drawn by the bait, China can go back on its promise on various pretexts, to achieve political ends. Unable to halt or redirect production when the market is no longer able to absorb production, large investments of money and effort will find no outlet. As a result, the price of Taiwan's agricultural produce for exports will fall sharply, and at the end, farmers will suffer severe losses. Who will be there to listen to the complaints of the farmers? Who will shoulder responsibility for farmers' losses and the consequent social unrest?

Speaking of national defense in particular, if China uses its preferential tariff treatment to cajole Taiwan into reciprocally opening imports of China's agricultural produce, China could flood Taiwan with its agricultural produce, which is cheap, but of questionable quality. The victims will not be limited to disadvantaged farmers and the agricultural sector.

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