Sat, Feb 04, 2006 - Page 8 News List

Take steps to avoid marginalization

By Tung Chen-yuan 童振源

Over the past few years, East-Asian nations have signed many trade agreements and quickened the pace of economic integration. The exclusion of Taiwan from this process is a cause for concern.

Some people believe that Taiwan should implement cross-strait direct transport links and sign a free-trade agreement (FTA) with China as soon as possible, believing that this will avert the danger of Taiwan becoming marginalized. But will taking this approach preserve Taiwan's freedom to sign FTAs with other nations without being thwarted by China? Conversely, if Taiwan pushes for FTAs with its trading partners and diplomatic allies but ignores China, will this prevent Taiwan from being marginalized? Or is Taiwan, once numbered among the four Asian tigers, destined to be sidelined?

The situation Taiwan faces is not desperate. As long as it adopts appropriate response strategies, it will have the ability to turn a crisis into an opportunity. The development of East Asian free-trade arrangements and the increasing economic cooperation facilitates the liberalization of global commerce and investment, and this is an opportunity for Taiwan.

Because of Taiwan's insufficient natural resources and limited market, it must rely on the integration of global resources and the development of global markets to ensure the nation's sustainable economic development. Therefore, the advancement of East Asian economic integration and cooperation serves as a perfect chance for Taiwan to improve its economic performance.

Taiwan, of course, hopes to play a leading role in the integration rather than merely being a spectator. The biggest obstacle to this comes from China's political obstruction. This is an international reality that Taiwan must face, and it must develop its East Asian integration strategies in this context. This strategy involves an advance along three fronts to achieve the objective of becoming a participant in global trade liberalization and the Asia-Pacific economic system.

Strategically, Taiwan should be more active in promoting the liberalization of the global trading and investment environment. Only in this way can Taiwan free itself from geopolitical constraints and overcome China's obstructionism. Taiwan should be an initiator of globalization and a catalyst in building an Asia-Pacific free-trade system. It should make the most of the global market and global resources, rather than passively waiting for others to approach with FTA offers.

Taiwan should also make every effort to promote its presence in the multilateral free-trade system, including through the WTO, APEC and other organizations. In addition, it should actively propose and promote liberalization measures. This will bring Taiwan much greater benefit than would regional economic integration.

To bring about a breakthrough in bilateral economic and trade relations, Taiwan must be pragmatic and push for FTAs with major trading partners and diplomatic allies, including its four major trade partners: China, Japan, the US and Hong Kong. This is what will most benefit Taiwan economically.

The US should be Taiwan's primary target for signing a FTA. The US is Taiwan's third-largest trade partner, and an FTA with the US would serve as a political example, making other countries more willing to follow. It would also undermine the legitimacy of China's obstructionism.

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