Wed, Jul 26, 2006 page8

• The truth about a US-Taiwan FTA

  • By Charles Snyder
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  Point number one is the US will never give Taiwan a Free Trade Agreement (FTA). Point number two is, if you ever had a doubt about point number one, that would have been put to rest by the testimony of deputy US Trade Representative Karan Bhatia before a congressional committee last Thursday.

  In essence, Bhatia, who was stating the US administration's position on a Taiwan FTA, demanded that Taiwan enter into a neo-colonial relationship with the US, with Washington as master, before the possibility of an FTA could even be entertained.

  His testimony evoked the specter of the Dutch East Asia Company, of the Taipans of colonial Hong Kong, and the Opium War, when the appetites of greedy business interests were held supreme irrespective of the well-being of the people of East Asia.

  Basically, Bhatia said, from Washington's perspective, the best thing Taiwan can do economically is to make Taipei a good place for US international corporations to set up their regional operations.

  The only way Taiwan can do that, he said, is to establish direct links with China, including direct air routes to reduce flying time and hassle for regional US executives and their commercial cargo.

  "The long and the short of it," Bhatia told a hearing of the House International Relations Committee on East Asia FTAs on Thursday, "is that this is an increasingly integrated region, and if Taiwan is going to undertake policies that make it less attractive to US companies for regional hubs, those are considerations that need to be taken into account."

  Afterwards, pressed by news reporters, Bhatia said, "Given the important role that China plays in the Asian economy, and given the integration of the East Asia economy, it is important that Taiwan not be economically isolated from developments in the rest of East Asia."

  Fair enough. But what was Bhatia's solution? Not the fact that China has been doing everything it can in recent years to isolate Taiwan economically and politically in the region. Not that China has refused to take actions that would improve Taiwan-China economic relations.

  The solution? More direct passenger flights between Taiwan and US cities and more direct commercial shipments across the Taiwan Strait.

  "Those are some of the issues that our businesses will tell you affect their sense of the desirability of Taiwan as a place to locate vis-a-vis the rest of Asia," Bhatia added.

  In effect, what he was saying is that the nation should tailor its foreign policy, and specifically its cross-strait policy, in a way to only satisfy the comfort and wishes of American corporate titans, rather than for the best interest of Taiwan and the Taiwanese themselves.

  This is the same Karan Bhatia whose May visit to Taipei was hailed as a great advance in US-Taiwan economic relations.

  One of the striking things about the testimony is that Bhatia never addressed the issue of an FTA at all. Even if the neo-colonial wishes of his administration and business lobbyists were satisfied, he said afterwards, that would not mean an FTA with Taiwan.

  "No," he said when asked by a reporter about the FTA-regional hub link.

  He did allow, however, that countries wanting an FTA with Washington "often seek to cultivate support within the business community."

  So that is it. As Washington has descended into a pit of corruption by an unsavory web of money between Congressmen and lobbyists, so, the official US trade establishment seems to be saying, Taiwan needs to cater to US business' whims if it ever hopes to be treated fairly by Washington.

  Not that short air trips are not desirable. Nobody would rather spend five to eight hours in an airplane when they can take the same trip in under two hours. But the point is that such decisions must be made by Taiwanese officials on the basis of what's good for Taiwanese -- not what's good for some executive in a Delaware corporation.

  While one House committee member, Tom Tancredo, one of Taiwan's most fervent friends in Congress, tried to press Bhatia on the FTA issue, most of the members were absent, so Bhatia got away scot free with his neo-colonialist proposition.

  That might even raise questions about the sincerity of Taiwan's so-called friends in Congress.

  It has been clear for some time why Taiwan will never get a FTA. First, China absolutely opposes it, and the George W. Bush administration would not do such a thing to alienate Beijing. Second, the US law that enables such agreements, known as "fast-track" trade negotiating authority, expires next summer, and an FTA would take too long to negotiate. And, third, there is no interest among US businesses for a Taiwan FTA.

  Former Deputy USTR Charles Freeman was most honest about the third factor, which likely holds the key to the issue. He publicly stated that the USTR does only what US businesses want it to. If there is no groundswell among US firms for an FTA, then USTR will not promote it, he openly admitted.

  That is honest. To try to justify a do-nothing approach with a Taipanesque demand for preferential treatment is not, especially in the 21st century.

  Unfortunately, there is little evidence that an FTA would yield great rewards for either US or Taiwan businesses or their economies. Which is the fourth reason that Taiwan will never or at least not in our lifetimes get a US FTA.

  Let's be open about it. There's no need to be imperialistically condescending.

  Charles Snyder is the Washington correspondent for Taipei Times.
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