Thu, Aug 06, 2009 - Page 8 News List


It would actually be very scary if the Democratic Progressive Party (DPP) really did believe their protectionist propaganda, as most economists these days know that protectionism isn’t the way to go.

Protectionism is generally considered the main reason why there was an economic depression in the 1930s.

Indeed, it is not the KMT that is lying here: The claim from the KMT is that China is actively negotiating free trade deals with other Asian countries while Taiwan is unable to sign any trade deals because Asian countries don’t want to risk their trade status with China.

This is all true: By signing the ECFA with China, Taiwan would be free to negotiate trade deals with other Asian countries without the risk of offending Beijing. The alternative would be for Taiwan to end up as an isolated country like Cuba or North Korea. Is that really what people in the DPP want?

Protectionism is based on an out-of-date, disproved economic theory. The basic assumption is that each side in a negotiation has its own interests and that one side in a negotiation must win at the expense of the other.

This flies in the face of 59 years of modern economic theory and ignores the fact that the two sides may have mutual interests that could form the basis of an agreement.

The reality of the situation is that free trade deals are designed to be win-win situations.

The members of the DPP should be ashamed of themselves for lying to the people of Taiwan for the sake of political gain.

Then again, they are only doing what politicians all over the world do. I can understand this mentality, but I do not condone it.



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