The planned economic cooperation framework agreement (ECFA) may be scheduled to be signed this month, but a clear domestic consensus on the issue remains elusive.
In various public opinion polls, approval of an ECFA remains below 50 percent, while opposition to it hovers at about 35 percent. The number of respondents in favor of putting the agreement to a referendum remains between 60 percent and 80 percent. It is thus clear that the planned ECFA is a highly controversial policy.
The Ministry of Economic Affairs, however, opposes a referendum, saying that, “of 276 FTAs [free-trade agreements] that have taken effect, not one has been put to a referendum.” This is a serious distortion of the facts and it will only serve to further intensify social division.
FTAs registered at the WTO are formally called regional trade agreements (RTA) and they include agreements liberalizing trade in products and services. Nominally speaking, RTAs include FTAs, customs unions, economic communities, economic alliances, preferential trade agreements and so on. In addition, RTAs cover an increasingly wider scope by far exceeding the scope of traditional FTAs.
The purpose and effect of RTAs not only involve economic efficiency or growth, they also affect the distribution of economic benefits and strategic concerns. The Doha Round of WTO talks ran aground because of the protective industrial interests of different countries.
The effects of such an agreement could be of a very political nature. Last year, Taiwan’s national security bureaucrats said an ECFA was the first of three main elements in cross-strait political talks. That raises the question of whether or not political talks will be the next step in cross-strait relations.
Looking at the history of European integration, 19 of the 27 member states have made referendums part of the domestic approval process for participation in European economic integration FTAs.
Here are a few examples: Norway has held two referendums — in 1972 and in 1994 — rejecting first the European Economic Community (EEC) and then the EU. The UK held a referendum in 1975 that resulted in the UK joining the EEC. Ireland has held four referendums on whether or not to participate in European economic integration, in 1972, 1987, 1992 and 2008 and the list goes on.
Outside of Europe, Costa Rica held a referendum in October 2007, to decide whether or not to join the Central America FTA proposed by the US.
In mid-April, President Ma Ying-jeou (馬英九), Premier Wu Den-yih (吳敦義) and Chinese Nationalist Party (KMT) Secretary-General King Pu-tsung (金溥聰) said they were not opposed to holding a referendum on an ECFA, but they have now instructed the Mainland Affairs Council and the ministry to oppose such a referendum at the Referendum Review Committee.
The government’s contradictory behavior is likely to further aggravate tensions between the government and those who oppose the pact. As we’re facing a situation where the planned ECFA is about to be signed and the risk that this may set off violent clashes and social instability, the committee should not only look to the text of the proposed referendum, it should also stress that a referendum is the only way to resolve the dispute between the government and the opposition and build a consensus. Furthermore, this it is the solution that represents the lowest cost to society.