The local economy’s worst nightmare will be realized if China blocks Taiwan from signing free-trade agreements (FTAs) with other countries even if an economic cooperation framework agreement (ECFA) is inked later this month.
Worries that Taiwan might have to endure this nightmare are not groundless.
In an official overture, China’s Foreign Ministry spokesman Ma Zhaoxu (馬朝旭) told a routine press briefing on Monday in Beijing that China “strongly opposes any official ties in any format that Taiwan might develop [with other countries], although it is not against any unofficial trade ties between Taiwan and China’s diplomatic allies.”
He made the remarks in response to reporters’ questions about whether China would allow Taiwan to nurture FTAs with other countries after an ECFA is signed — a question on which Beijing authorities have long taken an ambiguous stance.
Most Chinese officials shrugged off the question by saying it is too early to say or that the priority is for both governments to accelerate negotiations on an ECFA.
Usually, those indecisive answers often suggest something slightly suspect or something that will come with a price.
But President Ma Ying-jeou’s (馬英九) administration is obviously in a hurry to ink the trade pact and therefore buries its head in the sand whenever this question is raised.
The president and many of his officials, including former chairman of the Council for Economic Planning and Development Tsai Hsun-hsiung (蔡勳雄), appear to prefer wishful thinking and believe that, as Tsai once said, other economies will “mull negotiating investment treaties or Bilateral Immunity Agreements [BIAs] with Taiwan” once China agrees to an ECFA, which is similar to an FTA, with Taiwan.
But the reality is that fears of a Chinese boycott have long been the primary reason behind the reluctance of Asian countries to negotiate BIAs with Taiwan.
Now that the Chinese foreign affairs body has revealed its true colors and made it clear that it would not allow other countries to sign FTAs with Taiwan, that hope is immediately dashed, even if Ma has vowed to personally push for other FTAs.
As many economists have warned, the local economy will suffer more than it benefits from an ECFA with China, especially if other countries continue to fear China’s wrath and refrain from fostering FTAs with Taiwan.
Polaris Research Institute president Liang Kuo-yuan (梁國源) once urged the Ma administration to postpone the inking of an ECFA until China pledges not to block Taiwan from signing FTAs with other countries.
Now is the time for action, not words.
The Ma administration needs to do something concrete instead of making empty promises to reassure the public that the local economy will not be the victim of a political trap that will lead to other economies viewing Taiwan as a part of China and thus refusing to consider FTAs with Taiwan.
This should be set as a precondition for signing an ECFA before it turns into a nightmare.