Tue, Jun 29, 2010 - Page 8 News List

ECFA deal more like addictive narcotic

By Allen Houng 洪裕宏

Recent media reports on the planned economic cooperation framework agreement (ECFA) between Taiwan and China have focused on the “early harvest” list. Machine tools mentioned by President Ma Ying-jeou (馬英九) in an ECFA debate, as well as the petrochemical and automobile sectors, seem to have become an index of success or failure, but this has taken us off on a tangent.

China’s intention in allowing Taiwanese to profit more from the “early harvest” list is clear. Granting economic concessions makes perfect political sense on Beijing’s part. The signing of an ECFA, then, is advantageous to Taiwan for the time being, as the nation is likely to benefit from it over the next two or three years. However, the short-term benefits may be blinding us to the long-term drawbacks. If we merely focus on the list or short-term economic gains, we are leaving ourselves open to the machinations of Ma and Chinese President Hu Jintao (胡錦濤).

From an economic perspective, China’s ploy is to undermine the industries where Taiwan retains an advantage. The generosity shown to the weaker industries is an attempt to buy off Taiwan’s middle and working classes: It is essentially the so-called “united front” at work, through the economy. Furthermore, it is not extended to the industries where Taiwan is strong.

Hu knows that he cannot let Taiwan develop its economy independent of China and that he needs to make it difficult for our competitive sectors to survive in Taiwan in order to force them to relocate to China. Yes, the list does incorporate some of these sectors, but as the saying goes, the devil is in the details.

The Chinese government will inevitably employ all the means at its disposal to prevent the sectors from benefiting from the list, forcing them to move to China. As a result, Taiwan’s industries will become a part of China’s production chain in terms of labor distribution and will be stuck in a state of economic dependence on China.

On Tuesday last week, Japanese strategist Kenichi Ohmae, during a speech at the Presidential Office, likened the planned ECFA to a vitamin for Taiwan’s economy. But what kind of vitamin is this that is going to make Taiwan economically addicted to China?

Taiwan’s situation is somewhat different from that of Japan and South Korea, which have their own “industry clusters” responsible for medium and high-technology research and development. Both of these countries are able to make use of the Chinese market if they sign a free-trade agreement with China. Taiwan’s leading sectors, however, may not be around in less than 10 years’ time. Is this really a vitamin? If anything, it seems more like a harmful narcotic.

What is worse, an ECFA is quite similar to the Closer Economic Partnership Arrangement Hong Kong and China signed.

In the next few years, salaries are likely to decline and the income gap widen in Taiwan. Ohmae himself wrote a book about the so-called “M-shaped society” in 2006. We can see this happening in Taiwan today, as the number of people under the poverty line is increasing and social problems are on the rise. Are these the “benefits” that we can look forward from an ECFA?

Nobody opposes economic development and international trade. What the public opposes is the Ma administration’s opaque political agenda. In light of the government’s rash behavior, we should take to the streets if Ma continues to block a referendum on the issue.

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