Thu, Dec 23, 2010 - Page 8 News List

DPP must learn to live with ECFA

By Lee Wen-chung 李文忠

The result of the special municipality elections was quite surprising. The Chinese Nationalist Party (KMT) held steady, but looking at the overall vote result, the Democratic Progressive Party (DPP) can counterbalance the KMT and it has nothing to be downcast about. If the DPP is capable of earnestly and seriously discussing the factors behind its wins and losses, it will be able to do better in future.

The structure of the electorate and sudden pre-election events aside, we must admit that government support has stopped dropping following the signing of the Economic Cooperation Framework Agreement (ECFA). It is conceivable that the opposition’s reaction to and handling of the ECFA is the key reason why the government has been able to pull itself back from the edge, when its approval ratings were hovering between 20 percent and 30 percent.

Ever since President Ma Ying-jeou (馬英九) took office, the public has questioned his governing abilities, so the ECFA has been crucial because it shows that he has actually done something. However, since the ECFA is bit like a herbal tonic, it has side effects that will lead to residual defects if not accompanied by the right complimentary medication.

The KMT sees the agreement as the main prescription for reviving the economy, and maybe even a panacea, which explains why it seems to be ignoring the fact that implementation of the ECFA is sure to speed up structural unemployment, falling salaries and dependence upon China. It also ignored the fact that the agreement falls in line nicely with Beijing’s political and economic strategy toward Taiwan and allows Beijing the possibility of raising the stakes. Instead, the government handed Beijing a huge gift by conceding that there was “one China, with no need for either side to define its interpretation,” because at least that avoids Beijing expressly articulating its own interpretation.

This is just ridiculous. However, the pan-green camp has been vehemently opposed to the whole ECFA idea and that hasn’t been very helpful either.

When dealing with cross-strait trade it is important to strike the right balance between economic development, social justice — income distribution and employment — and autonomy, of both the political and economic kind. Of course, the DPP will tend to place more emphasis on the latter two, but they should bear in mind that, as an island economy, Taiwan is heavily reliant on trade with other countries. As such, they simply must take on board the various demands of industry and commerce.

The DPP’s approach should be based on three considerations. First, that China is Taiwan’s biggest trading partner, but current cross-strait trade norms and regulations do not adequately reflect this.

Second, the majority of companies in Taiwan fall into the small and medium-sized enterprises category, and have limited research and development (R&D) resources: They are obliged to look to other sources of innovation, send people overseas and learn from the skills and processes they return with, or to actively seek such skills and techniques from abroad.

Third, Taiwanese businesspeople are well placed, both compared with the Chinese in terms of both technology and awareness, and compared with other investors in the China market because of the lack of either a language or cultural barrier. We can’t afford not to look at things from their perspective.

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