Discussing the opposition parties’ recent protest over government policies, President Ma Ying-jeou (馬英九) said the national economy had no future unless the government eased the ban on US beef imports containing ractopamine residues.
The government criticized the opposition for its objection to easing the ban by saying Taiwan’s economic future was at stake. This was a case of choosing the lesser of two evils and the nation had no choice but to compromise for the greater good.
Ma would have Taiwanese believe that because South Korea has signed a free-trade agreement (FTA) with the US, Taiwan is doomed unless it signs one too.
Two years ago, he made a similar claim about the Economic Cooperation Framework Agreement (ECFA) during a debate with then-Democratic Progressive Party (DPP) chairperson Tsai Ing-wen (蔡英文).
It is now possible to see the extent to which the failings of the ECFA expose Ma’s flawed strategy and lack of determination.
First, the ECFA has been of limited use in boosting exports. Last year saw an increase of 8 percent in exports to China and only 9 percent growth in export volume for products on the “early harvest” list. Also, Taiwanese exports to China have fallen to 7.2 percent of the goods China imports, the lowest since 1993.
Despite Taiwan having no similar agreements with ASEAN countries, growth in exports to those nations last year was three times higher than the growth in exports to China. In the first five months of this year, exports to China shrank by 10 percent, compared with a 6.2 percent increase to ASEAN countries.
The ECFA has also not had any discernible effect on attracting foreign investment to Taiwan, while Taiwanese money continues to flow out of the country. When the ECFA was signed in 2010, the amount of foreign investment coming into Taiwan contracted by 29 percent, even lower than that going into Thailand, Indonesia and Vietnam. Last year, foreign investment in Taiwan was US$3.4 billion.
In addition, from 2008 to last year Taiwan experienced considerable cash outflows, the average annual amount being US$27.7 billion, with last year the most serious at over US$50 billion.
It was originally said that signing the ECFA might benefit FTA negotiations with Singapore. However, 18 months after talks with Singapore started, there are no tangible results. Moreover, even if we do sign an FTA with Singapore, trade between the two countries represents just 3.6 percent of Taiwan’s total trade, so the effect of such an agreement would be negligible.
Up to now, Taiwan has still not entered into FTA negotiations with its major trading partners: the US, Europe and Japan.
Council for Economic Planning and Development Minister Yiin Chii-ming (尹啟銘) has said that the ECFA was a framework agreement and never intended to have a significant economic impact. That is certainly not how Ma characterized it during a post-signing press conference. He claimed it was a big step in addressing Taiwan’s economic isolation; that it would make the nation a focus for foreign investment and invigorate domestic investment. In reality, the investment rate for this year is forecast to be 16.2 percent, a historical low.
Two years after the ECFA was signed, Taiwan’s situation has deteriorated. Ma and his government are now saying that the nation’s economic isolation will intensify if it fails to relax import restrictions on US beef.
It is true that Taiwan faces an economic crisis, but the government’s policies are flawed, its strategy is ill-founded and it lacks the resolve to grapple with the nation’s problems.
Will the US really be more willing to sign an FTA with Taiwan if the ractopamine ban is relaxed? Washington has never said as much, it has just reiterated that it would be prepared to resume talks on a Trade and Investment Framework Agreement (TIFA). A TIFA would of course be a prerequisite for a US-Taiwan FTA, but the problem is whether Taiwan will ever be in a position to secure a FTA with the US. Given that the public has serious concerns about the health implications of ractopamine, it is important to know whether, if this compromise is made now, there is a reasonable chance of getting an FTA further down the road.
If the US is willing to hold talks with Taiwan over a possible FTA, would the Ma administration be prepared to completely open up the economy? Even if the legislature relaxed the ban, a US-Taiwan FTA will still be a long way off when Ma finishes his second term. It is even possible that negotiations will not yet have started.
Tung Chen-yuan is a professor in the Graduate Institute of Development Studies at National Chengchi University.
Translated by Paul Cooper
We are used to hearing that whenever something happens, it means Taiwan is about to fall to China. Chinese President Xi Jinping (習近平) cannot change the color of his socks without China experts claiming it means an invasion is imminent. So, it is no surprise that what happened in Venezuela over the weekend triggered the knee-jerk reaction of saying that Taiwan is next. That is not an opinion on whether US President Donald Trump was right to remove Venezuelan President Nicolas Maduro the way he did or if it is good for Venezuela and the world. There are other, more qualified
China’s recent aggressive military posture around Taiwan simply reflects the truth that China is a millennium behind, as Kobe City Councilor Norihiro Uehata has commented. While democratic countries work for peace, prosperity and progress, authoritarian countries such as Russia and China only care about territorial expansion, superpower status and world dominance, while their people suffer. Two millennia ago, the ancient Chinese philosopher Mencius (孟子) would have advised Chinese President Xi Jinping (習近平) that “people are the most important, state is lesser, and the ruler is the least important.” In fact, the reverse order is causing the great depression in China right now,
This should be the year in which the democracies, especially those in East Asia, lose their fear of the Chinese Communist Party’s (CCP) “one China principle” plus its nuclear “Cognitive Warfare” coercion strategies, all designed to achieve hegemony without fighting. For 2025, stoking regional and global fear was a major goal for the CCP and its People’s Liberation Army (PLA), following on Mao Zedong’s (毛澤東) Little Red Book admonition, “We must be ruthless to our enemies; we must overpower and annihilate them.” But on Dec. 17, 2025, the Trump Administration demonstrated direct defiance of CCP terror with its record US$11.1 billion arms
The immediate response in Taiwan to the extraction of Venezuelan President Nicolas Maduro by the US over the weekend was to say that it was an example of violence by a major power against a smaller nation and that, as such, it gave Chinese President Xi Jinping (習近平) carte blanche to invade Taiwan. That assessment is vastly oversimplistic and, on more sober reflection, likely incorrect. Generally speaking, there are three basic interpretations from commentators in Taiwan. The first is that the US is no longer interested in what is happening beyond its own backyard, and no longer preoccupied with regions in other
RSS