President Ma Ying-jeou (馬英九) recently held a press conference in Greater Kaohsiung in which he should have focused on reconstruction after the fatal, destructive gas pipeline explosions that occurred in the city on July 31 and Aug. 1, but instead chose to cite a Wall Street Journal editorial on Taiwan to disparage the Democratic Progressive Party.
The piece Ma cited was published on Aug. 5 under the headline “Taiwan Leaves Itself Behind” and he used it to accuse and criticize the Democratic Progressive Party for boycotting the review of the cross-strait service trade agreement in the legislature.
The main thrust of the article is that Taiwan has to ratify the service trade agreement with China, otherwise the nation will only become more isolated.
However, this article totally ignores one basic fact: China is hostile toward Taiwan. Not only does Beijing have 2,000 missiles aimed across the Taiwan Strait, it is also preventing Taipei from participating in the international community and continues to reserve the right to use military force to take Taiwan.
At present, 80 percent of Taiwan’s foreign investment and 40 percent of its exports go to China. The majority of Taiwanese are worried that being so strongly reliant on China will ultimately be hugely detrimental to national security.
Taiwan and China are both members of the WTO. However, Beijing is not only unwilling to treat Taipei as a member of equal standing, it also interferes with Taiwan signing regional cooperation agreements with other countries. This is why former president Lee Teng-hui (李登輝) formulated his “no haste, be patient” policy to restrict investment in China.
However, after Ma came to power in 2008, he eased restrictions on cross-strait trade significantly and inked the Economic Cooperation Framework Agreement (ECFA) with China.
This is why the majority of Taiwanese are against the Ma administration’s pro-China policies, which they feel leave Taiwan overly reliant on the Chinese market. This is also the motivation for the Sunflower movement earlier this year, which saw 500,000 people take to the streets of Taipei to protest an attempt to bulldoze the cross-strait service trade agreement through the legislature.
Unless China promises that it will not stop Taiwan from signing free-trade agreements with other major economic entities such as the US, Japan and the EU now that the ECFA has been signed, ratifying the service trade agreement will only make Taiwan more reliant on China in terms of trade, and place the nation in a very dangerous place in terms of national security.
Taiwan already has a considerably liberal economy, and ranks 17th in the world in terms of trade in imports and exports. According to information from the WTO, in 2001, Taiwan’s import-weighted average tariff rate was just 1.8 percent, which is 2.1 percent lower than that of the US at the time, 2.2 percent lower than Japan’s, 2.7 percent lower than the EU’s, 4.1 percent lower than that of China and 6.8 percent lower than in South Korea.
Despite this, the Taiwanese government should still carry out structural reforms to meet the conditions for joining regional trade pacts such as the under-negotiation Trans-Pacific Partnership, so as to diversify the risk that comes from being overly reliant on the Chinese market.
However, this should not be done with any precondition of signing the cross-strait service trade agreement with China first, and neither should China use this to stop Taiwan from signing free-trade pacts with other countries.