Wed, Nov 15, 2017 - Page 8 News List

Put national interests first in trade

By Eric Chiou 邱奕宏

Last is the myth that what is good for private enterprises is good for the nation. The interests of private enterprises are hardly the same as national interests. General Motors or Wall Street are unlikely to see eye to eye with Washington, unless Washington’s policy benefits them.

Nevertheless, since national interests are always larger, broader and more important than private interests, what is good for the US is likely to be good for US industries or Wall Street as a whole, but not the other way around.

Vladimir Lenin once said that capitalists would even sell a rope to hang themselves for profit. Any prudent national leader should never bet their economic future on the rope of capitalists.

Looking at China’s remarkable economic success, one should bear in mind that China’s economic miracle was not built on a free market, nor can it be attributed to its people’s unrivaled diligence.

Beijing’s nationalist economic policy played a critical role in this success, with US indulgence and its false belief in converting China to capitalism also making a significant contribution.

Ironically, China has transformed itself into a new gigantic beast of “national capitalism,” which is even more powerful, efficient and uncontainable than Western liberal capitalism.

What can Taiwan learn from the US without making the same mistakes?

First, Taiwan should remember that national interests should always be the priority. It is great if the majority of business interests overlap with national interests. If they do not, national interests should never be compromised or exchanged for short-term corporate self interests.

Second, manufacturing jobs are crucial, because they can create sufficient employment and enhance industrial capabilities. The limitations and drawbacks of the outsourcing model has been exposed in many countries, and Taiwan does not have the luxury of repeating the same mistakes the US has made.

Third, high-tech and innovative industries are important, but other sectors should be taken care of as well.

A fairly comprehensive and balanced approach to strengthen Taiwan’s industrial development and upgrading is critical, since it can lessen social instability due to an inflated income disparity among people in different sectors.

Finally, one should be aware that the so-called dream of a free-trade world does not exist in our time. The global market is all about fierce competition between states and corporations.

For the sake of its national interests, every nation needs to adopt certain protectionist policies to various extents.

Trump’s blunt remarks might have just unveiled this inconvenient truth, and a small nation such as Taiwan should adjust its policy accordingly and set sail in the direction of the upcoming phase of new global competition.

Eric Chiou is an assistant professor at National Chiao Tung University.

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