CECA comes with big hidden costs

By Tsai Ing-Wen 蔡英文  / 

Sun, Mar 01, 2009 - Page 8

On Feb. 16, an editorial in the Chinese-language newspaper the China Times said that the Democratic Progressive Party (DPP) is ideologically opposed to the signing of a comprehensive economic cooperation agreement (CECA) between Taiwan and China. However, the signing of such an agreement would not only affect issues such as Taiwanese sovereignty and economic autonomy, but also affect the lives of ordinary Taiwanese. It is simplistic to argue that the DPP opposes the CECA merely on ideological grounds.

When the DPP was in power, we did comprehensive assessments of the risks and opportunities of major policies, including the big three links and direct flights with China. These assessments were closely analyzed before any policies were implemented and special attention was given to the impact each policy would have on industries and social groups. The small three links were our first test case.

To date President Ma Ying-jeou’s (馬英九) administration has not released any details about what a CECA would entail, nor has it engaged Taiwanese society in any substantial dialogue on the matter. Instead, it simply announced that the basic CECA policy tone has been set and that details will be discussed between the Straits Exchange Foundation (SEF) and China. These decisions show the intransigent nature of the Ma administration’s policy making and its disdain for listening to opinions from the public.

China has maintained a consistent economic strategy against Taiwan that involves making it part of the greater China economic sphere and enslaving Taiwan to China’s economy. China thus does all it can to stop Taiwan from signing Free Trade Agreements with other nations and regional alliances, while also trying to entice Taiwan into signing arrangements similar to the Hong Kong and Macau Closer Economic Partnership Arrangements. This is a current point of contention between the two sides.

In his “Six-Point Proposal” for cross-strait relations, Chinese President Hu Jintao (胡錦濤) said that there is only one China and that its sovereignty and territorial integrity cannot be changed. Therefore, the premise of signing a CECA would be that Taiwan and China share the same understanding of what the “one China” principle means. Taiwan would have to adhere to the “one China” principle and become a part of China. As part of the same “country,” it would relinquish its right to impose anti-dumping measures against China and would be unable to levy equalization duties on China.

This would ultimately see Taiwan become a dumping ground for low-priced goods from China. The negative impact on Taiwan’s small and medium enterprises (SMEs) and our farmers would be immense. While Taiwanese workers, farmers and SMEs would incur huge losses from a CECA, large corporate groups in both Taiwan and China would benefit greatly. It is clear to me, as a member of the team who prepared Taiwan’s accession to the WTO, that an opening-up policy with no form of protective measure is not in line with the spirit of the WTO.

Taiwan’s recent economic performance, in terms of overall economic growth and exports, has been criticized by international organizations as very poor. The main reason is that the Ma administration’s economic policies are overly reliant on China and have resulted in Taiwan losing economic autonomy. For example, as of January, Taiwan’s overall exports dropped by 44.1 percent. The main reason was because our exports to China decreased 58.6 percent, whereas China’s exports for the same period dropped by only 17.5 percent. This drop-off included a decrease in the number of exports of many Taiwanese products or key components that China has managed to reproduce and make by themselves. This is a warning the Ma administration must take seriously.

The first task for the government is to solve Taiwan’s unemployment problem. If the Ma administration signs a CECA with China and allows technological professionals, funds, labor and products from Taiwan and China to move in an even freer fashion, not only will local employment opportunities be influenced by an influx of Chinese workers, it will also be much easier for Taiwanese businesspeople to invest in and set up factories in China. This will not only move all of Taiwan’s production lines to China, it will also see the products produced in China sold back to Taiwan where their lower prices will be used to compete with local manufacturers’ products. This will cause even more of our businesses to close down, impact our local industries, increase job losses for our workers and thus worsen Taiwan’s unemployment problem.

We are fighting to avoid this nightmare scenario. The reality is that cross-strait relations are no longer just a matter of sovereignty; the survival of our economy is also at stake. This is why I object to the China Times’ cavalier dismissal of the DPP’s opposition to CECA as “ideology.” All the possible ramifications of a CECA must be thoroughly discussed because they have the potential to have a heavy impact on the vital interests of the people of Taiwan.

Tsai Ing-wen is chairperson of the Democratic Progressive Party.