Ma ignoring ECFA consequences

By Wu Ming-ming 吳明敏  / 

Fri, Apr 17, 2009 - Page 8

President Ma Ying-jeou (馬英九) has repeatedly declared that cross-strait economic exchanges will bring many benefits. Is this really true? Can the Taiwanese agricultural sector afford an economic cooperative framework agreement (ECFA) with China? Has the Ma administration properly assessed the possible impact of signing an economic pact with China on the nation?

The launch of direct air and sea transport links with China has not contributed to the incomes of Taiwanese farmers and fishermen. Ma once said that the export of agricultural produce would increase by 20 percent and that the revenues of farmers and fishermen would increase by between 10 percent and 15 percent after the opening of direct cross-strait transport links.

In reality, Taiwan experienced a deficit of NT$9.5 billion (US$279 million) in agricultural product trade with China last year. The gap has since widened further.

Ma said that market deregulation would be beneficial to Taiwanese exports but failed to address the problem that imports would increase at a faster pace than exports.

In addition, the government’s policy to export locally grown bananas and oranges to China in order to revitalize the nation’s fruit industry is nothing short of fraud. Taiwan’s trade deficit in fruit with China topped NT$380 million last year.

Is Taiwanese fruit really in such great demand in China after the resumption of talks between the Chinese Nationalist Party (KMT) and the Chinese Communist Party?

The reality is manufacturing costs in Taiwan are much higher than in China and Taiwanese fruit shops in China have long disappeared from the scene.

The plan to export Taiwanese bananas and oranges to China was just political promotion for the 2006 agricultural forum in Boao in Hainan Province and the signing of direct air and sea links last year.

Sold for only half the reasonable market value in China, growers of these two fruits could not compete without subsidies.

Moreover, Taiwanese agricultural technology is flowing to China and Taiwanese brands are being counterfeited. China has acquired the various agricultural production techniques for notable Taiwanese items such as oolong tea, black pearl wax apples, crown dates, golden bright mangos, atemoyas, giant groupers and moth orchids.

The outflow of these techniques could cause Taiwan enormous economic losses. Take the Japanese market for example.

In 1990 — not long after Taiwanese were allowed to visit their relatives in China — Japan was the second-largest importer of Taiwanese food products, to the value of ¥337 billion (US$3.4 billion).

Last year, the figure had dropped to only ¥93 billion. Japan used to be a major market for Taiwanese agriculture, but today most of that trade has been taken over by China.

More worrying, inferior Chinese agricultural products have repeatedly been exposed around the world in recent years. Many Taiwanese products have been counterfeited by Chinese producers. Sooner or later, these China-made “Taiwanese” products will have a negative impact on the high market prices and good reputation that Taiwanese products enjoy.

The liberalization of cross-strait economic exchanges is a crucial policy for Ma’s administration but he has only been making empty promises that fail to stand up to scrutiny. The government does not seem prepared to come up with measures to cope with the possible impact of market deregulation on the nation.

On behalf of Taiwanese farmers, I would like to ask Ma the following questions.

First, will the export of Taiwanese agricultural produce exceed the amount of Chinese produce imported following the signing of an ECFA?

Of the 1,417 Chinese agricultural products that can now be imported into Taiwan, 350 are exempt from customs payments. Customs fees for the other items will decrease annually. How much of an impact will this have on Taiwan?

The Ma administration has said that the current import ban on 831 agricultural products will remain in place, but is this a unilateral declaration or have the two sides of the Taiwan Strait reached a consensus on the matter?

In addition, exports of more than 2,200 domestic items to China do not enjoy import tax exemptions. Will the Ma administration demand that China make more concessions?

The government has only declared that Taiwan will not open its doors to Chinese labor. This raises the question whether job opportunities for Taiwanese agricultural college graduates and experts will be placed in jeopardy? Has the government adequately assessed the situation?

China is a large source of inferior agricultural products. Will Taiwan and China adopt Chinese standards or Taiwanese standards when drawing up measures for cross-strait animal and plant quarantine, pesticide residues and merchandise standardization?

Since this is a bottom line that involves the health of the Taiwanese public, will China be able to conform to Taiwanese standards?

Although facilitating and speeding up investment is one of the major reasons for signing an ECFA with China, the question remains whether the government has assessed the possible impact on Taiwan of Chinese investment in the nation’s agricultural industry. Cases of China-based Taiwanese businesspeople being exploited in China are common-place.

Will the talks on protection of Taiwanese investment in China truly protect the rights of Taiwanese businesspeople or will they suffer even more losses?

The increased liberalization of the movement of products, services and labor will lead to a vertical division of labor. That is to say, an influx of cheap Chinese agricultural labor might give rise to unemployment among Taiwanese farmers.

The cases of Taiwanese agricultural products being counterfeited in China have seen a sharp increase of late. Has the government made an assessment of how this will damage the image of Taiwanese brands and more intangible economic values?

What are the supplementary measures that will be employed to combat the harm caused by an ECFA with China to Taiwan’s farmers and agricultural industry?

Following an economic pact with China, Taiwan’s sovereignty will likely be compromised under the “one China” framework. Thus the content of the pact should first be reviewed by the legislature and then decided in a referendum.

The liberation of the cross-strait market may turn out to be a disaster for Taiwanese agriculture. If the Ma government does not carefully assess the repercussions, Taiwan’s agricultural industry may collapse. This is not what the public expects of an ECFA with China.

Wu Ming-ming is an honorary professor in the Department of International Marketing at Kainan University and honorary chairman of the Taiwan Agricultural Academia-Industry Alliance.