Academics say CECA is a unification trade trap

THREAT: The MAC chief defended the government's stand on inking a CECA, saying it would cause neither an influx of Chinese workers nor products into Taiwan

By Jenny W. Hsu and Mo Yan-chih  /  STAFF REPORTERS

Fri, Feb 20, 2009 - Page 1

Signing a Comprehensive Economic Cooperation Agreement (CECA) with China is just one step from de jure unification, academics said yesterday, accusing the government of being over-reliant on Beijing while neglecting the implementation of effective measures to solve the domestic economic crisis.

Speaking at a forum held by Taiwan Advocates, economists said that inking a CECA with Beijing would deter foreign investors from doing business in Taiwan, as most of the benefits would go to China while Taiwan’s unemployment rate would continue to skyrocket.

A CECA would merely be a “morphine drip” to temporarily relieve Taiwan’s financial woes without curing the ailment. As Taiwan becomes addicted to Beijing’s handouts, it would eventually lose its economic autonomy and, in the end, its sovereignty, said Kenneth Lin (林向愷), professor of economics at National Taiwan University.

“When a country loses its economic autonomy, it loses its sovereignty,” he said, urging pro-government economists and industrialists to “stop beautifying the ugliness of China’s economy.”

“President Ma Ying-jeou’s (馬英九) flawed China-centric policy will only see Taiwan’s economy and the nation deteriorate further. He does not deserve to call himself a Taiwanese,” Lin said.

He said the nation’s competitiveness would plummet if the Ma administration refused to diversify investments away from China.

Lin said Taiwan could end up in a worse position than Hong Kong, whose GDP growth slowed from 23.6 percent in 1997 to 5.2 percent in 2001 as its top resources flocked to China after the handover.

EU Study Association director Steve Wang (王思為) questioned the legitimacy of an economic treaty with China, including what title and status Taiwan would hold in such an agreement.

“Can the government guarantee that Taiwan will be on an equal footing with China and not be reduced to an administrative region? The government has yet to fully explain to the public the pros and cons of a CECA,” he said, suggesting that the agreement undergo a legislative review or a referendum before ratification.

Wang criticized the administration for telling the public that signing a CECA with China would secure economic advantages and comparing the agreement to the formation of the EU.

“The European nations formed a union to consolidate their strengths to solidify their place in the world. But Taiwan is leaning heavily on a less developed country to boost its own economy. What kind of logic is that?” Wang said.

Hung Tsai-lung (洪財隆), an associate research fellow at the Taiwan Institute of Economic Research, said Taiwan could lose its bargaining power if it panders to Beijing’s wishes.

Hung proposed negotiating a free trade agreement (FTA) or CECA with China under the WTO’s guidance and in accordance with the global organization’s laws.

Both Taiwan and China are WTO members.

Taiwan must demand that Beijing demonstrate goodwill prior to signing any agreement, such as stopping its efforts to block other nations from signing FTAs, he said.

Taiwan has signed FTAs with five of its diplomatic allies — El Salvador, Honduras, Panama, Guatemala and Nicaragua — the Ministry of Foreign Affairs said.

Meanwhile, Mainland Affairs Council Chairwoman Lai Shin-yuan (賴幸媛) yesterday defended the government’s plan to sign a CECA with China, saying it was not tantamount to a full liberalization of trade and exchanges with China.

Dismissing Democratic Progressive Party (DPP) Chairperson Tsai Ing-wen’s (蔡英文) criticism that a CECA would marginalize local industries, Lai said the pact would promote cross-strait economic exchanges without damaging Taiwan’s economic independence.

Lai said in an article published in the Chinese-language United Daily News yesterday: “The opposition party confuses the CECA with a free trade agreement. Taiwan would never implement a full opening to mainland China regardless of the agreements signed to normalize cross-strait economic exchanges.”

Lai brushed off Tsai and the DPP’s concerns about the agreement’s threat to local businesses and workers, saying the president had promised on several occasions that the government would not allow Chinese workers or more Chinese agricultural products to enter the domestic market as part of the agreement.

In an interview with the Taipei Times on Wednesday, Ma reiterated the government’s plan to sign a CECA with China, but repeated his promise that he would not permit an influx of Chinese workers nor an increase in imports of Chinese agricultural products after the pact is signed.

Lai said the government would evaluate the effectiveness and consequences of the CECA, and protect local industries and Taiwan’s sovereignty in the process of the normalization of cross-strait economic and trade exchanges.

The signing of a CECA will affect people’s lives, and the issue should not be simplified into a matter of ideology, she said.

It is unrealistic to treat the CECA as a panacea for the nation’s economic woes, she said.

It was also hasty to assert that the agreement will come at the cost of Taiwan’s sovereignty and economic independence, she said.