Wed, Jan 27, 2010 - Page 3 News List

US pundits wary of overreliance on PRC economy

GOOD AND BAD Richard Fontaine of the Center for New American Security said efforts to resolve tension had benefits but also posed risks Taiwan must consider

By Jenny W. hsu  /  STAFF REPORTER

American Cultural Center (ACC) director Scott Robinson, rear right, joins others at a video conference on cross-strait developments in Taipei yesterday.

PHOTO: FANG PIN-CHAO, TAIPEI TIMES

The US remains optimistic about cross-strait detente, but Taiwan’s overreliance on the Chinese economy could be detrimental to its own economy and its trade ties with Washington, US academics said yesterday in a Web cast hPbr />

Richard Fontaine, senior fellow at the Center for a New American Security, said the efforts by Beijing and Taipei to resolve historical tensions and lift trade prohibitions — including by inking an economic cooperation framework agreement (ECFA) — could enhance cross-strait rapprochement, but also posed risks for Taiwan.

‘ASYMMETRICAL’

At the moment, China purchases 40 percent of Taiwan’s exports, a figure that is expected to increase after an ECFA, he said.

This “asymmetrical” relationship will give China even more clout over Taiwan’s economy, while Taiwan’s ability to influence its neighbor’s economy will shrivel, he said.

Fontaine said Taiwan should aim to diversify the destinations of its exports by being more assertive in pursuing trade pacts with other countries in the region, including ASEAN countries, and by bolstering its ties with the US.

RISK REDUCTION

By doing so, Taiwan could avoid “handing China a potent tool for non-military coercion,” as Beijing could manipulate Taiwan by limiting the number of Chinese tourists traveling across the Strait, unilaterally reducing the flow of investment into the country or imposing new trade barriers, he said.

While there has been talk that forging an ECFA with Beijing would open the door for Taiwan to better integrate into the region economically — for example by allowing it to sign more free-trade agreements (FTAs) with other countries — “it remains quite unclear” whether Beijing would stop obstructing its interaction with other nations, Fontaine said.

RESTRICTIONS

A Taiwanese delegation is currently in Beijing for a preliminary round of negotiations on the ECFA. Delegation leader Kao Koong-liang (高孔廉), the deputy chairman of the Straits Exchange Foundation, has said that under the ECFA, the government would maintain restrictions on Chinese labor and Chinese agriculture entering the Taiwanese market.

Some media outlets have speculated that the agreement could be signed as early as April.

Alan Romberg, a Taiwan specialist at the Stimson Center in Washington, said it is understandable that the government would avoid disclosing too many details during the ECFA talks, but President Ma Ying-jeou (馬英九) must do a better job of presenting the deal to the public than he did with US beef.

THE GOAL

Beijing’s ultimate goal, Romberg said, is not economic but “to win the hearts and mind of the Taiwanese people.”

It would therefore be logical if the ECFA benefited Taiwan without sacrificing the interests of China, he said.

Romberg said that Beijing should be more generous in allowing Taiwan to participate in the international community under the understanding that the matter of Taiwan’s sovereignty should remain off the table for the time being.

The panel agreed that the current row over US beef could best be resolved through the WTO, saying the damage done to Taiwan-US trade ties — such as the US’ prolonged hesitancy to hold bilateral Trade and Investment Framework Agreement talks — must not be overlooked.

WTO

Bonnie Glazer, a senior fellow at the Center for Strategic and International Studies said that although beef imports were a relatively minor part of overall Taiwan-US ties, it would be in Washington’s best interests to “put [the matter] in the hands of the WTO.”

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