President Ma Ying-jeou (馬英九) said yesterday that Taiwan would fail to become a more competitive nation if it were excluded from the Trans-Pacific Partnership (TPP), as increasing economic integration between countries has become a world trend.
“It is not that we cannot live if we don’t join it [the TPP], but the problem is when other countries are pushing for regional economic integration, and we are the only ones left out, it will not be possible for us to increase our competitiveness,” Ma said at a forum in Taipei.
The forum, organized by the United Daily News Group, gathered politicians, business leaders and academics to address and seek solutions for Taiwan’s economic challenges.
Ma said that among Taiwan’s three largest trading partners — China, Japan and the US — Taiwan had already signed an economic pact with China and an investment agreement with Japan. However, he said that talks with the US were at a standstill because of controversy surrounding Taiwanese restrictions on the import of US beef containing residue of the leanness enhancing drug ractopamine.
He said that if the beef issue is not resolved, it will be “very difficult” for Taiwan to resume Trade and Investment Framework Agreement (TIFA) talks with the US or to join the TPP, a Pacific Rim free-trade pact, within eight years, which is his administration’s goal.
Ma said Taiwan’s exports account for 70 percent of its economy and are centered on information and communications technology products, a situation that he said needs to be adjusted to boost the country’s competitive edge.
He also said that if Taiwan maintains its protectionist mindset, it will not be able to liberalize its economy and compete with other countries.
Meanwhile, Hu Sheng-cheng (胡勝正), an academic at Academia Sinica, said in a discussion that insufficient investment in research and development was the reason for Taiwan’s decline in exports.
South Korean research and development funding is four times that of Taiwan’s, said Hu, who questioned whether the amount of funding pumped into local governments has been effective.
He said that young Taiwanese are creative and added that many have won invention awards in international competitions, but pointed out that their creativity is stymied by the lack of a good mechanism to encourage companies to foster their ideas.
On the issue of free-trade agreements, Hu said Taiwan needs to conduct more studies on the political aspects of such pacts so that it can better grasp the possible political considerations that are stopping the US from signing such agreements with Taiwan.