The Economic Cooperation Framework Agreement (ECFA) and the recently signed service trade service agreement were not necessary, because the WTO mechanism would be enough to deal with the cross-strait trade relations, experts said yesterday, adding that the deals were part of a carefully crafted plan by President Ma Ying-jeou (馬英九) and Beijing for eventual unification.
“The essence of these trade agreements was 70 percent political and 30 percent economic,” former presidential advisor Huang Tien-lin (黃天麟) told a symposium organized by the Taiwan Society.
“I would say that the ECFA has been a ‘Trojan horse’ and represented ‘eventual colonization framework arrangement’ which will lead to a peace agreement and unification,” he said.
Huang said the service trade agreement, along with Ma’s planned free economic pilot zones across the country and China’s Pingtan Comprehensive Experimental Zone and Western Taiwan Straits Economic Zone, formed part of Beijing’s strategic triangle between this year and 2016, with an aim of absorbing Taiwan.
The other sides of the triangle included the establishment of representative offices on each other’s territory and the “one China” framework, which Ma’s Chinese Nationalist Party (KMT) recently advocated in a meeting with Chinese President Xi Jinping (習近平), Huang said.
The signing of these trade agreements will make the eventual one China market inevitable because of the free flow of investment, personnel and products across the Taiwan Strait, said Kenneth Lin (林向愷), an economist at National Taiwan University.
Ma is responsible for its decision to make the Cross-Strait Economic Cooperation Committee, which consists of government officials from Taiwan and China designated to ECFA-related affairs, including trade disputes, an entity that could not be monitored by the legislature, as well as negotiating for the service trade pact before the trade in good pact — in reverse order from most free-trade agreements, Lin said.
The president appeared to have intentionally avoided going through the WTO mechanism, which is risks making the cross-strait trade ties a domestic affair, he said, adding that the Ma administration has also made a fatal mistake by focusing on the number of liberalized sectors.
While China has offered to liberalize 80 sectors, more than the 64 that Taiwan has promised, liberalization of several critical sectors, such as banking, was conditional and limited, Lin said.
For example, Taiwanese banks are allowed to establish branches and e-commerce companies could operate only in Fujian Province.
The strategy aimed to incorporate Taiwanese businesses in Beijing’s Western Taiwan Straits Economic Zone project and absorb investment, personnel and know-how from Taiwan’s service providers, , the economicst said.
The Democratic Progressive Party’s (DPP) strategy for opposing the trade pact has highlighted the opaque negotiation process, but failed to address the agreement’s overall social impact, including erosion of the freedom of speech, the influence of Beijing’s state capital and a potential monopsony, Lin said.
For example, Beijing could manipulate Taiwanese e-commerce service providers with its control of the Internet content provider (ICP) licenses and dominate Taiwan’s tourism market with increasing numbers of Chinese tourists, Lin said.
With numerous companies of state capital background, China could focus on disrupting the Taiwanese market, if it wanted, without the pressure of generating profits, he added.
Free trade has long been the DPP’s Achilles’ heel because cannot risk opposing free trade outright, Lin said.
“However, when the benefit of free trade cannot be enjoyed by everyone and the wealth gap keeps widening because of the system, the effect of engaging in a free-trade system is questionable, let alone Taiwan’s wrong strategy in making China — rather than the US, the EU or Japan — the top priority pursuing the free-trade agreements,” he said.
The DPP should tackle that issue, Lin said.