Sat, Nov 28, 2015 page8

• Trade deal puts people at risk for big firms

  • By Lai Chung-chiang 賴中強
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  Bilateral negotiations between Taiwan and China on the proposed cross-strait trade in goods agreement were held last week. Apart from a regulation that imported goods should pass customs within 48 hours, which aroused serious concerns over food safety, China’s main demand was for the “normalization of economic and trade relations,” calling on Taiwan to abolish import restrictions on Chinese agricultural and industrial products.

  Bureau of Foreign Trade data showed that, as of last month, Taiwan’s goods for export and import included 2,207 product items that are not allowed to be imported from China, while a further 330 items can only be imported from China under certain conditions. These items account for about 20 percent of all the listed product types, which number 11,574 in total. Among them are 707 strictly agricultural products, 320 kinds of processed agricultural products and prepared foods and 1,510 other industrial products. When Taiwan joined the WTO, it was determined that if Taiwan allowed imports of these products from China, it would have a heavy economic and social impact, so Taiwan continued to restrict their import.

  Officials have made conflicting statements about how President Ma Ying-jeou’s (馬英九) government intends to respond to China’s demand for the “normalization” of trade ties.

  On Friday last week, the Ministry of Economic Affairs released a document presenting explanatory information on the agreement, which is being negotiated under the terms of the cross-strait Economic Cooperation Framework Agreement.

  The report presented Taiwan’s negotiating positions as follows: First, to proceed step by step, without deregulating everything all in one go; second, not to deregulate sensitive items that affect matters such as food safety, basic safety and the employment requirements of ethnic minorities in outlying areas. Still more worthy of attention is that, in using the Global Trade Analysis Project (GTAP) model to deduce that the agreement, once signed, would boost Taiwan’s GDP by 1.63 percent, the ministry’s report adopts a simulation scenario in which Taiwan reduces tariffs on agricultural and industrial products excluding the 707 restricted kinds of agricultural goods, while China cuts customs duties on all agricultural and industrial products imported from Taiwan.

  In this regard, the ministry’s position of pledging to “normalize economic and trade relations” with China and eventually abolish restrictions on imports of Chinese agricultural and industrial products is exposed for all to see. First, Taiwan seeks to maintain restrictions on the 707 items of narrowly defined agricultural products. Second, it wants to deregulate the 330 kinds of processed agricultural products and prepared foods as the years go by. Third, it also aims to deregulate the 1,510 items in the category of other industrial products over the years. As to “proceeding step by step,” Taiwan wants to follow the “five baskets” model of tariff reduction, under which four broad categories of goods would respectively be deregulated immediately and after five, 10 and 15 years, while those in the fifth “basket” are exempt from deregulation. The actual results of the talks could be even worse.

  Does Taiwan really have to open its doors wider to imports of Chinese processed agricultural products and prepared foods, just to serve the interests of big corporations in the display panel and petrochemical industries? Should we really be sacrificing our food safety and farmers’ rights and the livelihood of workers in industries that serve the domestic market, like steel, textiles, electrical equipment, cables, glass, ceramics, rubber and automobile parts, for the sake of these corporate interests?

  Lai Chung-chiang is convener of the Economic Democracy Union.

  Translated by Julian Clegg
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