On Dec. 8, the Chinese government announced a temporary ban on imports of 887 fishery products, 123 beverages and 110 pastry products from Taiwan. While ministries and departments have been planning countermeasures, here are three suggestions for the government to consider:
First, Taiwan should apply to the WTO for arbitration to settle this dispute. Council of Agriculture Minister Chen Chi-chung (陳吉仲) responded to China’s import bans by saying: “We do not rule out the option of filing a complaint with the WTO.”
Apart from being a passive response, the WTO has no such procedure to “file a complaint.”
China has breached its legal obligations under the WTO’s Technical Barriers to Trade Agreement, causing huge losses to Taiwan’s trade interests, so the nation should argue its case on these grounds.
This is precisely why the WTO’s dispute settlement mechanisms exist. Such a procedure might also counter China’s scheme of deliberately defining Taiwan’s economic and trade relations as domestic affairs of China.
In the process of seeking arbitration, Taiwan should invite WTO member countries that have friendly relations with it — such as the US, EU countries, Japan and Canada — to join the action as “third parties” in a “coalition of victims” to demand that China engage in consultations in accordance with legally defined procedures. Such an approach would be worth pursuing.
Second, the government and businesses should make a joint effort to diversify Taiwan’s export markets. Many Taiwanese exports are overdependent on the Chinese market, and coupled with China’s unwavering denial of Taiwan’s sovereignty, concerns about the risks the nation faces have been heightened.
For example, about 90 percent of Taiwan’s exports of black tea, whiskey and fresh fruit are aimed at the Chinese market, making Taiwan vulnerable to Chinese policies that inflict pain on the nation.
The main task of advanced countries’ agricultural ministries is to help remove obstacles to exports of agricultural products. The Council of Agriculture has had considerable success in expanding overseas markets for agricultural products.
However, it needs to put more effort into joining hands with individual farmers and agricultural organizations to boost organic farming, prevent improper pesticide residue and implement graded product packaging.
Such measures would provide more international marketing strategies and beneficial opportunities for high-quality Taiwanese agricultural products.
Third, Taiwan should face up to the question of whether the Cross-Strait Economic Cooperation Framework Agreement (ECFA) should exist. Taiwan and China signed the free trade agreement under the WTO framework on Oct. 29, 2010, after it was strongly promoted by then-president Ma Ying-jeou (馬英九).
However, the proposed trade in services agreement that was supposed to follow on from the ECFA triggered a lot of discontent among Taiwanese, and eventually led to the outbreak of the 2014 Sunflower movement.
It would be no exaggeration to say that this wave of protests became a sword in the hand of the Democratic Progressive Party (DPP) in the 2016 presidential election, helping it to defeat Ma’s Chinese Nationalist Party (KMT).
However, not all of the items agreed upon in the ECFA have been fulfilled. The DPP has controlled the central government for more than six years, but the ECFA remains a flawed and incomplete free trade agreement, with no clear government explanation or plan for it.
When the ECFA was drawn up, China, which wanted to curry favor with Taiwanese farmers, proposed an “early harvest” list of agricultural products for Taiwan to export to China.
However, the Chinese government has officially banned all imports of Taiwanese fishery products, marking the official end of this part of the agricultural “early harvest” list.
The ban cuts the output value of Taiwan’s fishery products by more than NT$6 billion (US$195 million).
It is the right moment for the government to question whether the ECFA should be scrapped. Especially when it also affects the US, nations in the EU, Japan and other democratic members of the WTO.
Taiwan’s decision about how its deals with this issue might validate the adage: Political enemies cannot remain economic friends for long.
Yen Ching-chang is a former minister of finance and was Taiwan’s first representative to the WTO.
Translated by Julian Clegg
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