The subject of free trade agreements has been in the news lately, as the government warned about the ramifications of a recently inked accord between mainland China and South Korea.
According to the Chung-Hua Institution for Economic Research, after the FTA between China and South Korea takes effect, Taiwan’s GDP will drop by 0.5 percentage points, affecting a number of local industries including steel, machinery, cars, panels, petrochemical and textiles.
South Korea currently enjoys 62.6 percent FTA coverage, while Taiwan has merely 9.7 percent coverage, the government said. As countries in the Asia-Pacific region race to sign trade agreements with mainland China, Taiwan risks being marginalized in the global trend of economic integration.
This is what the government said. However, if this is true, one cannot help but wonder why efforts to establish treaties, such as the Cross-Strait Trade in Services Agreement, face so much opposition from the public, evidenced by the Sunflower Student Movement in April that led to delayed ratification of the service trade pact.
The opposing Democratic Progressive Party agreed with the ruling Kuomintang that South Korea’s FTA with China may have an adverse impact on some local industries, but the degree of impact and its chances of becoming a reality are still up in the air.
The DPP says that it supports the idea of signing FTAs with other countries, however, a comprehensive study of local industries must first be conducted, and a robust system of rule of law and structural reform must also be implemented.
In addition, the DPP says that the government must also step up its efforts to cultivate talented negotiators, establish a buffer mechanism to protect the disadvantaged groups, improve its communications with society, strengthen oversight of the legislature, and develop a clearer road map and strategies for Taiwan’s global trade.
Despite the KMT’s accusation that the DPP’s political bickering has foiled its efforts to participate in regional integration, the opposition party’s claims and demands do sound rational and reasonable.
At least one thing is sure: The government must do a better job to convince the public, instead of relying on “scare tactics,” merely pointing to the hazards that Taiwan will face without FTAs.
It has to step up its efforts to address concerns the public has regarding signing treaties with Beijing.
Protesters of the Sunflower Movement highlighted their concerns in a public statement, saying that the cross-strait service trade pact “will allow large capital to devour the majority of small farmers, laborers and small businesses” in Taiwan.
The concern is not unfounded. According to JoAnn Fan, a visiting fellow at The Brookings Institution who testified at the U.S.-China Economic and Security Review Commission’s June hearing, Taiwan’s trade agreements under the Economic Cooperation Framework Agreement, including the service trade pact, generally foster uneven competition between Taiwan’s small and medium-sized enterprises and large, state-owned Chinese firms.
The trade gains are usually limited to a few beneficiaries while most firms and workers “appear to be left without substantial recourse or trade adjustment compensation,” Fan said.
Another concern many Taiwanese have is that closer economic ties with mainland China will make Taiwan more dependent on China. When Taiwan cannot survive without the Chinese market and when the two sides become inseparable, whether Taiwan can stay as an independent sovereign nation will be in question.
Taiwan is “facing a turning point” in cross-strait relations, former U.S. Secretary of State Hillary Clinton said recently. She warned of Taiwan’s vulnerability from its increased reliance on China and linked Taiwan’s greater economic dependence with political dependence.
“Every time you make a decision, whether it is in a trade agreement or on flight routes, you must take a prudent view of the expected results and whether there may be unintended consequences,” Clinton warned.
Therefore, besides persisting in signing the cross-strait service and goods trade pacts, maybe the government can also spend more time and energy to address the public’s concerns and questions.
(Editorial, The China Post)
(Asia News Network)
