Force Manufacturers to Relocate rather than Sign ECFA?
United Daily News editorial (Taipei, Taiwan, ROC)
January 26, 2010
The first round of negotiations over ECFA begin in Beijing today.
Three main reasons have been cited for opposing ECFA. Reason 1. ECFA is not merely an economic issue. It is also a political issue. Signing ECFA means that the two sides of the Taiwan Strait will be more closely bound together. Reason 2. Beijing should publicly agree to Taipei signing FTAs with other countries. Otherwise, Taipei should refuse to sign an ECFA with Beijing. Reason 3. We have alternatives to signing ECFA. For example, we need only build factories in any one of the ASEAN plus One or ASEAN plus Three nations. Once we do so, we automatically gain access to them all.
Let's begin with Reason 1. Signing ECFA will give us a 5-10 percent Mainland tariff reduction. But this applies only pertains to exports. Even more important is total exemption from tariffs. That would allow manufacturers to keep their factories on Taiwan, increasing employment opportunities on Taiwan. If we do not sign ECFA, the manufacturers may be forced to move their plants to Southeast Asia or Mainland China. If that happens, the unemployment problem on Taiwan will surely deteriorate. Therefore, one of the reasons for signing ECFA is to encourage manufacturers to keep their roots on Taiwan. Those who oppose signing ECFA may ask "What's wrong with relocating?" This may solve the manufacturers' problems, but exports will become less competitive. Worse, it will exacerbate unemployment on Taiwan. If manufacturers are able to set up factories on Taiwan, why should they be forced to move to Southeast Asia?
When it comes to signing FTAs with other countries, there appears to be no difference between the pros and the cons. But even if we can't sign FTAs with other countries at the moment, we must sign an ECFA with Mainland China. Globalization and regional economic organizations are a macro level trend. Taipei must seek the same tariff treatment as other countries on Mainland China. It must provide incentives for companies to build plants on Taiwan. Therefore it must sign ECFA. Taiwan's exports constitute 70% of its GDP. Taiwan's exports to Mainland China constitute 40% of its total exports. We now face ASEAN plus One (Mainland China), ASEAN plus Three (Mainland China, Japan, and South Korea), ASEAN plus Six (add India, New Zealand, and Australia), and ASEAN plus Seven (Russia). Do people really want manufacturers on Taiwan to relocate, rather than sign ECFA? Those who oppose ECFA do not object to products from Taiwan being sold on the Mainland. Do they object to products from Taiwan being tariff-free? Do they object to manufacturers on Taiwan remaining on Taiwan? Of course it would be best if Taipei could also sign FTAs with other countries. But for the time being it can't. Therefore it must sign an ECFA with Beijing.
If Taipei can some day become part of "ASEAN plus Four," it might be able to use its membership to protect its political interests. But the threat to the livelihood of lower level agricultural and industrial workers is more serious than any threat posed by ECFA. It is precisely because cross-Strait politics is such an important factor, that ECFA will reduce the negative effects on agriculture and industry. Taipei must stand tall. It must face the test of globalization. ECFA is a globalization issue. But it has been deliberately spin-doctored and turned into an issue of cross-Strait politics. It has become a blind spot in the dispute over ECFA. In order to meet the challenges of globalization and regional economic organizations, we must sign ECFA. We must factor in any political risk. As long as the Republic of China, from the president down to neighborhood chiefs, maintains its system of democratic elections, it will have all the support it needs. It will be able to maintain political security in the form of the "status quo and peaceful development"
The most fundamental concern is that after signing ECFA, Taipei must not be subject to Beijing's control. ECFA is of course not limited to only economic matters. It also has political implications. Therefore the choice to sign or not sign ECFA, is actually a choice between two political strategies. Naturally advocates Taiwan independence oppose ECFA. But if the proposal advocates "neither reunification nor independence," they should agree to sign ECFA.
If we wish to usher in globalization, we have no reason to oppose ECFA. ECFA will solve cross-strait economic and trade problems. But more importantly, ECFA will solve "ASEAN plus X" regional economic problems. We must be able to survive in a globalized world. Only then can we find solutions to our political problems. If our economy cannot survive, how can we find solutions to our political problems? One might say that signing ECFA will bind Taipei. But it would be more accurate to say that not signing ECFA will bind Taipei to the wrong political strategy.
Taipei's economic path has been affected by its political situation. Conversely, Taipei's political path has been affected by its economic situation. The advent of globalization and regional economic organizations are Taipei's greatest economic challenges, and also its greatest political threat. In cross-Strait relations, the challenges of bilateral economic and trade relations have already exceeded those of direct political or military threats. The controversy over ECFA boils down to a simple reality. Taipei must adopt certain political and economic strategies for its survival. But Taipei cannot ignore globalization and regionalization, and the "ASEAN plus X" tidal wave. It cannot ignore the urgency and necessity of signing ECFA. That is, unless we really want manufacturers to relocate.
2010.01.26 02:59 am