Explain ECFA: Refrain From Name-Calling

Explain ECFA: Refrain From Name-Calling
China Times editorial (Taipei, Taiwan, ROC)
A Translation
April 14, 2010

The debate over ECFA will begin at the end of the month. There has been no shortage of politicians maneuvering for political advantage during the consultation process. But as the leaders of the two sides make their entrance, we expect to see a rational and business-like debate. We also hope the two sides will dispel public doubts by providing people with clear answers.

The reason the government feels such urgency regarding ECFA, is that beginning this year, ASEAN plus One (10 ASEAN countries plus Mainland China) will form an East Asian Free Trade Zone. Its population will number 1.9 billion. In one fell swoop, the average tariff will be reduced from 9.8% to 0.1%. Over 7000 products will be 100% tariff free. Two years later, ASEAN plus Three (Japan and South Korea will be added) and will also form a free trade zone.

Frankly, the impact of this change on Taiwan needs no elaboration. Tariffs on exports among the countries of these regions will approach zero. Tariffs on exports from Taiwan to other economies within these regions will be subject to tariffs of 5 to 10%. The competitiveness of products from Taiwan will decline. In the short term, domestic companies may be able to endure thinner margins. But in the medium to long term, they will not be able enhance their competitiveness by lowering their costs. All they can do is set up factories in these areas, in order to achieve tariff free status. Two years from now South Korea, our major trade competitor, will also become a member. The pressure on us will then be doubled. The affected products will range from petrochemicals and textiles to electronics and machinery.

The DPP must explain. If we do not sign ECFA, what measures does the DPP have have to prevent Taiwan's exclusion from the East Asian Free Trade Area, and to avoid diminished export competitiveness?

Some in the Green Camp say that simply signing FTAs (Free Trade Agreements) with other governments in the region will solve all our problems. Please refrain from parroting this nonsense. ASEAN plus One did not spring into existence last night. As early as 2001, a number of private and official entities began assessing and reporting its potential impact on Taiwan. The DPP was in power for eight years. Did the DPP "solve our problems" then? With which governments in the region did it sign FTAs?

Since the beginning of this year, exports from Taiwan to Hong Kong and ASEAN have increased. Some in the Green Camp have cited this as "proof" that ASEAN plus One has had no impact whatsoever on our exports. Such unprofessional, amateurish comments are better left unsaid. No nation or industry in the world, when it exports to any particular area, will regard the imposition of higher tariffs as "friendly and acceptable." The market will not change overnight. Manufacturers may be able to endure lower short-term profits. But they cannot endure them over the long term. Look at it from another angle. If Taiwan enterprises are well run, they will enjoy higher profits. But with unequal tariffs, businesses under other governments will be more competitive because of their tariff status. Companies on Taiwan can only respond with price cuts and lower profits. If the government has the means to achieve tariff equity but fails to do so, that amounts to a dereliction of duty.

Besides, export competition is not merely about comparisons against oneself. One must also compare oneself against others. Suppose the ASEAN import market grows. Suppose exports from Taiwan to ASEAN increase 10%, but other economies in the region increase their exports by 30%? Taiwan will be the big loser. Does the DPP really not understand this? Increased exports to the Mainland and Hong Kong are clearly related to Mainland procurement purchasing groups that came to Taiwan over the past year. To conclude from these short-term numbers that ASEAN plus One had no impact on exports from Taiwan, is sheer ignorance.

The Democratic Progressive Party opposes ECFA. It even opposes economic and trade exchanges with the Mainland. But the figures before us represent businessmen from Taiwan investing an estimated 200 billion US dollars in the Mainland. The Mainland and Hong Kong account for 44% of all exports from Taiwan. It is also the major source of our trade surplus. Therefore the DPP must make itself clear. What plans does it have for cross-Strait economic and trade exchanges? If the government signs ECFA this year, but the DPP returns to power in 2012, does it intends to abolish ECFA?

As a responsible ruling party, the KMT must not report only the good news and not the bad. Signing FTAs with other governments will of course have a positive impact on the overall economy and on industry. That is why nearly 200 governments have signed FTAs. After signing their export trade has indeed grown. But this is not the whole story. The overall numbers look good. But they have also created winners and losers. The ruling administration must make clear which industries are likely to be losers, and inform us what relief measures it intends to offer these losers.

This matter affects many businesses and many people's jobs. The government cannot merely announce that it is providing tens of billions in relief funds and be done with it. The relief funds must not be like a cake behind a pastry shop window. One can see it, but cannot taste it. The government must make clear what it intends to do. Only then will the public be reassured. More importantly, no one wants to live on charity. The government must offer a set of policies that will provide relief to those who find themselves unemployed as a consequence of ECFA.

The government has reiterated that only after ECFA is signed, will it be possible to sign FTAs with other governments. Based on the reactions of other large governments, it would seem that ECFA may indeed pave the way for FTAs. But as a responsible ruling party, it must make clear the extent to which ECFA will pave the way for FTAs. Can it go a step further and tell us just how long it will take before we can sign FTAs with other governments?

We hope the debate over ECFA between the ruling and opposition parties will fulfill its function as a policy debate. We hope the debate will be professional and free of name-calling. The public has many doubts. Please allay those doubts, by speaking clearly and plainly.

中時電子報 新聞
中國時報 　2010.04.14
社論－辯清楚ECFA 朝野都別亂扣帽子
本報訊

ＥＣＦＡ辯論月底上場，雖然整個協商過程，政客們永遠少不了的政治小動作不斷，但當雙方主帥上場之時，我們期望是看到一場理性、專業的辯論；更期望雙方能對社會大眾的疑義，清楚的給個答案。

政府推動ＥＣＦＡ，最急迫性的因素是今年起，東協加一（東協十國加上中國）的東亞自由貿易區上路，形成一個高達十九億人口的經濟體，平均關稅一口氣由九．八％降至○．一％，其中有高達七千多種商品零關稅。兩年後，東協加三（增加了日本與南韓）自由貿易區也跟著啟動。

坦白說，此一變革對台灣的影響，不辯可知。區內各國彼此出口接近零關稅，台灣出口到此區內還要課徵五到十％的關稅，產品競爭力必然下跌；短期而言，國內企業固然可能殺價流血輸出，但中長期而言，無法壓低成本、提升競爭力者，只能前往該區內設廠，以享受零關稅的待遇。特別是二年後，我國最主要貿易競爭對手國南韓加入後，壓力將倍增，且受影響的出口產品從傳統石化、紡織等擴及電子、機械。

民進黨要講清楚的是：如果不簽ＥＣＦＡ，有什麼對策可消除台灣被排除在東亞自由貿易區外導致出口競爭力下跌？

綠營有人說：與其它區內國家簽訂ＦＴＡ（自由貿易協定），即可突破困境。這種無聊的話，就請不要再講了。東協加一不是突然發生，早在二 ○○一年就可看到民間與官方各種評估其對台灣影響的報告，執政八年，民進黨突破了嗎？與區內那個國家簽下ＦＴＡ？

至於引用年初以來台灣對陸港與東協出口增加的數字，「證明」東協加一對台灣出口毫無影響，這種非專業到完全外行的話，更是甭說了。世界上沒有哪個國家、哪個產業，在出口到特定區域時，面對比其它國家高的稅率，還會視為「友善、可接受者」。短期而言，市場改變不會一朝一夕發生，廠商或許能短暫忍受較低的利潤，但不可能長期忍受。換個角度看，如果台灣企業原本經營能力較強，享受較高的利潤，但因關稅的不平等，競爭力因其它國家免關稅而以低價搶市，台灣企業只能回應降價，利潤降低。如果，政府有辦法爭取到平等的關稅卻不去做，才是失職。

更何況，出口競爭不是跟自己比而已，還要跟其它國家比。當東協進口市場成長時，如果台灣對東協出口增加一成，但其它區內國家增加三成，台灣就是大輸家。難道，民進黨不懂這個道理嗎？至於對大陸、香港出口增加，則明顯與過去一年多的大陸採購團來台採購有關。把短期的數字簡化為東協加一對台灣出口毫無影響，是無知了。

而民進黨反對ＥＣＦＡ，甚至對與大陸的經貿往來都持抗拒質疑的態度；但擺在眼前的數字是台商在大陸投資估計已達二千億美元，陸港占台灣出口的四成四，同時也是主要順差來源。那麼，民進黨也該說清楚，其對兩岸經貿往來的擘劃為何？如果政府真在今年簽下ＥＣＦＡ，萬一民進黨二○一二年重新執政，是否要廢止ＥＣＦＡ？

而對國民黨而言，做為一個負責任的執政者，不能報喜不報憂。與他國簽訂ＦＴＡ，對整體經濟與產業當然有正面效益，所以各國已簽下近二百個ＦＴＡ協定，簽訂後彼此的出口貿易也的確成長。但這不是故事的全部，在總體數字漂亮增長的同時，也產生了贏家與輸家。執政者該講清楚的是：哪些產業是可能的輸家？對那些輸家，政府又有何救濟扶助措施？

這事，關係著許多人的工作、企業存亡，政府不能以一句編列Ｘ百億元的救濟基金帶過，如果救濟基金只是看得到、吃不到，有何意義？政府應該對相關辦法有更明確的交代以安民心。更重要的是，沒有人願意拿救濟金過活，政府對因ＥＣＦＡ而失業的弱勢者，更該有一套輔導轉業的辦法。

此外，政府一再強調簽ＥＣＦＡ後，才有可能與其它國簽ＦＴＡ，觀諸其它主要國家反應，似乎ＥＣＦＡ的確可能有此「帶頭效應」。但做為負責任的執政者，也請說清楚：到底帶動效應有多少？是否能進一步承諾多久時間能簽下多少ＦＴＡ？

我們期望，朝野的ＥＣＦＡ辯論，不僅是形式上達成政策辯論的目的，在實質內容上，更能以專業、不亂扣帽子的的內涵，對外界的疑問，說清楚、講明白！