TISA Concerns: Real and Phony
United Daily News editorial (Taipei, Taiwan, ROC)
July 4, 2013
Summary: The DPP must ask itself what it wants. It must think clearly. The DPP no longer opposes ECFA. Yet it persists in obstructing TISA, which opens markets ever so slightly. What exactly does the DPP advocate? Is it categorically opposed to any market openings? Is it determined to engage in Orwellian "effective management?" A responsible political party must not use popular unrest as a political tool. If it does, Ultimatetly it will be spurned by the public. The DPP must think before acting!
Full Text below:
The Cross-Strait Trade in Services Agreement, or TISA, has provoked an intense backlash. The opposition DPP is sharpening its knives. It hopes to kill the agreement in the legislature. The Ma administration has launched a comprehensive public relations war in response. Can this agreement, which involves ECFA policy, continue moving forward? Scrutinize these concerns, and one will encounter gross exaggerations about the agreement's impact on domestic industry. These concerns are clearly phony. But certain cross-strait concerns have provoked public discontent. These concerns are real. Therefore, one must understand the actual situation. Only then can one prescribe the proper medicine, and resolve the disputes effectively.
ECFA can be described as a cross-strait FTA, (Free Trade Agreement). Following the 2012 presidential election, the DPP reluctantly endorsed ECFA. It was compelled to do so, because it knew ECFA would enhance the competitiveness of Taiwan's economy. More importantly, it know ECFA would help Taiwan participate in regional economic integration. ECFA is merely a framework for negotiations. TISA by contrast, marks the beginning of substantive negotiations on cross-strait free trade. But examine TISA's content. TISA is merely a tiny step. It is hard to call TISA a real FTA.
On the surface, our side gave the Mainland side 64 market opening commitments. But compare TISA to Taipei's accession to the WTO (World Trade Organization) in 2002. We made 119 commitments. Most sensitive sectors were excluded. Among 64 commitments, 27 were already open to investment from the Mainland. They included tourist hotels, restaurants, wholesale herbs for Traditional Chinese Medicine, and automobile leasing. Newly opened businesses numbered fewer than 30, mostly in non-sensitive, general service industries. Most of them merely permitted foreign investment.
The other side did not complain about the discriminatory treatment it received. Instead, it made Taiwan 80 commitments that exceeded WTO requirements. These included finance, transportion, e-commerce, and cultural and creative industries. Taiwan business investments on the Mainland still face considerable uncertainty. But the Mainland has unquestionably been making concessions to Taiwan.
Compare the extent of the two sides' market openings. Our side opened its markets only a little. Yet we demanded more and gave less. The opening was lopsided. Had it been any more lopsided, the term "trade liberalization" would lost all meaning.
Consider the impact on industrial production. The impact of opening a market to goods, is completely different from opening a market to services. Foreign investment in certain specific services, may involve either new investments or mergers and acquisitions of existing businesses. But they take nothing from the service industry as a whole. At most they substitute one investor or one manager for another. In the service sector, local businesses have the advantage. If foreign operators hope to enter the market and base themselves on Taiwan, they will not necessarily be competitive. They may even inadvertently stimulate the long-term development of local service industries. As a result WTO rules do not include any damage compensation mechanisms. Some may denounce TISA as an abomination. They will overstate its impact. These concerns are phony. But they have unfortunately provoked widespread suspicion and unhealthy panic.
Meanwhile, there is another core issue must not be overlooked, one that the Ma administration must address. Suppose our government had signed a TISA type agreement with the United States or another country. The public reaction would have been very different. The controversy would not have been nearly so intense. Why has TISA provoked such intense anxiety? The answer is that the government has placed excessive emphasis on the Mainland concessions to Taiwan. It has neglected the contribution of free trade to national security.
The public has clear expectations about cross-Strait economic and trade relations. Most people are willing to accept gradual cross-Strait economic integration that enhances Taiwan's international competitiveness. But many worry about the vast differences in scale between the two sides' economic and political systems. Large numbers of Mainland businesses and Mainland personnel entering Taiwan could lead to variety of side effects. Many worry that Mainland markets, technicians, and professionals could exert a powerful gravitational force on Taiwan that could undermine its economic strength.
Therefore the Ma administration must communicate with the public. We do not mean it should hold various seminars, give speeches in front of temples, sponsor grassroots workshops, or trumpet the benefits for Taiwan. We do not mean it should provide compensation for local industries. We mean that the government must let the public know that it is aware of their concerns. It must create an all-inclusive mechanism to ensure that these public concerns about market opening do not become realities. The government must not put the cart before the horse. It must reassure the public. Only then will it be able to respond to future market openings.
As for the DPP, it must ask itself what it wants. It too must think clearly. The DPP no longer opposes ECFA. Yet it persists in obstructing TISA, which opens markets ever so slightly. What exactly does the DPP advocate? Is it categorically opposed to any market openings? Is it determined to engage in Orwellian "effective management?" A responsible political party must not use popular unrest as a political tool. If it does, Ultimatetly it will be spurned by the public. The DPP must think before acting!
2013.07.04 04:35 am