Free Trade? Or Evasion and Retreat?
China Times Editiorial (Taipei, Taiwan, ROC)
November 25, 2014
Executive Summary: Voters motivated by economic considerations must seize the opportunity. The Taiwan Region of the ROC has an island-based economy. It must confront economic and financial globalization and the rise of the Mainland. Taiwan has few options. It must connect with the Mainland, then the rest of the world. It must face challenges with an open mind, rather than attempt to escape and retreat from them. Your votes will determine the nation’s future. Consider the issues calmly. Then use your ballots to demonstrate responsible citizenship.
Full Text Below:
Terry Guo urged voters motivated by economic factors to stand up and be counted, and not allow political ideology to permit Taiwan to be drowned by the tidal wave of economic globalization. Guo’s emotion-laden appeal carried profound economic implications. Taiwan's economic miracle was once universally praised. It was one of the four Asian tigers, a title not easily earned. One of the reasons was a pragmatic openness that integrated Taiwan into the global trading system.
During the 1960s, the rise of free trade forced the nations of the world to take part in the globalization game. Comparative advantage became the engine of economic prosperity. In this game, Taiwan was hardly absent. It seized the opportunity to become a major player. Taiwan succeeded because it took part in international trade. Former Administrative Yuan political appointee Hsueh Chi once joked that the WTO's full name should be Watch Taiwan Open. He nailed it. Global economics and finance today are even more integrated. Taiwan faces even more daunting challenges. It has even less latitude for carelessness.
The WTO Doha Round of negotiations has long been stalemated. As a result, governments the world over began competing to see who could sign the most bilateral and regional economic cooperation agreements. Non-membership meant marginalization. On the other hand, timing is everything. Whoever seizes the initiative, will get the biggest piece of the international trade pie. According to WTO figures, governments the world over have implemented a total of 379 regional trade agreements (RTAs), including FTAs. Of these, more than 250 were signed during the past decade. In this regard, Taiwan has lagged behind.
In order to catch up, Taiwan recently signed bilateral economic cooperation agreements with its major trading partners. To achieve a breakthrough in international trade, Taiwan is developing and promoting FEPZs, accelerating the opening of its markets for goods and financial products. It is creating a genuinely liberalized trade environment. Alas, these have come to naught, because the STA and FEPZ bills have remained stalled in the Legislative Yuan.
The PRC-ROK FTA struck like a blow out of nowhere and took Taiwan down. Internal political troubles and competition from trading rivals intensified Taiwan’s economic plight.
The 2008 financial tsunami led to a substantial reorganization of the international trade environment. Emerging Markets, especially in Asia, are growing in importance. South Korea has just signed an FTA with a major trading partner. It is rapidly expanding its territory. It is gaining a foothold in the international trade sector. Taiwan cannot afford to delay. The current administration has finally passed ECFA. It has broken the shackles of international political reality. New Zealand and the ROC have successfully signed an economic cooperation agreement. This will become a springboard facilitating integration into the Asian-Pacific regional economy. In particular, it will enable us to join the Trans-Pacific Partnership Agreement (TPP) and the Regional Comprehensive Economic Partnership Agreement (RCEP), two Mega FTAs. Will this golden opportunity slip away because the STA and FPEZ remain stalled?
More challenges await Taiwan. The PRC-ROK FTA is merely an appetizer. The PRC-Japan-ROK FTA is the main dish. Over the past 20 years, Asian exports to Europe have decreased. Intra-region trade meanwhile has dramatically increased. Mainland China, Japan, and South Korea's share of intra-regional trade increased from 12.3% in 1990 to 20.2% in 2012. This means that once the PRC-Japan-ROK FTA takes effect, the intra-regional trade advantage will further impact ROC trade relations with these three economies. Needless to say, the PRC-Japan-ROK FTA is the heart of the RCEP. The RCEP will probably be signed in late 2015. Its impact on Taiwan will be comparable to that of PRC-Japan-ROK FTA.
How should we on Taiwan respond to these economic and trade difficulties? We must pass the STA, complete negotiations over the MTA, sign economic cooperation agreements with major trading partners, and join the TPP or RCEP. We must do all of these. But these differ from our short-term goals. Our primary objective in the short-term must be to sign the STA and MTA, as soon as possible, and sign FTAs with other countries and join the TPP or RCEP. Successful trade liberalization and internationalization are our mid and long-term goals.
To achieve our long-term goals, our first task must be to pass the FEPZ special regulations. The FEPZs symbolize liberalization, internationalization, a forward-looking attitude, a significant loosening of restrictions over company employees, the movement of goods and capital, and conformance with international legal and regulatory standards. We must reduce barriers to investment, helping domestic and foreign enterprises attract foreign investment. We must upgrade and transform Taiwan’s industries, improving Taiwan's international status. This will help Taiwan participate in regional economic integration as soon as possible.
Voters motivated by economic considerations must seize the opportunity. The Taiwan Region of the ROC has an island-based economy. It must confront economic and financial globalization and the rise of the Mainland. Taiwan has few options. It must connect with the Mainland, then the rest of the world. It must face challenges with an open mind, rather than attempt to escape and retreat from them. Your votes will determine the nation’s future. Consider the issues calmly. Then use your ballots to demonstrate responsible citizenship.
1960年代自由貿易興起，讓世界各國瘋狂加入全球化的遊戲，透過比較利益，帶動經濟的繁榮。在這場遊戲中，台灣不但沒有缺席，更順勢成為主角之一，成功奠定台灣在國際經貿的地位。前行政院政務委員薛琦就曾戲稱，WTO的全名應是Watch Taiwan Open，真是一語中的。如今，在全球經濟及金融更加整合的趨勢下，台灣的挑戰更大，也更加沒有缺席的本錢。