Rice Exports and Self-Confidence

Rice Exports and Self-Confidence
China Times Editorial (Taipei, Taiwan, ROC)
A Translation
November 17, 2015

Executive Summary: Recently thousands took to the streets of Taipei to oppose the MTA. Their primary concern had nothing to do with “opposition to [Mainland] China", but rather the negative impact they think the MTA will have on local agriculture. DPP presidential candidate Tsai Ying-wen said, "Once Taiwan joins the TPP, and signs bilateral and multilateral FTAs, the MTA will become top priority for the DPP". The KMT has long sought to join the TPP. But progress has been limited. The MTA has been subject to even longer delays.

Full Text Below:

Recently thousands took to the streets of Taipei to oppose the MTA. Their primary concern had nothing to do with “opposition to [Mainland] China", but rather the negative impact they think the MTA will have on local agriculture. DPP presidential candidate Tsai Ying-wen said, "Once Taiwan joins the TPP, and signs bilateral and multilateral FTAs, the MTA will become top priority for the DPP". The KMT has long sought to join the TPP. But progress has been limited. The MTA has been subject to even longer delays.

Therefore we must recognize the real problem dogging Taiwan's economic and trade policies. It is not joining the TPP or RCEP, or signing this or that FTA. The real problem is getting the ruling and opposition parties, as well as the general public, to agree to open markets and trade liberalization.

Last year, the political opposition obstructed passage of the STA. Since then, Taiwan has either retreated or stood still on trade liberalization. The MTA, TPP, RCEP have not moved forward. Even the FEPZ was aborted. But Taiwan cannot afford to retreat from trade liberalization.

The Taiwan Region has a small scale economy. Its lifeblood is exports. These account for 70% of its gross domestic product (GDP). Taiwan has been shut out of nearly all global FTAs and regional economic and trade organizations established during the past decade. Many trade experts are worried about Taiwan's economic and trade marginalization. They are not indulging in fear-mongering. Marginalization has already happened, and is ongoing.

Taiwan's exports declined for nine consecutive months this year. For nearly five months, the decline was in double-digits. From January to October, the decline was nearly 10%. This decline in exports is admittedly related to the global economic slowdown. Therefore export-oriented Asian neighbors have, without exception, also experienced export declines. But the rate of decline on Taiwan has been significantly higher than in other regional economies. Mainland China exports declined 2.5% this year. Hong Kong exports declined 1.5%. South Korean exports declined 7.6%. Taiwan's export decline is more serious. Not only has it affected product competitiveness, it has also led to trade and economic marginalization.

Understanding the benefits of FTAs does not require esoteric economic models. Common sense is perfectly adequate. Suppose Taiwan and South Korea export similar products to the United States. Taiwan must pay a 5-10% tariff. Korea benefits from the Korea-US FTA and pays no tariffs whatsoever. It should be perfectly obvious who the winner will be. Some think that signing FTAs and joining regional organizations will not help exports. But in the past, ever since the US-ROK FTA and US-EU FTA went into effect, Korea has taken over the market for Taiwan products. Unless a country's products are non-competitive, FTAs definitely have a positive effect.

But FTAs and regional economic and trade organizations are never one-way streets. When we ask others to open their markets to us, we are also obliged to open our markets to them. On the negative side, vulnerable domestic industries will find themselves under greater pressure. They may even be eliminated completely. But on the positive side, open markets will allow industrial upgrading and restructuring. Competitors who are unable to cope, will exit the market. Resources will be freed up and used more efficiently. This will eventually raise our economic efficiency, and improve our economic health.

Over the past 30 years, Taiwan's economy has become increasingly open, competitive, and progressive. Agriculture is generally considered one of the most vulnerable sectors. In 1981, under US pressure, Taiwan allowed turkey imports. Thousands of chicken farmers marched on Taipei in protest. Then ITC Secretary Vincent Siew was “egged” by farmers, and wound up in the spotlight. But consumers found American turkey meat dry and tough, and not at all to their taste. Ten years ago, cheaper US chicken imports failed to beat Taiwan chicken. Local farmers raised higher-priced free range chicken, corn fed chicken, black boned chicken, and grass fed chicken. Recently Mainland e-commerce company Alibaba began selling Taiwan rice. It enabled Taiwan farmers to sell their rice for 50% more than previously. After allowing in rice imports from Papua New Guinea, Taiwan's rice exports surged to nearly 30,000 tons in three months.

Beginning in the mid-1980s, under US pressure, the government on Taiwan gradually opened its markets. It joined the WTO and ECFA and continued to open its markets. Some weak industries disappeared. But many underwent industrial restructuring and upgrading. Taiwan's textile industry went from the manufacture of low value-added, labor-intensive fabrics and garments, to high value-added special purpose apparel. This year a severe recession reduced exports for many products. But special purpose apparel manufacturers continued to thrive. Taipei City alone accounted for half of all high-end fire resistant fabrics.

Consider another perspective. Taiwan's most globally competitive technology industry evolved under open markets. Therefore people on Taiwan ought to be more confident. Market opening is unavoidable. Only by confronting this fact, can industry and economic growth continue to improve.

Looking to the past, we must be more confident about market opening. Looking to the future, we must realize that market opening is unavoidable. In the past, politicians manipulated vulnerable industries and prevented any liberalization whatsoever. But Taiwan's economy declined. The ruling and opposition parties must realize that no matter which party is in power, it must confront the threat of economic and trade marginalization. True, we must join the TPP. But that is not something that can be rushed. For the sake of Taiwan's economy, the ruling and opposition parties must forsake partisan wrangling, reach a consensus, and liberalize trade. In particular, they must reach a consensus on the MTA, then implement it as soon as possible. Only that will prevent trade and economic marginalization in the short term.

從米出口暴增談台灣應有的自信

2015年11月17日 中國時報

日前數千人以反對兩岸貨貿協議為理由在台北遊行，訴求主題不是「反中」，而是擔心「將對本土農工業造成嚴重衝擊」；與此同時，民進黨總統參選人蔡英文卻表示「台灣加入TPP及雙邊、多邊FTA（自由貿易協定）簽訂，會是民進黨接下來的重點工作」。國民黨則更早已確定加入TPP為政策目標，但實質進展有限，兩岸貨貿更已延宕多時。

因此，我們必須承認，台灣未來經貿政策真正的重點與問題，恐怕不僅僅是應該優先加入TPP還是RCEP，或要簽哪個FTA的問題，而是朝野與社會如何建立市場開放與經貿自由化的共識。

從去年反服貿至今，台灣經貿自由化與開放的腳步，即使不是倒退也是停滯不前。貨貿、TPP、RCEP尚無進展，連可操之在己的自由經濟示範區也胎死腹中。但台灣實在沒有停止開放、從經貿自由化退卻的本錢。

作為小型經濟體，出口貿易是台灣經濟的命脈，占國內生產毛額（GDP）的7成左右。而近10多年全球的FTA與區域經貿組織風潮，台灣幾乎全部被排除在外，許多經貿專家憂心的「台灣經貿邊緣化」並非恐嚇之詞，而是確實已發生、正進行中的事。

台灣今年出口已連續9個月出現衰退，近5個月衰退幅度都在兩位數，今年1到10月衰退幅度接近10%。誠然這次出口衰退與全球景氣趨緩有關，因此以出口為主的亞洲鄰國無一例外的走入出口衰退，但台灣的衰退幅度卻明顯高於其他國家，如大陸出口今年以來衰退2.5%、香港衰退1.5%、韓國衰退7.6%。台灣出口衰退幅度較嚴重，除了產品競爭力問題外，也有經貿邊緣化效應因素。

FTA的效益，其實不必靠深奧的經濟模型，以常識思考即可知。如果台、韓出口類似的產品到美國，台灣要課5到10%的關稅，韓國因韓美FTA而可享零關稅，何者能勝出，應該非常明顯。雖然有部分人士不認同FTA與加入區域組織對出口的助益，但由過去美韓、美歐的FTA生效後，台灣產品市場受到韓國產品的搶奪案例來看，除非該國產品競爭力太低，否則FTA對出口必然有加持作用。

不過，FTA與區域經貿組織的開放不會是單向開放，當我們要他國開放市場的同時，也必然要對其他國家敞開門戶、開放市場；負面看當然是國內弱勢產業壓力更大，甚至可能完全被淘汰出局；但正面看則是讓產業提升、轉型，無法因應的競爭者則會退出市場、釋出資源，做更有效率的運用。最後是整體經濟可增加效率、提升體質。

如果回顧過去30年的台灣經濟，也可發現是在不斷的開放、競爭中進步。就以普遍認為最弱勢的農業為例，民國77年在美國壓力下開放火雞肉進口，數千名雞農北上抗議，當時的國貿局長蕭萬長還因被農民「蛋洗」而聞名一時；但開放後乾硬的美國火雞肉乏人問津。再來是10多年前因加入WTO的農產品開放，台灣一樣開放雞肉進口，但10多年下來，便宜的美國雞肉並未擊倒台灣雞，農民反而開發出各種單價更高的放山雞、玉米雞、黑骨雞、牧草雞等。日前傳出大陸電商阿里巴巴以契作方式賣台灣米，讓農民賣出的價格較原來高出50%；而巴布亞新幾內亞開放稻米進口後，台灣米外銷該國在3個月內大增到近3萬噸。

從民國70年代中期，迫於美國壓力而逐步開放市場、再到加入WTO、到後來的ECFA，台灣市場持續開放，固然有弱勢產業被淘汰消失，但不少產業亦相應調整升級，例如台灣紡織業就從低附加價值、勞力密集的一般布料、成衣，提升至高附加價值的特殊、機能衣發展；今年各商品出口嚴重衰退中，台灣的機能服飾出口猶逆勢成長，全球高端的消防布料，台灣市占一半。

甚至換個角度看，台灣最具全球競爭力的科技產業，就是在市場開放中鍛鍊出的。因此台灣應更有自信去面對那不得不承受的開放，產業與經濟才可能持續提升成長。

回顧過去，台灣應更有信心面對開放；展望未來，這也是不得不走的一條路。過去在政客操弄下，每每以衝擊弱勢產業為由阻擋任何自由化政策，但台灣經濟由盛而衰，朝野兩黨應已看出，未來無論哪黨執政，都要面對經貿邊緣化的惡果。TPP誠然必須加入，但卻有緩不濟急之慮；為明日台灣經濟計，朝野該放棄操弄、建立經貿自由化共識，特別是對貨貿建立共識，並盡快推動讓其上路，才能在短期內化解經貿邊緣化危機。