Taiwan's Economic Future Can Hardly be built on Pipe Dreams
China Times editorial (Taipei, Taiwan, ROC)
January 5, 2011
Summary: Tsai Ing-wen boasts that "We will set the agenda within multilateral organizations. We will increase Taipei's space on the international stage." Is the ignorant? Is she naive? Or is she merely attempting to deceive outsiders and the general public? Tsai Ing-wen may have a dream. But Taiwan's economic future cannot be built on her personal, impracticable, unrealizable pipe dreams. She wants multilateral negotiations to replace bilateral and regional negotiations. In the end however, she will merely increase Taiwan's economic marginalization and isolation.
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DPP presidential candidate Tsai Ing-wen has issued numerous public statements during the recent presidential debates and policy presentations. Her ideas for Taiwan's economic future all call for organizing a negotiating team to "set the agenda" during negotiations within multilateral organizations. Is this a realistic solution? Is it practicable? Can it actually be implemented? Or is it all flash and no substance? Is it mere self-aggrandizement and self-deception? Will it put Taiwan's economy in grave danger?
Tsai Ing-wen has repeatedly stressed the importance of multilateral organizations. Her goal is to get rid of the KMT created bilateral framework known as ECFA. When Ma and Tsai debated ECFA last year. Tsai Ing-wen harped on the importance of negotiations within multilateral organizations. She sternly rebuked Ma Ying-jeou. She said her scenario could be achieved during the WTO Doha Development Round negotiations. Her boast was of course nonsense. During the recent policy presentations, she once again vowed, "We will organize a strong negotiating team. The government will take the lead. It will work together with industry. We will strike in the international arena. We will set the agenda with multilateral organizations. We will increase Taiwan's international breathing space." She unquestionably has thing for negotiations within multilateral organizations.
Unfortunately, the global trend is running counter to Tsai Ing-wen's Goldilocks scenario. A number of multilateral economic and trade organizations have relations with us. The most important of course are the WTO (World Trade Organization) and APEC (Asia-Pacific Economic Cooperation). We have yet to become members. The United States is promoting the TPP (Trans-Pacific Economic Partnership Agreement). APEC remains a loose networking organization, irrelevant to our current discussion. The United States is promoting the TPP. Both Ma and Tsai say they intend to seek membership. But the TPP is an economic tool of Washington, designed to contain Beijing's influence in Asia. Its prospects remain uncertain. It is bound to become an arena in which the two giants, Beijing and Washington, jockey with each other for economic influence. Taipei cannot possibly hope to "set the agenda" here.
The WTO Doha Development Round of multilateral negotiations are still ongoing. They began in November 2001. Progress over the past decade has been slow. Results have been inconclusive. Over the past decade, negotiations were suspended twice. Negotiations were originally supposed to conclude in January 2005. But the deadline has been extended several times. No one knows when the talks will adjourn. In June this year, the Doha Development Round was changed. A compromise was reached. The rounds would be completed in phases. But WTO Secretary General Pascal Lamy says that only when agreement is reached on all issues will the talks be considered a success.
Compared this against the successful completion of the Uruguay Round negotiations. The Doha Development Round negotiations have encountered difficulties caused by external factors. The Uruguay Round negotiations were led by a small number of developed nations. The rest were mere followers. The Doha Development Round negotiations meanwhile, are subject to the growing strength of emerging countries. This has made already complex decision-making processes even more difficult. Agricultural and non agricultural market access are among the most divisive issues. The problems appear insoluble. Lamy described the impasse in negotiations as a Gordian Knot. An agreement was originally expected by the end of 2011. But this has once again been postponed.
The inescapable fact is that the Doha Development Round negotiations have stalled. Governments have switched to bilateral and regional trade agreements, and to various free-trade agreements (FTAs). As of this year, over 300 FTAs have been signed the world over, and the number continues to increase. South Korea and the European Union, India, the United States and other important countries have all signed FTAs. The Chinese Mainland and ASEAN's "East Asia Free Trade Area" has taken shape. It is being followed by Japan and South Korea's "ASEAN plus three." Tsai Ing-wen is enamored with negotiations within multilateral organizations. But such negotiations have made no progress. They have stalled across the board. Tsai Ing-wen's economic prescription reveals her utter ignorance of the strategic picture. If implemented, her economic prescription would leave Taiwan in dire straits.
Tsai Ing-wen is not merely ignorant about bilateral and regional negotiations around the globe. She is oblivious to the harsh international reality. Negotiations in multilateral organizations, as we all know, are conducted by the Big Guns. The major items on the agenda are always set by the major players. During such talks, the smaller countries can only nod in agreement. In future negotiations within multilateral organizations, the advanced nations of Europe and America will inevitably take the lead, along with the emerging BRIC economies and other countries with international influence. They will be the stars of the show. These countries have at least a trillion dollars or more in assets. The Taiwan Region of the ROC has an economy valued at $400 billion. By what stretch of the imagination can it "set the agenda" during negotiations within multilateral organizations? When has Taipei ever set the agenda during negotiations within multilateral organizations over the past several decades?
The DPP was in power for eight years. Tsai Ing-wen was vice premier for a year and a half. During that time, Taipei participated in negotiations within multilateral organizations. When did it ever "set the agenda?" Are we to understand that Taiwan's economic strength and international influence has suddenly grown by leaps and bounds over the past few years. Are we to understand that Taipei is now one of the Big Guns in the international arena, one able to "set the agenda?" Tsai Ing-wen boasts that "We will set the agenda within multilateral organizations. We will increase Taiwan's space on the international stage." Is the ignorant? Is she naive? Or is she merely attempting to deceive outsiders and the general public? Tsai Ing-wen may have a dream. But Taiwan's economic future cannot be built on her personal, impracticable, unrealizable pipe dreams. She wants multilateral negotiations to replace bilateral and regional negotiations. In the end however, she will merely increase Taiwan's economic marginalization and isolation.