Monday, April 7, 2014

CSSTA vs. Delusion of Modest but Real Wealth

CSSTA vs. Delusion of Modest but Real Wealth
United Daily News editorial (Taipei, Taiwan, Republic of China)
A Translation
April 8, 2014

Summary: Establishing monitoring mechanisms does not require withdrawing the CSSTA. Doing so would be pointless. First of all, many people do not oppose the CSSTA. Many people took part in one public hearing after another over the past nine months. Restarting negotiations would negatively impact the perception of the Mainland and the international community. This must not be treated lightly.

Full text below:

The Cross-Strait Service Trade Agreement (CSSTA) controversy remains unresolved. The government has responded to student movement demands and made numerous concessions. Yet the students remain unmoved and refuse to disperse. The anti-CSSTA protests are motivated by a mix of Sinophobic sentiment and generational rage. These feelings express themselves both internally and externally. That is why simple solutions are impossible.

The students and masses opposed to the CSSTA hold a variety of views. View One. Even if Taiwan and the Mainland sign the CSSTA, the Mainland will not necessarily green light Taiwan's participation in regional integration. View Two. Even if Taiwan fails to interact with the Mainland, and even if it fails to participate in regional economic integration, it need not be marginalized. View Three. Even if Taiwan is marginalized, it will not matter, as long as the public on Taiwan can enjoy "modest but real wealth." At least Mainland China's influence will not be able to extend to Taiwan.

These are dangerous views. They are no less dangerous than cross-strait opening. First of all, no one can guarantee that once the two sides sign the CSSTA and SSGTA, Taiwan will be able to join the Trans-Pacific Partnership (TPP) or ASEAN 10 plus 6 (RCEP). These require mutual trust through cross-strait dialogue. On the other hand, if the CSSTA is stillborn, one can be sure the road to the TPP will be a bumpy one. Never mind the road to the RCEP.

Secondly, will Taiwan be marginalized? Basically, all economic agreements or integration mechanisms provide benefits to signatories, but shut out non-signatories. If Taiwan is not part of economic integration, it can still export its services or goods. But without tariff concessions, price will be higher. Competitiveness will inevitably be lost to member nations. More importantly, the TPP and other economic integration mechanisms involve numerous regulations. They deny non-members export opportunities. For example, the United States is demanding that TPP member nations use fabrics and key components in order to qualify for duty-free export of clothing and machine tools. These provisions will gradually result in our marginalization.

Thirdly, it is rational to invoke "modest but real wealth" logic when dealing with the Mainland Leviathan? The Mainland is now the world's second largest economy. It is the largest economic partner of most nations in the Asian-Pacific region. Two decades of experience has shown that attempts to block industry interaction with the Mainland are futile. Besides, individuals may pursue "modest but real wealth," but nations cannot. South Korea, Japan, and even the Mainland are pursuing "grand but real wealth." The pursuit of "modest but real wealth" will merely cause Taiwan to shrivel up. Taiwan will be deprived of bargaining chips by which it can deal with cross-strait risk. It will find it more difficult to resist Mainland influence. Academics opposed to the CSSTA argue that a mere 7% devaluation of the NTD is equivalent to signing agreements with other countries. But if the nation's assets instantly shrink by 7%, and the price of imported goods immediately grow by 7%, what happens to our "modest but real wealth?"

All these disputes are over how Taiwan should deal with the Mainland. Anti-Ma sentiment coupled with distrust of the government prevents focusing on real problems. Therefore if President Ma wants to handle this problem, he must resolve new generation distrust, rather than repeatedly stress the importance of the CSSTA.

As we all know, promoting the CSSTA is important. It will revive the economy. It will enable Taiwan to join the TPP and RCEP, via free trade agreements with Asia and the rest of the world. If cross-strait economic and trade relations are obstructed, regional integration will be more difficult, and Taiwan may well be shut out. 

Take the 12 member US-led TPP. Mainland China has yet to join. But the Mainland is already the largest trading partner of the six largest member nations. It is the second largest trading partner of the five other member nations. When Taiwan lobbies these states for support, it will have to answer the following questions. Is Taiwan ready? Does the U.S. support Taiwan's membership? Does Beijing support Taiwan's membership? These are questions we must answer. The more we are ready, the more U.S. support will appear. As for the last question, "Does Beijing support Taiwan's membership?" How will we answer? On this we must be pragmatic.

The CSSTA negotiation process definitely had problems with transparency. A line item review is necessary. The current monitoring mechanism for cross-strait agreements dates back to an era when almost no interaction took place between the two sides. It is no longer adequate. The public expects greater transparency in cross-strait agreements. Therefore legislation establishing monitoring mechanisms in step with the times is essential.

Establishing monitoring mechanisms however, does not require withdrawing the CSSTA. Doing so would be pointless. First of all, many people do not oppose the CSSTA. Many people took part in one public hearing after another over the past nine months. Restarting negotiations would negatively impact the perception of the Mainland and the international community. This must not be treated lightly. Therefore the establishment of a monitoring mechanism and the review of the CSSTA can be conducted simultaneously. That for Taiwan, is the most beneficial arrangement.

2014.04.08 02:45 am











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