Wed, Apr 15, 2009 page8

• Changes in Taiwan, China, US ties

  • By Nat Bellocchi 白樂崎
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  The US and Taiwan marked the 30th year of the passage of the Taiwan Relations Act (TRA) on April 10. The legislation provides an institutional framework and legal basis for US relations with Taiwan, including a promise of continued support for Taiwan’s self-defense.

  Through the years, the TRA has helped maintain the “status quo” in relations between Taiwan and China, as well as the US’ relationship to both. However, it has done little to advance the cause of Taiwanese or their fight for a place in the world community.

  The TRA anniversary is a good time to reflect on the status of trilateral relations. The US, like most countries, is unsure just how well it can overcome the challenges facing the economy. China has a different economy in many ways, but it has as many concerns. Taiwan is in an especially difficult position given the political infighting, a sinking economy, few diplomatic allies and a huge country that wants to absorb it.

  The new administration of US President Barack Obama has undertaken enormous efforts to repair the world’s largest economy, as well as working with many other governments to assist them in fixing their problems. Obama at the same time is working to strengthen understanding with other world leaders. However, this is not the case with regard to Taiwan, with many senior State Department officials trying to avoid or circumvent the issue.

  During a visit to Taipei last month, American Institute in Taiwan Chairman Raymond Burghardt reiterated US support for Taiwan, but said that the level of cross-strait engagement should be decided by Taiwan and China. Washington will support Taiwan whenever it can in international bodies, he said, but would not mediate between the two sides. He added that military dialogue between Taiwan and the US would continue.

  With the administration of President Ma Ying-jeou (馬英九) favoring closer ties with China, relations between the US, China and Taiwan have changed.

  Taiwan and China are considering signing a cooperation agreement — initially called the comprehensive economic cooperation agreement, or CECA. However, as the name was closely associated with the Closer Economic Partnership Arrangement between Hong Kong and China, it drew strong public resistance. The Ma government then decided to change the name to economic cooperation framework agreement (ECFA).

  The ECFA continues to be a controversial issue in Taiwan. Terms for such an agreement are still unclear, but the main objective is to facilitate the movement of goods, services and capital across the Strait.

  While the Ma administration has admitted that Taiwan has been in contact with China on the subject, it has refrained from revealing too many details for fear of jeopardizing upcoming cross-strait talks between Straits Exchange Foundation (SEF) Chairman Chiang Pin-kung (江丙坤) and Association for Relations Across the Taiwan Strait Chairman Chen Yunlin (陳雲林).

  Such admissions have raised eyebrows because proper procedures have been ignored. Normally, after having completed the consultation and evaluation process with the public and industry, the result is supposed to be submitted to the Legislative Yuan before actual discussion with China begins.

  The Democratic Progressive Party has accused the Chinese Nationalist Party (KMT) of conducting secret meetings with China and demanded openness and transparency during negotiations with China on any trade agreement.

  The Ma government has stated repeatedly that signing an EFCA with China is vital to Taiwan’s competitiveness in the world market and that failing to do so would result in Taiwan being marginalized when China and ASEAN forms a trade bloc next year. The government, however, overlooks the fact that China has tried in every way to block Taiwan’s efforts to sign free-trade agreements with other countries.

  The Ma administration has also said that signing an ECFA would normalize cross-strait trade relations and raise Taiwan’s GDP growth by 1.37 percent. The Mainland Affairs Council has not yet authorized the SEF to negotiate with China on signing an EFCA. Furthermore, the Ma administration has not presented the basis for its projected growth findings.

  The opposition in Taiwan charges that entering such an agreement with China may only be beneficial to select, big industries, including electronics, petrochemicals, machinery and automobile parts, but detrimental to small industries and will ultimately increase unemployment in Taiwan. Some experts estimate that the Taiwanese economy could lose at least 120,000 jobs, especially when Beijing insists on its “one China” political framework.

  January figures showed that Taiwan’s trade surplus decreased 57 percent from a year ago, the lowest in eight years. Except for ships, boats and floating structures, all exports to China, especially optical products, organic chemicals, electrical machinery and copper products, were affected by the global economic downturn.

  The ECFA issue in Taiwan is still not clear. Many Taiwanese are looking to the US — especially Congress — for support. Chinese President Hu Jintao (胡錦濤) insists that Beijing is willing to negotiate with Taiwan on joining international organizations as long as it does not support “two Chinas” or “one China, one Taiwan.”

  However, one wonders whether it is wise to tie Taiwan’s economy to what is now a faltering export-driven economy in China. Another question is whether the US Congress might seek to restrict trade with its largest importer and perhaps work for some gains for Taiwan in terms of recognition in the international community.

  Nat Bellocchi is a former chairman of the American Institute in Taiwan and a special adviser to the Liberty Times Group. The views expressed in this article are his own.
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