Long before Sunday’s debate on the proposed economic cooperation framework agreement (ECFA) with China, President Ma Ying-jeou (馬英九) argued that Taiwan cannot afford to be left out of increasing regional economic integration. Ma has made it clear that free-trade agreements (FTA) are a positive trend and that an ECFA would serve as a bridge with the region as ASEAN Plus One (China) and ASEAN Plus Three (China, Japan and South Korea) come into force.
The actual impact of FTAs with China on smaller regional economies, however, is only beginning to be understood. Still, early signs show that it might be wise to adopt a careful “go slow” approach.
A mere four months after ASEAN Plus One came into force, an FTA between six founding members of the organization and China, some sectors — such as textiles and garments, tires, steel and footwear — are already suffering in countries such as Indonesia, one of the signatories. Some garment factories in Jakarta have already gone under as a result of the flood of cheap Chinese clothing that have poured into the country. In some cases, the new competition drove down prices to such an extent that local companies were forced to sell jackets for less than they cost to make.
The chairman of Indonesia’s National Workers Union has said the trade deal could cost as many as 7 million jobs.
Representatives of the sectors that are at risk from the trade pact have called on Jakarta to renegotiate some aspects of the FTA or slow down the lowering of tariffs on certain products, calls the Indonesian government appears reluctant to act upon.
Still, if pressure from workers in Southeast Asian countries becomes strong enough as the negative effects of the asymmetrical FTA become more apparent, those governments may be compelled to turn to Beijing and ask for remedial measures. In the name of good relations and to protect its long-term trade interests, it is not impossible that Beijing would show some willingness to accommodate its smaller partners. The key reason is that all the members of ASEAN Plus One and ASEAN Plus Three are sovereign countries recognized by Beijing.
When it comes to Taiwan, however, an ECFA — which appears to be intended as a first step in the gradual implementation of a full-blown FTA — is not being negotiated between two sovereign states, since Beijing does not recognize Taiwan.
The long-term implications are worrying. Even if, as Ma has promised, short-term measures are implemented to mitigate the negative impact of an ECFA on vulnerable sectors of the economy and even if Beijing makes initial concessions on the “early harvest” list, China is far less likely to show flexibility over time. This is largely because it will look at that discontent and address it as a domestic problem rather than one between states. In other words, the mechanisms that normally apply to FTAs between sovereign states will not do so when it comes to Taiwan. Consequently, Beijing is expected to be far less amenable to renegotiation or goodwill once the pact has been signed, especially in light of cross-strait liberalization as a means to accelerate its unification strategy.
An ECFA will not solve every problem arising from regional economic liberalization and will undoubtedly create new ones. Although Ma prefers to address the matter as if it were purely a question of economics, the fact the two negotiating entities are engaged in an asymmetrical relationship economically and politically means that resolving those challenges will be all the more difficult.
Factory workers in ASEAN countries have difficult times ahead of them, but this could be far less onerous than the nightmare that Taiwanese workers in similar sectors could face five or 10 years from now.
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
If you had a vision of the future where China did not dominate the global car industry, you can kiss those dreams goodbye. That is because US President Donald Trump’s promised 25 percent tariff on auto imports takes an ax to the only bits of the emerging electric vehicle (EV) supply chain that are not already dominated by Beijing. The biggest losers when the levies take effect this week would be Japan and South Korea. They account for one-third of the cars imported into the US, and as much as two-thirds of those imported from outside North America. (Mexico and Canada, while
I have heard people equate the government’s stance on resisting forced unification with China or the conditional reinstatement of the military court system with the rise of the Nazis before World War II. The comparison is absurd. There is no meaningful parallel between the government and Nazi Germany, nor does such a mindset exist within the general public in Taiwan. It is important to remember that the German public bore some responsibility for the horrors of the Holocaust. Post-World War II Germany’s transitional justice efforts were rooted in a national reckoning and introspection. Many Jews were sent to concentration camps not