Mon, Jul 11, 2016 page3

• INTERVIEW: Brexit referendum holds lessons for Taiwan

  Taiwan’s first representative to the WTO, Yen Ching-chang, told Liberty Times (sister newspaper of the the Taipei Times) reporter Cheng Chi-fang that the UK’s vote to leave the EU should be cause to reflect on Taiwan’s approach to regional economic integration, and it is time to drop the ECFA in favor of the Trans-Pacific Partnership

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  Liberty Times (LT): Was the Brexit result influenced by the history of the UK’s participation in efforts to forge a pan-European identity?

  Yen Ching-chang (顏慶章): There is of course a connection between the decision for Brexit and the UK’s decision to join the EU. The first person to call for the establishment of a pan-European identity or organization was actually former British prime minister Winston Churchill [sic], who called for a “United States of Europe” in September 1946.

  Churchill’s call was based on the hope that Europe, heavily damaged by two consecutive world wars, would be able to put its unhappy history behind it. Despite Churchill’s call, the UK never thought that it should be a part of such an organization.

  

  Taiwan’s first representative to the WTO, Yen Ching-chang, pauses for a moment during in an interview on July 1 in Taipei.

  Photo: Wang Yi-sung, Taipei Times

  The first stage of realizing the move was the formation of the European Economic Community (EEC) in 1957, which the UK did not join until 1973.

  Barely two years later, the UK called for a referendum to back out of the EEC. Despite the failure of the referendum, the act highlighted the UK’s attitude toward the unification of Europe.

  While the Brexit vote passed, it does not bode well for either the UK or Europe. The UK should brace to make great sacrifices for its decision.

  LT: There are a slew of different analyses on the result of the Brexit vote. What are your thoughts on the matter?

  Yen: There are several key reasons the majority of voters in the UK voted for Brexit. First, the public wanted the UK to be able to make its own decisions. The EU is not a simple free-trade agreement [FTA] signed multilaterally; its influence expands to commerce, agriculture and even individual nations’ financial policies.

  Moreover, the EU compels members to use a single currency [Editor’s note: The UK had an opt-out clause allowing it not to adopt the euro. Denmark had a protocol allowing it to decide if it would do so; it did not.]

  The direct result of the UK joining the EU is that when it is making new laws or amending old ones, Brussels — the headquarters of the EU — has a large say, and UK residents think that such a large influence directly affects their sovereignty.

  This kind of view is inherently specious; any nation joining any international organization would of course have to submit to the organization’s regulations.

  Such acceptance of course influences the nation’s sovereignty, but such effects are not solely restricted to the UK. All other EU members share the same restrictions.

  Rational thought would expose the basis of the “Leave” camp to be limited to the restoration of British autonomy, which would not stand to reason.

  However, many voters accept that thinking, including the British Secretary of State for Justice Michael Gove, a “Leave” camp bigwig.

  Second, the Brexit vote was influenced by the problem of immigration. Over the course of one year, the UK received more than 300,000 immigrants and popular belief is that these new arrivals are taking job opportunities from UK citizens. As the immigrants usually tackle manual labor or tertiary-sector jobs, middle-class to blue-collar workers are the most affected.

  Some say that the Brexit vote was not an issue of the UK exiting the EU, but was in fact packaging to deliver the core message that the UK should be anti-immigrant, which begs the question whether Brexit would actually help control its immigrant population.

  There might be some benefits, but ultimately the immigrant situation cannot be completely controlled. Over the long term, such an issue would of course cause severe dissatisfaction among the people who voted to leave, and this is not a good thing for the UK.

  Another compelling argument raised by the “Leave” camp was the large amount of money the UK has to pay the EU on an annual basis. The “Leave” camp said that if the UK was not part of the EU, the money — which tallies up to a significant amount of the UK government budget — would be put to better use within the UK itself.

  However, the success of the EU is that it is an organization founded and established democratically, and the organization respects each of its member nations. The size of the nation, and its relative political power, is not factored in when the organization deals with its members.

  Hence, there are 24 official languages in use in the 28-member EU and the simultaneous translation of all documents has in fact increased the organization’s running costs.

  LT: Is the UK’s Brexit referendum legally binding? What are the uncertainties that might affect the formal process of the UK’s exit from the EU?

  Yen: The UK has an uncodified constitution and it was obliged to pass domestic legislation to prepare for its 1973 integration with Europe. In 1972, the UK parliament ratified the European Communities Act authorizing the UK’s entry to the EEC and the act remains in legal effect.

  However, Brexit is not legally binding on the parliament and to leave the EU, parliament must abolish the 1972 [European Communities] act, then authorize the prime minister to negotiate with the EU to leave Europe. How that is to unfold in parliament is still uncertain.

  If the referendum had a higher voter participation and a substantial electoral margin, parliament would have been hard-pressed to disagree with its result. However, voter participation was estimated at 72 percent, with 51.9 percent [for “Leave”] against 48.1 percent [for “Remain”], or a total margin of about 600,000 votes.

  Therefore, almost as soon as the referendum was over, some voters begin to demand a second referendum, with some who voted to leave backing the call.

  I do not believe the [proposed] second referendum is the important issue; the point is the referendum’s electoral margin was small and the parliament might prove reluctant to give consent, which is to impose difficulties on the abolition of the 1972 act that is supposed to follow.

  In addition, a majority of EU member states are extremely unhappy with the UK’s actions, and demand it make good on its rhetoric and initiate the exit proceedings as soon as possible.

  According to the Lisbon Treaty, a member state has two years to negotiate terms for leaving; if negotiations fail to conclude by the two-year deadline, the member state’s relations with the EU are to be totally severed.

  However, the EU is deeply integrated in trade, agriculture and fiscal arrangements and there were prior proposals to form an integrated diplomatic strategy.

  The UK’s exit from the EU is fraught with difficulties, making the two-year limit on the negotiations a tall order to fulfill.

  Hence, uncertainties are likely to delay the proceedings for a period of time, affecting the performance of global financial markets to the detriment of world economic growth.

  LT: What are the lessons for Taiwan in Brexit?

  Yen: The issue has several facets. Taiwan’s over-reliance on the Chinese market is intrinsically linked to the administration of [former president] Ma Ying-jeou (馬英九) signing of the Economic Cooperation Framework Agreement (ECFA), which at the time was touted as “ASEAN+1.”

  There are some in this nation who identified ASEAN+1 as the EU of East Asia and argued that Taiwan’s absence from it would spell marginalization. As a result, they pushed to sign the ECFA with China on the grounds that it would enhance linkages with ASEAN. This is an absurd argument.

  First, ASEAN+1 is not at all analogous to the EU; throughout the EU’s evolution, the dominance of weaker members by the more powerful is studiously avoided and its policies have focused on facilitating the growth of the EU by providing assistance and subsidies to strengthen its weaker member states.

  There is no possibility whatsoever that ASEAN+1 is capable of following this path, as demonstrated by the recent territorial disputes in the South China Sea.

  The Ma administration’s ECFA policy was promoted under false premises. At the time, many argued that political controversies should be suspended to permit economic cooperation to go forward, and that political controversies would be resolved with time.

  Who can say now that the political controversies have been resolved?

  Furthermore, one of the rationales of Brexit proponents was that leaving would restore national sovereignty. This seemingly correct argument is erroneous in their case, but Taiwan would do well to consider its implications.

  No EU member state was denied nationhood, subjected to unequal political status, or has made threats of annexation to another member state. Yet the UK felt that its sovereignty was threatened.

  Taiwan should feel the loss of its sovereignty keenly in its negotiations with China; why should we be obliged to accept unilateral losses of our sovereignty?

  An additional and important consideration is the increase in perceived economic inequality and perceived relative deprivation in general society. This trend has held true globally and contributed to anti-globalization discourse worldwide.

  For example, both [presumptive] US presidential candidates are talking about the TPP [Trans-Pacific Partnership] on the campaign trail and the European experience has proved that regional integration is not a panacea for economic growth. A nation that has not developed itself would be treated as a liability, like Greece found in its relationship with the EU.

  Nevertheless, Taiwan should pursue appropriate forms of regional integration that are necessary for national development, while exercising discretion in choosing our partners. ECFA is the wrong approach, and the TPP is the correct approach. Which is to say entering the TPP, like we once did the WTO, will involve a trading of gains with concessions.

  Prior to engaging in liberalization and globalization, it is the government’s responsibility to convince the people of their necessity, and to help the affected population to understand and to make adjustments to those realities.

  Translated by staff writers Jake Chung and Jonathan Chin
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