Convincing voters who remember the debate over the cross-strait service trade agreement a decade ago, as well as the flaws in the legislative process surrounding it at the time, will be difficult. They still remember academics and mainstream media warning of doom and gloom if the agreement were not signed.
In February 2014, Ku Ying-hua (顧瑩華), then-director of the Chung-Hua Institution for Economic Research’s (CIER) Regional Development Study Center, published an article saying that Taiwan would be “finished” within 10 years if China and South Korea signed a free-trade agreement (FTA).
South Korea had not even started negotiations until 2012, but it quickly came up with the English version of an FTA with China, and the official signing was just around the corner.
The Legislative Yuan approved the Economic Cooperation Framework Agreement (ECFA) in August 2010, and was still debating the service trade agreement and goods trade agreement. Ku believed that the day would come when South Korean products faced zero tariffs in China, when they would replace Taiwanese products. Taiwanese companies would not wait for this to happen and would relocate overseas before it did. According to this analysis, Taiwan had one or two decades before its economy was ruined.
Lin Chien-fu (林建甫) of National Taiwan University’s Department of Economics was also worried that if the China-South Korea FTA came into effect by 2015, and the cross-strait service trade agreement under the ECFA was still pending, it would be like an “atomic bomb” for Taiwan’s economy.
During an interview published in Global Views Monthly’s February 2014 issue, CIER vice president Wang Jiann-chyuan (王健全) said that if Taiwan could not ensure regional integration, salaries for young people would stagnate at NT$22,000, and the best that they could hope for would be that they would not drop within five years.
Finally, then-National Development Council minister Kuan Chung-ming (管中閔在) said the government had forecast in 2000 that South Korea’s trade volume would be about 1.3 times Taiwan’s by 2012, but that the actual ratio was 1.9 times. By extrapolation, South Korea’s trade volume could be three times higher than Taiwan’s by 2025, and that was without taking into account the Regional Comprehensive Economic Partnership and China-Japan-South Korea FTAs, Kuan said.
These forecasts are easy to test. Today, the basic monthly wage in Taiwan has exceeded NT$22,000, and has neither stagnated nor fallen in the past five years. Plus, South Korea’s trade volume reached a record high of US$1.415 trillion last year, which was almost 1.6 times Taiwan’s trade volume of US$0.9075 trillion, instead of the huge differential of 1.9 to three times predicted by Kuan — and has been shrinking.
The ECFA had been one of former president Ma Ying-jeou’s (馬英九) campaign promises, so he needed to implement it, but suspected that then-legislative speaker Wang Jin-pyng (王金平) tried to delay its passage. This is why Ma wanted to rush the service trade agreement through without review, sparking the 2014 Sunflower movement.
Taiwan People’s Party Chairman and presidential candidate Ko Wen-je (柯文哲) is revisiting the issue to attract deep-blue supporters, and also to show young voters too young to remember the Chinese Nationalist Party’s (KMT) egregious handling of the legislative process.
As the Democratic Progressive Party is not talking about the issue, Ko can portray himself as being no slave to ideology, while also expressing his goodwill to China. He is essentially killing four birds with one stone.
Wu Hai-ruei is a manager at a listed company.
Translated by Eddy Chang
US President Donald Trump has gotten off to a head-spinning start in his foreign policy. He has pressured Denmark to cede Greenland to the United States, threatened to take over the Panama Canal, urged Canada to become the 51st US state, unilaterally renamed the Gulf of Mexico to “the Gulf of America” and announced plans for the United States to annex and administer Gaza. He has imposed and then suspended 25 percent tariffs on Canada and Mexico for their roles in the flow of fentanyl into the United States, while at the same time increasing tariffs on China by 10
US President Donald Trump last week announced plans to impose reciprocal tariffs on eight countries. As Taiwan, a key hub for semiconductor manufacturing, is among them, the policy would significantly affect the country. In response, Minister of Economic Affairs J.W. Kuo (郭智輝) dispatched two officials to the US for negotiations, and Taiwan Semiconductor Manufacturing Co’s (TSMC) board of directors convened its first-ever meeting in the US. Those developments highlight how the US’ unstable trade policies are posing a growing threat to Taiwan. Can the US truly gain an advantage in chip manufacturing by reversing trade liberalization? Is it realistic to
Trying to force a partnership between Taiwan Semiconductor Manufacturing Co (TSMC) and Intel Corp would be a wildly complex ordeal. Already, the reported request from the Trump administration for TSMC to take a controlling stake in Intel’s US factories is facing valid questions about feasibility from all sides. Washington would likely not support a foreign company operating Intel’s domestic factories, Reuters reported — just look at how that is going over in the steel sector. Meanwhile, many in Taiwan are concerned about the company being forced to transfer its bleeding-edge tech capabilities and give up its strategic advantage. This is especially
Last week, 24 Republican representatives in the US Congress proposed a resolution calling for US President Donald Trump’s administration to abandon the US’ “one China” policy, calling it outdated, counterproductive and not reflective of reality, and to restore official diplomatic relations with Taiwan, enter bilateral free-trade agreement negotiations and support its entry into international organizations. That is an exciting and inspiring development. To help the US government and other nations further understand that Taiwan is not a part of China, that those “one China” policies are contrary to the fact that the two countries across the Taiwan Strait are independent and
RSS