Taiwan must not fall into PRC’s CECA trap
Taiwan News, Taipei
Taiwan must not fall into PRC’s CECA trap
By Taiwan News Staff Writer
17 February 2009
The right-wing Chinese Nationalist Party (Kuomintang) government is now preparing to literally give away the power to make or break Taiwan’s economy and officially surrender Taiwan’s sovereignty to the hostile People’s Republic of China.
This surrender may be contained in a proposed "comprehensive economic cooperation agreement" (CECA) which Mainland Affairs Council Chairwoman Lai Shin-yuan announced Sunday is now a "fixed policy" of President Ma Ying-jeou’s restored KMT government.
Lai’s statement responded to a joint demand issued Thursday by Taiwan’s six major industrial and commercial business associations for the KMT government to accelerate the signing of a CECA with Beijing to avoid being "marginalized" from the PRC market.
Although floated by Ma last April, the KMT government had appeared to treat the notion as a longer-term goal to be handled after "normalizing" direct transportation links and opening up tourism.
Without carrying out any substantive feasibility or "economic and social impact" assessment, the KMT government has already rushed into unilaterally easing regulatory firewalls on outgoing equity and portfolio investment into the PRC and plans to sign a financial services "memorandum of understanding" in the near future that would open the doors of our banking market to the PRC.
Without pausing to build a consensus in Taiwan society beyond the bounds of its "enterprise friends," the KMT now aims to step up the pace of Taiwan’s integration into the PRC economy by lowering most regulatory firewalls in industrial and agricultural trade.
Enhancing Taiwan’s economic and trade dependence on the PRC market would seem, at the very least, counter-intuitive since over 70 percent of Taiwan’s offshore equity investment and over 40 percent of our merchandise exports already go to the PRC market.
Moreover, despite the claim by Strait Exchange Foundation Chairman Chiang Ping-kun that "dependence on the China market is not a bad thing," the plunge of exports to the PRC by nearly 60 percent in January surely indicates that Taiwan economy needs to diversify export markets and adopt an employment-generating economic strategy instead of putting even more eggs into the world’s most high risk economic basket.
Sovereignty fire-sale
In addition to the questionable logic of expanding Taiwan’s already excessive exposure in the PRC economy at what appears to be the worst possible moment, the KMT government’s drive to sign a CECA contains an even more worrisome political agenda.
As noted by an editorial in the pro-KMT United Daily News on Saturday, the signing of a CECA will hammer in place a "roof" that will embrace both the PRC and Taiwan.
The UDN maintains that such a roof will neither be as "hard" such as Beijing’s "one country, two systems" formula which is unacceptable to the Taiwan people or as "soft" as a "commonwealth" or "federation" which is unacceptable to the PRC since the concept of a federation is predicated on prior recognition of the sovereignty of each participating state.
Instead, the far-right daily maintains that a CECA will be a "smart roof" since it will "only" be a "economic and trade" pact.
Such nonsense contains as much credibility as the claims by KMT officials that the "Republic of China" possesses sovereignty over the territory occupied by evidently independent states of the PRC and Mongolia.
Indeed, claims by KMT officials or mouthpieces that a CECA or even a CEPA (Closer Economic Partnership Agreement) is an "economic" agreement are exercises in deception that aims to pull the wool over the eyes of Taiwan’s 23 million citizens and are not shared by PRC leaders who realize that politics and economics are indivisible.
The dead giveaway (or horse’s leg) lies in the CECA’s concept inclusion of features such as bilateral reductions in customs duties and for the duty free entry of 90 percent of exports into each other’s market that would be exclusive to the two signatories.
Unless such concessions are simultaneously extended to all members of the World Trade Organization, to which both the PRC and Taiwan belong, under the WTO’s "most favored nation" rule, the proposed CECA will not be legally under WTO rules as a "free trade area" agreement signed between two equal states but as an arrangement between the PRC central government and a nominally "separate" but subordinate "customs area" which is under the same national roof.
A CECA is therefore only a name away from the "closer economic partnership agreements" signed between Beijing and its "special administrative regions" of Hong Kong and Macao and would absolutely not be simply an "economic and trade" agreement but a formal acknowledgement of the PRC’s sovereignty over the subordinate "special administrative region" of Taiwan, regardless of whether the KMT government continues to grasp the ROC moniker as a domestic political security blanket.
The electoral mandate received by Ma last year does not extend to the rash signing of a pact that would so obviously compromise both Taiwan’s economic future and our sovereign status.
Therefore, we believe that the KMT government must first ask for an authorizing mandate through a national citizen referendum before beginning negotiations for a CECA or CEPA.
