Taiwan President's Views On Trade Pact With China

Taiwan President's Views On Trade Pact With Mainland China

Excerpts of the Televised Debate on the Cross-strait ECFA
April 25, 2010

Highlights of remarks by President Ma Ying-jeou

Over the past decade, the number of free-trade agreements (FTA) signed that involve Asian nations has skyrocketed from just three in 2000 to 58 in 2009, an increase of 19-fold. Over the next 10 years, a free-trade zone incorporating 17 nations and areas with a population of 3.3 billion and a GDP of over US$14 trillion is likely to emerge in Asia.

Trade is Taiwan’s lifeblood: without trade, Taiwan cannot subsist. During its eight years in power, the Democratic Progressive Party (DPP) isolated Taiwan from the rest of the world, gradually marginalizing the country. From being the 14th-largest trading nation, we fell to become the 18th. We simply cannot wait any longer. I vow to lead Taiwan into a “golden decade” that will reinvigorate our economy and make us the leader of the four “Asian Tigers.”

The economic cooperation framework agreement, or ECFA, consists of three main elements: The first is the reduction and elimination of tariffs. With the signing of the ECFA, items shipped from Taiwan to mainland China will no longer be subject to high tariffs. This is bound to spur exports. The second is the implementation of investment protections. Taiwan’s investments in the mainland have reached an estimated NT$200 billion and require protection. The third is the protection of Taiwan’s intellectual property rights and the prevention of piracy.

The two sides have already reached consensus that, under the ECFA, the number of mainland agricultural items allowed to be imported to Taiwan will not increase and that Taiwan will not be opened up to mainland laborers. Additionally, Taiwan will allow the import of mainland products only under the condition that they do not damage Taiwan’s disadvantaged traditional industries. After the signing of the ECFA, exports are certain to climb and Taiwan’s businesspeople will be more willing to redirect their investments back to Taiwan. This, in turn, will increase the number of job opportunities and lower unemployment. Signing the ECFA, therefore, would be extremely beneficial to Taiwan.

The ECFA is a framework agreement under which we will first ink an agreement on an “early harvest” list covering only a small number of items. Not everything will be completed at this stage; rather we will pursue steady progress toward further agreements adhering to the principles of dignity, equity and reciprocity. In this way, potential impediments to trade can be removed. However, the DPP has frightened our people by first stating that 3.21 million white-collar jobs would be affected thanks to the ECFA, and then, five days later, by boosting this number further to 5.9 million. I solemnly declare that if we find that the agreement would not be beneficial to Taiwan, we are prepared to accept a failed negotiation process. We will spare no effort to defend the sovereignty of the Republic of China (ROC) and the dignity of Taiwan. Our stance on this will never change, whether in this or in future negotiations.

In dealing with globalization, we must rise to challenges and create opportunities. Fear cannot save, and shrinking back can only smother, Taiwan. Should we turn our backs on the world, the world will turn its back on us. I believe that signing the ECFA with the mainland is a necessary and pressing issue. Taiwan’s people are practical, enterprising and courageous. At this critical time, I must fulfill my responsibility and lead Taiwan’s people forward so that our economy can thrive once again.

Highlights of President Ma’s conclusion

When we increase exports to mainland China, employment will increase and foreign businesses will be willing to invest in Taiwan. We want to create an environment where Taiwan can become an Asia-Pacific trade and investment hub and where we will be able to get in step with the rest of the world. In fact, many positive results will gradually be seen afterward, results that the DPP views negatively.

“Taiwan and China should engage in comprehensive dialogue to seek mutual understanding and economic cooperation, and build a peace framework so as to attain long-term peace and stability.” This was Proclamation No. 7 in the DPP’s 1999 “Resolutions on Taiwan’s Future,” the background of which is very similar to our wanting to sign an ECFA. The key is that we can do it and boost Taiwan’s competitiveness via mutual reciprocity in trade and investment. The DPP cannot do it. Simply put, the DPP can only make empty talk about it while the Kuomintang can actually do it.

We must engage the world, and through signing the ECFA, we can transform Taiwan into an Asia-Pacific trade and investment hub. An increase of foreign investment will better enable Taiwan to serve as the world’s information technology center and operating headquarters for Taiwanese and foreign businesses. This is what Taiwan should do. Tariffs are only a small part of the picture. Inward foreign investment, development of the service sector and protection of intellectual property rights are equally weighty concerns.

Fear can only harm Taiwan, while courage can save Taiwan. Over the past decade, our biggest trade competitor, South Korea, has signed free-trade agreements with the United States, Japan, India and the Association of Southeast Asian Nations. After we began talks with mainland China on the ECFA, [South Korean] President Lee Myung-bak convened an emergency economic policy conference at Cheong Wa Dae [the Blue House] and demanded that the South Korean government sign an FTA with mainland China as soon as possible. How long must we wait? How long can we wait? This is Taiwan’s greatest challenge, and one we cannot ignore.

Therefore, I want to upgrade our government’s FTA task force and personally lead it to expedite negotiations with the ROC’s most important trading partners on signing free-trade agreements. Trade is Taiwan’s lifeblood. Both Taiwan and mainland China are members of the World Trade Organization (WTO). Signing free-trade agreements not only is the right of all WTO members, but also is an opportunity for Taiwan to develop its economy and trade. I call upon the mainland Chinese authorities to not obstruct our concerted efforts to sign free-trade agreements with our major trading partners.

Let us unite. I hope that in these times of enormous change that Taiwan faces, we can trust Taiwan, identify with Taiwan and support Taiwan. Over the next 10 years, once we have signed an ECFA, our economic conditions will improve, foreign investment will grow and job opportunities will increase. We are of course aware of the political ambitions of mainland China toward us during this period, but we cannot let this make us afraid, pull back or avoid trying to move forward. We have confidence in Taiwan, in Taiwan businesses and in Taiwan’s democracy. Nothing ventured, nothing gained. We must take the plunge in order to attain success.

END

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