Understand ECFA, the proposed economic agreement between China and Taiwan

On July 8, 2009, the Chair of Taiwan Think Tank (www Taiwanthinktank.org), Prof. Pochih Chen gave a talk in TaiwanACenter of North California. The topic is “Understand the impacts of ECFA and how to deal with them”.. In the beginning of the speech, Professor Chen spoke about in the typical propaganda used regularly by K M T and blue media; such as "DPP locks up (isolate) our country", " Only KMT has talents in economy", " Taiwan's only hope is on China", and more. KMT's propaganda said again, according to its polls, Taiwan's public order and safety was the worst during DPP administration. However, K M T did not include in its polls the top three crimes - homicide, kidnaps, and rapes. As a matter of fact, these three top crimes during DPP administration decreased 50%; while they were all time high when Ma was the head of Judicial Ministry.

Professor Chen said: KMT announced that after the "Three Direct Links", Taiwan's economy has still not improved. So there's a need to sign ECFA, an agreement on economic cooperation across the Taiwan Strait. However, the contents of the C F A are not disclosed and, worse of all; it is in the wrong frame work.

Taiwan and China are both members of WTA (World Trade Association). According to WTA, the relationship between members should be equal, and there is a rule of non-discrimination between members. That also means that, if Taiwan's is to sign a trade agreement with China, Taiwan is also allowed to sign trade agreements with other countries. Yet, on April 24th 2009, China announced that only sovereignty countries can sign agreements. This means that if Taiwan were truly to sign EC F A with China, afterwards, China will not allow Taiwan signing any trade agreements with any countries. This is one of the key points that the Ma administration is clearly cheating the people of Taiwan.

Additionally, the Ma administration insists that ECFA is a "separation of politics and economy ". Nevertheless, we all know that China specializes in manipulating economic means to achieve its political ends. He asked, for example, are there any Taiwanese businessmen in China supporting DPP? Any Taiwanese businessmen in China dare say anything against Chinese government? The case of the formal president of Chi May Company is typical and well-known. The French president met with Dali Lama. Then the Chinese government immediately canceled the orders of French Airbus airplanes. After the French protested in Paris against Chinese Olympic torch relay, the Chinese government ordered their people not to travel to France for tour.

Professor Chen said, the closer Taiwan's economy is to China, the more control Taiwan will be under the Chinese. Taiwanese businessmen think they are using China to make money. However, the more you rely on China to make money, the more and worse control China has over you. He made an example: in the beginning the Taiwanese Textile industry went to China. Then, afterwards, its upstream suppliers slowly and completely moved to China. There seemed no mistakes in each single step. Nevertheless, continuing the path ones after another, something had gone very wrong. This is the so-called “Path Dependency". (For further information please google Path Dependency, or reference the following links: http://eh.net/encyclopedia/article/puffert.path.dependence ; http://www.utdallas.edu/~liebowit/palgrave/palpd.html )

Professor Chen briefly explained the business and trade development in Taiwan and the world: before the 1980's, the word trend helped Taiwan's exporting business, therefore, Taiwan's economical growth. Taiwan's cheaper labor and Taiwanese businessmen's quick thinking and business dealing definitely contributed to Taiwan’s economic prosperity. The most important issue is, there was an era that the developed countries did not do trade with Communist countries. However, after the 1980's the Communist countries such as China entered world trade businesses. That changed the entire landscaping of international trade business.

Professor Chen thinks the more frequent and convenient trade got between two countries, the closer the wages of the same skill will get between them. An example was that, there are two buckets of water, one with higher water level and one lower. If no connection, the water levels will remain the same. However, it is impossible not to have any exchange, in today’s globalization. The key is in the connecting water tube, the thing the better.

Professor Chen thinks, it is effective for the people of Taiwan to go on street to protest against ECFA. The Taiwanese people should stand up and speak for themselves.

When answering the question of " the intention of Ma being intentional or naive", Professor Chen emphasizes: Taiwan got to sign economical agreements with countries other than China (not just China). But, in the meantime, government should compensate the industry's that will be harmed (by the trade and economical agreements).

It's very clear that the Ma administration is lying with an open eye when it said that “if Taiwan were to sign ECFA, then other countries will follow suit wanting to sign economical agreements with Taiwan”. On April 24^th, 2009, China said clearly that it will not allow Taiwan to sign any economic our agreements with other countries. Professor Chen suggested, Taiwan should first sign economic agreements with countries like Japan and the U.S., and then it may sign an economic agreement with China.