MAC fails to show how ECFA aids Taiwan

New "policy explanation" materials on the proposed "economic cooperation framework agreement" between Taiwan and the People's Republic of China released Tuesday by the Cabinet-level Mainland Affairs Council fail to respond sincerely to widespread doubts and concerns about a so-called "ECFA" raised by many economists, domestic industrial associations, labor federations, farmers groups and the opposition Democratic Progressive Party and many Taiwan citizens.
The new 12-page "Cross-Strait Economic Cooperation Framework Agreement: A Policy Explanation" and a brochure describing the proposed ECFA as "The Brick to Knock on the Door to Return to the World Stage" evidently aim to defend the "fixed policy" of the Chinese Nationalist Party (Kuomintang) government of President Ma Ying-jeou.
Instead of being "a brick to knock on the door to return to the world stage," many Taiwan citizens are deeply concerned that an ECFA will lock our economy into an "one China market," further isolate Taiwan from the world economy and undermine its economic and political autonomy, competitiveness, employment and social equity.
Unfortunately, the MAC's so-called "policy explanation" takes a key step away from rational discussion for consensus by describing the objections raised to the ECFA or CECA concepts by numerous economists, professionals and former leading government officials, including DPP Chairwoman and ex-MAC minister Tsai Ing-wen and Taiwan's first permanent representative to the WTO Yen Ching-chang, as merely "misunderstandings and even distortions."
Not surprisingly, neither the pamphlet or the brochure respond to the main doubts raised about this policy with more than slogans or outright omission.
A glaring example is the section entitled "Whom Will Benefit from ECFA Whom Will Be Hurt" that only lists how an ECFA will benefit "exports and employment," "the rights of Taiwan businesses" in China and even "weak industries" and makes no mention whatsoever of whose interests will be disadvantaged.
Actually, there are perfectly reasonable grounds for dissent from the pamphlet's prime assumptions, such as an ECFA is necessary to overcome the "the greatest challenge facing the Taiwan economy," which it identifies as "the grave threat to Taiwan's export competitiveness," and therefore its touted prescription.
The MAC prescribes an ECFA as the cure to avoid "the threat of marginalization" from the regional trade arrangements between the Association of Southeast Nations and the PRC and Japan and South Korea and the path to "turn crisis into opportunity" by consolidating the stake of Taiwan businesses in the China market, which already absorbs 40 percent of our exports and most of our offshore direct capital investment. But other professional economists believe that the greatest threat to Taiwan's export competitiveness and dynamism lies precisely in our over-exposure in the PRC economy and the resulting replacement of "Made in Taiwan" goods in international markets by cheaper products made in China by "Taiwan businesses" attracted to the PRC by a matrix of unfair competition measures, trade barriers and subsidies and artificially low production costs and wages maintained in part by state suppression of autonomous trade unions.
In this case, an ECFA would boost Taiwan investment and trade into the PRC and therefore exacerbate the decline of Taiwan's own exports, bleed even more private investment or private consumption out of our economy and leave our remaining domestic manufacturing, service and agricultural producers vulnerable to the importation of PRC unfair competition into our domestic market.
If cross-strait relations have improved as much as the MAC claims, what the KMT government should first raise with Beijing are demands for the PRC government to cease unfair subsidies and other measures aimed at inducing the transfer of Taiwan's manufacturing and service industries to the PRC as well as demanding that Beijing end the blockade that it has imposed on FTA or RTA talks between Taiwan and third countries.
However, such "controversial" items are absent from the ECFA agenda as outlined by the MAC, whose pamphlet also fails to respond to challenges to outdated "forecasts" about an ECFA's costs as well as benefits.
The MAC "policy explanation" also fails to provide any guidance on what Taiwan can do to avoid "marginalization" if the PRC fails to reciprocate Taiwan's goodwill and maintains its overt and covert blockade against our negotiating FTAs with third countries.
Even more questionable is the MAC's persistence in claiming that an EFCA "has no political preconditions" and will not "denigrate sovereignty" in the face of the ironclad declarations by PRC State Chairman Hu Jintao that any cross-strait economic cooperation will take place only under the framework of Beijing's "one China principle," which posits that Taiwan is part of the PRC.
In sum, the doubts of many Taiwan citizens on the wisdom of a ECFA and on its possible details, negotiation process and political, economic and social costs merit more than such a pollyannaish "policy explanation" in response.
The MAC and the rest of the KMT government need to do take seriously the requirement of policy transparency in a democratic and engage in serious public dialogue and debate that can lead to a genuine consensus on Taiwan's best path to ensure the revitalization of our economy.