Don’t Let Taiwan Fall Behind, But at What Cost?

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Don’t Let Taiwan Fall Behind, But at What Cost?

Signing the Cross-Strait Services Trade Agreement (CSSTA) has massive costs for Taiwan.

The unsigned editorial in the Wall Street Journal titled “Taiwan Leaves Itself Behind,” could have been written by an official in the Ma Ying-jeou administration. That it wasn’t does not matter: Since its publication on Aug. 5, the Ma government—and the president himself—have repeatedly pointed to its content as “evidence,” wisdom from high up, that Taiwan must hurriedly sign trade agreements with China lest it be “left behind.”

There is little that is striking, or even fresh, to the Journal’s position. It regurgitates the same old “doom and gloom” that supposedly awaits Taiwan should it fail to enact the Cross-Strait Services Trade Agreement (CSSTA), signed in June last year, and a subsequent trade-in-goods agreement with Beijing: South Korea and China “plan to finalize a free-trade agreement that will give most South Korean products zero-tariff entry into the mainland.” As a result, Taiwan, we are told, will be elbowed out: “roughly 2% to 5% of all of Taiwan’s exports to China could be replaced by South Korean products,” the article says, citing the hardly disinterested Ministry of Economic Affairs.

The solution—and it is a simple one, at least according to the WSJ—is to implement the agreements so that Beijing will give Taipei the green light to enter Trans-Pacific Partnership (TPP) negotiations. “Beijing has also signalled it will lobby against Taiwan’s participation in multilateral pacts such as the Trans-Pacific Partnership if Taipei doesn’t first liberalize with China,” the editorial observes, reproducing Ma’s warnings though oddly omitting Washington’s emphatic counter that such views are wrong, that Taipei’s admission to the TPP does not go through Beijing but is rather contingent on the island restructuring its economy accordingly.

Extraordinarily, besides economic overreliance, the editorial doesn’t make a single mention of the risks that are attached to the CSSTA and other pacts with China. In fact, it argues that the key to less reliance “paradoxically runs through Beijing.” I would instead argue that the key to less reliance on China runs through market diversification and greater efforts by Taipei (through cooperation among both sides of the political aisle) to initiate the necessary changes to Taiwan’s economy so as to make it more appealing to other trade partners and investors (admittedly, doing so would require more work than the relatively “friction-free” coupling of Taiwan’s economy to that of China, which may be why so little has been done in that regard).

The editorial also gives absolutely no context to the student-led “sunflower movement,” which “stymied” ratification of the CSSTA in the spring and is part of some cabal presumably intent on placing obstacles in the way of trade and investment. The article says nothing about the dangers to Taiwan’s democracy, to freedom of expression, and to the security of its critical information that would result from signing an ill-monitored and far-reaching agreement that allows for Chinese investment in the print, translation, and telecommunications sectors, among others.

The problem with the Journal’s position, and this is not an uncommon error, is that it treats relations between Taiwan and China as if those were between two equals that recognize each other’s existence. The reason why the CSSTA and other agreements have been stalled stem not from some irrational opposition to free trade (were this the case, protests would have occurred over other such agreements), but rather because of the political ramifications of deals agreed upon between asymmetrical powers, the larger of which does not recognize the existence of Taiwan and is keen to use all the tools at its disposal to undermine a political system that it regards as anathema to the Chinese paradigm. With very few exceptions, Taiwanese are not opposed to trade liberalization, and most regard trade with China, the world’s No. 2 economy, favorably. However, by choosing to ignore the non-trade aspects of those agreements, the author betrays an intent to discredit the valid apprehensions of the many NGOs, academics, artists, and members of the general public that joined the Sunflowers to make the government commit to a policy whereby future deals with China would be properly monitored and vetted (yes, trade deals worldwide are negotiated in secret, but that doesn’t mean that this approach is proper, especially in cases when the stronger party is an irredentist authoritarian behemoth).

The question, therefore, isn’t whether to trade with China (which is inevitable) but how to ensure that by doing so a vulnerable society doesn’t see its way of life, its political institutions, unduly transformed in the process.

Equally baffling is the WSJ’s naïve belief that Beijing, having locked in Taiwan through the aforementioned agreements, would then show “goodwill” by “allowing” Taiwan to join the TPP. Given Beijing’s tendency to break its promises and its view on the “re-unification” of Taiwan as a so-called “core objective,” it is difficult to imagine that the Chinese leadership would not renege.

Skeptics could then counter with the claim that since 2008 Taiwan and China have signed more than 20 agreements and that the island’s democracy hasn’t suffered as a result. Such logic, however, assumes continuity and conveniently forgets Beijing’s strategy to deal with the “easy” (or “purely economic”) aspects of cross-strait ties before moving on to the trickier elements, such as Taiwan’s political future. It also ignores the changing context under President Xi Jinping, who has undeniably embarked on a program to overturn many of the more careful policies that characterized his predecessor’s administration. Lastly, we must keep in mind that Ma, who has made no secret of his fixation on securing his legacy (a summit with Xi is part of that dream), has less than two years left in office and cannot run for a third consecutive term. Ma is therefore running out of time, and Beijing, apprehending the outcome of the 2016 presidential election in Taiwan, might feel that it must extract as many concessions as it can before then.

All of this is left out in the WSJ editorial. Although it would be unfair to expect a detailed and nuanced discussion of the complexities of cross-strait negotiations in a piece less than 550 words long, constraints in length cannot excuse telling only half the story, especially when that half is bound to be exploited by Beijing and those in Taiwan who are pushing for the quick passage of stalled agreements.

The editorial must have felt like manna from heaven to Ma, who could not resist the temptation earlier this week to refer to it again during a press conference where he was scheduled to talk about the devastation wrought in Kaohsiung by the July 31 blasts, which killed 30 people and injured 300 (Ma dedicated about 3 minutes to the emergency before moving on to economics). If the reputable WSJ says it, it must be true, Ma tells us by dint of repetition. How odd (and selective), then, that his administration would react with such rancor and disbelief when the same newspaper ran an op-ed by this author drawing attention to the threat of Chinese espionage in Taiwan. Rather than embrace it as a piece of record, it retaliated by threatening to have the author expelled from Taiwan.