Thursday, 13 August 2009

False Premises On Trade Agreements


In the current public maelstrom over the ECFA there are two frequently reappearing sinkholes into which an opposition of any value risks disappearing. The first is that the ECFA is a free-trade agreement: it is no such thing. The second is that it should be rejected in a referendum as constituting a prelude to a de-facto Chinese annexation of Taiwan.

The ECFA is not a free trade agreement. It is a commitment by two governments to fashioning a series of piecemeal trade regulation agreements. There are two important implications here. First, in seeking to tie up the regulation of trade into a series of small agreements rather than establishing a general prohibition on tarriffs, the hope is that such regulatory agreements – and the indirect political power over Taiwan’s economy that they create – will be more time-consuming and difficult to undo by any future Taiwanese government. It is a smart play, although thoroughly reprehensible. Second, in mistakenly characterising the ECFA as some form of bastardised free-trade agreement, its’ opponents risk further public discrediting of the one political arrangement which could actually raise living standards whilst not violating the principle of the sovereign and free individual human being – free trade.

A rejection of the ECFA in a referendum begs the question of what else to do instead. Whatever its’ faults, the ECFA is at least one answer to the very real question of how to ensure Taiwan’s continued position as an export economy in the future. To sit around on the island putting up protectionist fences against certain Chinese and South East Asian imports would be even worse since it would invite retaliatory measures by those governments against Taiwan. A campaign to establish actual FTAs with China and other countries in the region would be far better, although somewhat fanciful since it is politically unpallatable to socialists and democrats everywhere.

What is missing in order to create real hope for Taiwan as a country of rich and free people is the clear recognition of government, of whatever stripe, as an immoral and dangerous impediment to individual freedom and prosperity and the courage to fight for this against the odds.

Yours sincerely,

Michael Fagan

(Sent: Thursday August 6th 2009. Published in the Taipei Times: Monday August 10th 2009)