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US academic questions ROC prosperity sans China pact

TAIPEI, Taiwan -- A U.S.-based scholar said Taiwan's chances for growth will be limited if it skips out on the opportunity for economic integration, including the hotly debated trade-in-services pact with China.

“Taiwan's demonstrators occupied its legislature to resist a new trade bill with the mainland. Could Taiwan thrive without these trade deals?” asked Dan Steinbock, research director of international business at the U.S.-based India, China, and America Institute in an article dated March 31.

Steinbock, who is also a visiting fellow at the Shanghai Institutes for International Studies and the EU Center (Singapore), argued that China and Hong Kong accounted for more than 40 percent of Taiwan's exports in 2012.

Without the two, Taiwan's export-led growth would collapse, he argued in the article, titled “Time to couple Taiwan's export-led growth with regional integration.”

He called the services pact is a “vital follow-up” to the Economic Cooperation Framework Agreement (ECFA) Taiwan and China signed in 2010, which cut tariffs and other barriers to boost bilateral trade to US$197 billion in 2013, according to the article.

Services are vital to the more advanced stages of development, making the pact to remove investment barriers in Taiwan's and China's service sectors all the more important for boosting Taiwan's competitiveness, he argued.

Beyond the China market, the pact “paves (the) way for Taiwan's further economic integration in Asia, which is critical to its future,” Steinbock said.

“In the past, Taiwan's rapid growth relied on globalization. Today it must thrive with regionalization,” the scholar wrote, highlighting intensifying regional integration such as talks for the U.S.-backed Trans-Pacific Partnership and bilateral free-trade deals between Asian countries and the European Union.

But “political uncertainty has increased with the trade pact debacle,” he noted, referring to the aggressive resistance to the pact that has seen student-led protesters occupy the Legislature since March 18.

In an effort to end the standoff between the administration and protesters as well as the one between the ruling Kuomintang and the Democratic Progressive Party, President Ma Ying-jeou has conceded to a draft law that will lend closer scrutiny to agreements signed with China — a move that Steinbock called into question.

“President Ma gave in to demands to increase scrutiny of future pacts signed with the mainland... The anti-climax did not bring closure to the trade friction, but more uncertainty to Taiwan.”

The scholar stressed the need for a political consensus to support growth, adding that “political determination without sufficient economic growth will result in stagnation.”

Taiwan's future growth “requires trade pacts with the mainland, the emerging Asia (sic) and the rest of the world,” he noted.

April 7, 2014    kingsolomon@
The problem is acceding to the DPP's students’ stupid demands while being held hostage. these overnight "experts" of economics dictated to the hijacked government their wants just to make the government look very stupid to the whole world and when the results of these stupid "experts" bear fruits of economic hardships to the people they would blame it to this administration's actions providing ample ammunition for annihilating the government in the coming elections. The DPP'S dirty tactics has never changed, and it gave them power for eight long chaotic years in power resulting in economic isolation and stagnation. The DPP believes they can fool all the people every time, but voting time will let the DPP know the percentage of foolish people that they get to brainwash.
April 7, 2014    nuttyazn@
“Time to couple Taiwan's export-led growth with regional integration.”
Does not mean the PRC only.
Taiwan's exports to the PRC is 95% Components, Parts and Accessories not Finished goods. If Taiwan reduces these exports, the Quality of PRC merchandise will return to being crap. While the costs will go up for MIT Products, Taiwan will be able to control the situation with the PRC better and Taiwan can increase development in ASEAN
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