CECA = ECFA? Nope

Taiwan News, which has been rocking the Blue world with one excellent editorial after another (don't miss this one on Ma and 228), speaks on the transformation of CECA into ECFA:

The groundswell of doubts and even opposition to a proposed "cross-strait comprehensive economic cooperation agreement" between Taiwan and the People's Republic of China compelled President Ma Ying-jeou to shift gears from advocating a CECA as "a fixed state policy" to an intermediary "Economic Cooperation Framework Agreement" (ECFA) Friday.

Ma's revision is not merely semantic, as there is a considerable difference between a "CECA" or a free trade agreement which are governed by Article 24 of the General Agreement on Tariffs and Trade which undergirds the World Trade Organization, in which both the PRC and Taiwan (as the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu) are members.

This sudden switch from the position that a cross-strait CECA was a "fixed national policy" in the face of public criticism from ruling Chinese Nationalist Party (Kuomintang) lawmakers as well as the opposition Democratic Progressive Party and Taiwan-centered civic groups, confirmed widespread impressions that Ma (and his right-wing KMT Cabinet team) lack mature strategic thinking and only focus on technical or tactical matters and on the form of the bottle instead of its contents.

The confusion caused by the KMT government's reversal of the proper order of the process and the evident inability of KMT government officials to get on the same page has likewise demonstrated the crude and immature results of the KMT Cabinet's habit of "manufacturing carts behind closed doors."

Ironically, we wonder whether PRC State Chairman and ruling Chinese Communist Party General Secretary Hu Jintao, who called for the two sides to negotiate a "CECA" under the framework of Beijing's "one China principle," is himself disoriented by Ma's semantic policy acrobatics between CECA and ECFA.

Time to come clean

While the KMT government's internal confusion is undoubtedly worrisome and embarrassing, the gravest issue in this flap is the evident inability or, more likely, abject refusal of the Ma government to frankly discuss and thoroughly discuss the nature of an ECFA and CECA and the attendant costs and risks as well as purported benefits with Taiwan's opposition parties, diverse economic, civic and social "stakeholders" and all citizens.

The pro-Green Taiwan Thinktank hosted a forum on ECFA that pointed to all the problems of the proposed CECA Lite:

Although the ECFA with China could benefit some industries, the government has not told the public the impact it would have on other industries and on sovereignty, he told the forum yesterday hosted by the Taiwan Shadow Government think tank founded by former Democratic Progressive Party (DPP) chairman Frank Hsieh (謝長廷).

Former minister of finance and former Taiwan permanent representative to the WTO Yen Ching-chang (顏慶章) said an ECFA would be little more than a “letter of intent” with a timetable. It would be a framework for achieving a substantial free-trade agreement (FTA), but would lack any content, he said.

Yen said an ECFA would be a totally “void” pact with no immediate impact on Taiwan’s economy, contrary to what Ma has portrayed, as mutually beneficial measures such as the opening of Taiwan’s market would be necessary to achieve a substantial FTA.

Former vice premier Wu Rong-yi (吳榮義) told the forum it was strange that while China blocks Taiwan from signing any FTAs or similar pacts with other countries, it wants to ink one with Taiwan.

The premier also spoke to the legislature about ECFA the other day, but refused to provide any details. Everyone is promising that Taiwan's sovereignty will not be infringed. Yeah, right.

Note that no matter what the name or particulars of the proposal, it will be ages before anything happens. But the government and pro-Blue media have repeatedly said that the agreement must be inked as soon as possible. “We are not only signing economic agreements with China. It’s part of our global strategy. It’s very important. If we do not start doing it today, we will regret it tomorrow,” Ma has said. Yet there is no important benefit that Taiwan could get from China it does not already have, or could potentially have. For example, a framework for Chinese investment was legalized here under the DPP. The Ma government has to have something, anything, to show the deeply angry and anxious public that it is actually doing something for the economy of the island.

While Ma keeps saying that ECFA is merely a framework for agreement (not a comprehensive agreement itself) the Administration has shied away from offering anything concrete to the public, even for the "framework." Taiwan News points out that a CECA FTA is governed by the rules established under the GATT and WTO, which both Taiwan and China belong to, whereas a vague "framework" for economic cooperation might not be.

It's probably not a coincidence either that officials in China have revived the periodic call for a Cross-Strait common market.

One interesting aspect of the program is its unsettled name:

Yiin said that the pact was provisionally called an ECFA. When asked whether it sounded like an auspicious name as pronounced in Hoklo (also known as Taiwanese) — the acronym ECFA sounds like “the country will get richer” (A擱發) — Yiin said he agreed.

Pronunciation of the acronym CECA sounds like “washing feet” in Hoklo.

He said the official name of the pact in Chinese and English would not be finalized until after negotiations with China.

The sound of words is an important component of local attitudes toward luck and fate. If you travel around Taiwan and see tables of offerings to local deities, frequently the items comprising the offerings are there because their name has a sound that conveys a positive meaning related to the concrete need at hand -- for example, when asking for wealth, things that sound like "rich" or "get rich" might be offered. This principle is common in many areas of local life. When we visited the Lin Family Complex the other day, there was a doorway shaped like a vase (hwapin), because the second syllable, pin, recalls the sound of peace (ping).

UPDATE: Former WTO rep Yen has a piece analyzing the problems.

Furthermore, there are no cases thus far where members signing an FTA in accordance with Article XXIV of GATT and Article V of GATS refuse to recognize each other’s sovereignty. Not surprisingly, China’s stern refusal to recognize Taiwan’s sovereignty is widely known. Therefore, the ability of the two sides to enter into a WTO-plus relationship, culminating the signing of CECA will be a political quagmire.

REFERENCES: DPP Chairman Tsai Ing-wen's critique of CECA/ECFA.

[Taiwan]