ECFA Round up

Negotiations for the framework for economic cooperation (ECFA) between China and Taiwan -- or more accurately, the KMT and the CPP -- is driving all sorts of domestic political action here in Taiwan...

President Ma laid out the priorities the other day in a China Times interview:

President Ma pointed out that the Legislative Yuan already had a mechanism to oversee cross-Strait affairs, for instance, the legislative Interior Committee. If the matter also involves economic and financial issues, a joint meeting of the Interior, Finance, and Economics Committees could solve the problem, said President Ma.

In addition, President Ma said that Article 5 of the Statute Governing Relations between People across the Taiwan Strait clearly stipulated what should be referred to the Legislative Yuan for review and how it should be reviewed.

“There already is a mechanism for supervision and review. Why should we change it when it works just fine?” asked President Ma.

When asked when both sides of the Strait would kick off negotiations on military confidence-building measures, President Ma merely said that it was a very complicated matter and that the government maintained a very cautious attitude toward the issue.

President Ma stressed that normalizing economic relations was a top priority for cross-Strait relations and that currently both sides agreed not to touch upon political issues because there were still many economic issues that needed to be addressed over the next three or four years.

Note that President, consistent with previous assertions, is struggling to keep the ECFA agreement away from democratic political oversight -- this time by arguing that such oversight is already in place (similarly here). The KMT has been arguing, based on polls by the Mainland Affairs Council (MAC), that the public supports ECFA -- another argument against democratic oversight (the public already supports it, see?). But today the DPP came out with the counterclaim that the MAC polls give too rosy a picture of public support:

DPP Legislator Kuan Bi-ling (管碧玲) told a press conference the MAC had employed the Berkeley polling company to conduct surveys related to cross-strait affairs and that the poll found that 70 percent of the public supported the ECFA proposal, much higher than polls released by various news media and other bureaus.

She also said the Executive Yuan’s Research, Development and Evaluation Commission and Berkeley had both conducted earlier polls in November on the results of the second round of cross-strait negotiations between the Straits Exchange Foundation and China’s Association for Relations Across the Taiwan Strait, and that while the commission’s survey showed 67 percent of the public was satisfied with the results of the talks, Berkeley’s survey showed an 80 percent approval rate.

She said the support rates in the two polls were about double the figures other agencies came up with.

Kuan said Berkeley used loaded questions in the survey, such as: “The second round of cross-strait talks established direct cross-strait charter flights, which save time and money for people traveling to China; are you satisfied with the result?”

This coincided with a Taiwan Solidarity Union (TSU) which claimed that 59.7 percent of respondents agreed an ECFA should be approved by a referendum, while 73.7 percent supported an inter-party legislative task force to monitor the government’s cross-strait policies and interactions with China.

The DPP has a strong point. Echo Taiwan ran down a pro-Green Liberty Times poll last month:

But this time, the people might not cut him a slack. The aforementioned poll shows that as much as 89.2% think that the ECFA should be discussed and monitored by LY before it is signed. This high rate is non-partisan -- even 88% of pro-blue supporters disagree with Ma's tactic.

On the ECFA referendum issue, the poll result also slaps Ma on the face -- 63.5 % think that the ECFA should be decided by a referendum.

But in case you think that is merely the outcome of a Green poll, Letters from Taiwan ran down a poll from TVBS, the Hong Kong Chinese-owned station that froths at the mouth for the Blues. It noted:

1. Do you support that the Ma Ying-jeou government’s plan to sign an “Economic Cooperation Framework Agreement” (CECA) with Mainland China?

February 25, 2009
Yes 29% --- No 32% --- No Opinion 39%

March 11, 2009
Yes 29% --- No 31% --- No opinion 41%

3. Do you have the confidence that the Ma Ying-jeou government will be able to safeguard Taiwan’s interest when signing an ECFA with Mainland China?

Yes 35% --- No 44% --- No opinion 22%

4. Do you think that the Ma Ying-jeou government has clearly explained to the people the content of ECFA and its direction?

Yes 7% --- No 68% --- No opinion 26%

6. Do you support holding of a referendum on the “Economic Cooperation Framework Agreement” to be held?

Yes 48% --- No 36% --- No opinion 16%

In other words -- in the pro-Blue TVBS poll, 48% of those polled want a referendum. The reason that the Ma government is struggling so hard to prevent submission of ECFA to democratic oversight is clear: their internal polls are probably saying the same thing -- ECFA would lose on a referendum. The DPP offered a pretty thorough critique of the effects of the proposed banking agreements the other day, one that the public appears to share:

Taiwan would only enjoy nominal equality in signing a financial agreement with China, because the terms of the agreement would be unfavorable to Taiwan in substance, he said.

Take banking for instance, Taiwanese banks would find it hard to compete with their much bigger Chinese counterparts, he said.

A Taiwanese bank might be able to establish five branches in China, but it would still be at a disadvantage compared with a Chinese bank that has 10,000 branches nationwide, Chen said.

It would still be easier for Taiwanese businesspeople to deal with Chinese banks than Taiwanese ones, he said.

Chen added that once cross-strait banking was allowed, Chinese banks would be able to access Taiwanese individuals and companies' financial data through the domestic Joint Credit Information Center and track whether they had been wiring money back to Taiwan.

Kenneth Lin (林向愷), an economics professor at National Taiwan University, said the main objective of Chinese businesses in investing in Taiwan would be to gain access to high-tech companies and acquire key technologies.

This would allow Chinese businesses to produce knock-offs in China that would hurt Taiwan's high-tech industries, Lin said.

He added that Chinese businesses were also interested in investing in Taiwan's public construction projects.

Winning these construction bids would give them control over local contractors, which are often key political power bases in Taiwan, he said.

It's a basic understanding of competitive strategy that if I can compete in your home base but you cannot compete in mine, I will win. See history of Japanese corporations vs US corporations for a good example. It goes without saying that whatever agreements are made, the Chinese will not adhere to them on their own side of the Strait, but will demand that Taiwan follow them to the letter on this side. And of course, China will demand ECFA be made under the One China claim, one the public here consistently rejects (see polls referenced above). An ECFA financial agreement will probably be a disaster for the island, given the disparity in competitive strength between China's gigantic, state-backed banks and Taiwan's public and private banks.

The Administration has been demanding that the public swing behind ECFA to "save" Taiwan's economy. "Saving the economy" was the reason that Ma got into power; the public is not likely to buy that line again. In addition to struggling against public oversight, Ma is also conducting internecine combat against other powerful KMT members, such as Lien Chan, for control of Taiwan's China policy. Although he has his people in certain positions, such as MAC and the National Security Council, run by high school classmate Su Chi, he has little control over China policy because he has little control over the KMT. Thus, the recent talk of him making a move for the Chairmanship -- as Chairman he would vastly enhance his power, perhaps even enough to wrench control of China policy. It will be interesting to watch how the power struggle plays out.

Some kind of ECFA is highly probable, because, as the KMT says, other nations are waiting on an agreement with China before they will award Taiwan FTAs. I have also heard that from other sources. This weekend the KMT and CCP are meeting in Nanjing -- the former ROC capital....

_______
DAILY LINKS:

• Jackie Chan booted as Deafolympics host -- hiliariously says remarks meant only Taiwan's entertainment industry.
• In Taiwan, med students honor cadavers
• Richard Bush, former AIT head, with some very interesting insights into the TRA

_______________________
[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums!