DPP: “Three Links” lacks protective measures and put Taiwan

Dec. 16, 2008 – On the second day of the roll-out of the “three links,” Democratic Progressive Party spokesman Cheng Wen-tsang, speaking on behalf on Chairwoman Tsai Ing-wen, acknowledged that the policy made cross-Strait exchanges more convenient, but it also brought risk. In the future, we must not only supervise the state of Taiwan sovereignty, but we must also keep a close eye on its economy. The DPP will now focus its supervision on whether there are any asymmetries arising from cross-Strait exchanges and if Taiwan’s economy is in danger of becoming marginalized or regressing into a tributary state.

Spokesman Cheng pointed out that supervisory and protective provisions were missing from the cross-Strait trading relationship. This kind of exchange is unequal in nature and contradicts the Ma administration’s declaration that all signs were positive. The fact is the lack of protective provisions in cross-Strait exchanges has created many victims such as farmers. Not only have Taiwanese agricultural trademarks been counterfeited in China, low cost Chinese agricultural exports are likely to be dumped upon and take over the markets in Taiwan, Europe, the U.S., and Japan. There is also a possibility that there will be an outflow of our agricultural technology, samples, and human capital towards China. Recently China has been promoting special economic zones on the west coast of the Taiwan Strait and sought to attract businessmen to agricultural parks they have established. This will lead to an outflow of Taiwan’s agricultural sector to China in the long run, so agricultural exchanges are not necessarily beneficial to Taiwan.

Taiwan’s workforce faces an even greater challenge. Spokesman Cheng stated that the relocation of the manufacturing industry to China has caused the unemployment of many workers not only in traditional manufacturing, but also the high tech industry as well. Capital can flow freely, but labor cannot. This has led to a decrease in the real wages of local workers. With direct cross-Strait exchanges, workers in all industries and sectors are in danger of becoming victims. Once local traditional manufacturing industries such as Yunlin’s towel industry, Taichung County’s luggage industry, and Changhua’s cotton sock industry relocate abroad, Taiwan’s competitive advantages will be lost and result in regional unemployment.

Spokesman Cheng went on to say that shipping and airline industries also face the same competitive threats. China has been engaging in large-scale construction of ports along its coast and developing its air freight industry. The shipping agreements that were signed did not include traffic rights within the mainland or the fifth freedom traffic rights for air freight shippers. This will most likely lead to the degrading of competitive ability of the local airline industry. Taiwan’s shipping industry was at the top worldwide at one time. Now the Chinese shipping industry with its advantage in ports may easily take Taiwan’s place.

Spokesman Cheng stressed that currently the Ma administration’s claim that there would be 3,000 Chinese tourists arriving daily was an empty promise. China’s monopolistic practices also cast doubt on whether Taiwan will see any benefits of increased tourism. So far Taiwan has not benefitted from the opening of the country to Chinese tourists. Moreover, Taiwanese businesspeople in China are also facing economic difficulties. With costs rising due to the new labor law and a decrease in exports, Taiwanese businesspeople have not seen any tangible benefits from the greater opening towards China.

Taiwan’s poultry industry also faces threats. Its annual exports had reached NT$5 billion (US$156 million). The spread of foot and mouth disease (FMD) from China has seriously damaged the local poultry industry. Spokesman Cheng stated that Taiwan is currently entering the final 2 years of its observation period to be taken off the quarantine watch list. If there is another FMD outbreak arising from Taiwan’s opening towards China and an incomplete disease inspection regime, then the day when poultry producers can begin exports again will be pushed into the distant future. From incidents involving melamine, FMD, and SARS, it can be seen that there exist extremely large public health risks in China. It is absolutely essential that we remain vigilant.

Spokesman Cheng emphasized that the three links have not only increased Taiwan’s dependence on China’s economy, Taiwan’s foreign investment flows have also slowly centered on China. China-bound investment capital in March of this year far surpassed last year’s figure. This proves that after the opening of the three links, risk will be significantly increased.

Spokesman Cheng pointed out that the passenger capacity rates on the first direct flights did not meet estimates. Cargo capacity rates also left much to be desired. Looking at current postal schedules, the claim that letters delivered in the morning will be received by afternoon is absurd. Premier Liu’s remark that fresh deliveries in the morning would make it onto the dinner table at night completely ignored issues of disease inspections. Liu’s unfulfilled promises of the benefits of the three links proves that all the Ma administration can do is offer hyped-up promises. We feel that greater convenience must also be accompanied by necessary safety measures.

Spokesman Cheng expressed that the Ma administration’s termination of the active management policy is an abandonment of responsibility. Even the most trade-friendly country will have management measures put in place. If there is a complete absence of managing trade between Taiwan and China, the result will be a complete asymmetry of economic flows which will bring about risks which Taiwan may not necessarily be able to cope with.

With regard to Ma Ying-jeou’s statement that the three links will put an end to the state of hostilities, spokesman Cheng said that if Ma Ying-jeou recognizes the People’s Republic of China (PRC), would the PRC reciprocate with a recognition of Taiwan or the Republic of China (ROC) and stop its hostile attitude? The DPP believes that a “Taiwan, China, one country on each side” policy does not have the problem of creating hostility over dividing the country. Rather, it is an issue of China’s military threat towards Taiwan and Taiwan’s claim to its sovereign status. Ma Ying-jeou’s claim that the three links would end hostilities is premature.