EDITORIAL Let’s have an RP-Taiwan FTA

Talks between China and Taiwan to complete the free trade agreement between them appear to have stalled—because the negotiators are “stuck” over some “items,” Taiwan’s prime minister said in a statement.

As a result, it now doesn’t look like the two economies would not be able to conclude the agreement during this month.

Agence France-Presse quoted Taiwan’s Prime Minister Wu Den Yah saying, “We are stuck on some items as certain Taiwanese industries will lose their competitiveness without tariff reductions, but some Chinese industries are concerned about the impact.”

He also said, “The government is not certain if it can make a breakthrough in the shortest time . . . It depends on whether we can overcome the points we are stuck on.”

Wu released his statement on the eve of the third round of negotiations on the Economic Cooperation Framework Agreement (ECFA), which was held in Beijing yesterday (Sunday).

The Taiwan government had pledged to have the agreement signed this month. But Premier Wu said, “We would rather sign a good ECFA than an early one.” This echoes the hint Vice Economic Minister Lin Sheng-chung gave in May that the targeted June completion date might have to be missed because both Beijing and Taipei might find the results of the negotiations unacceptable.”

Critics and opponents of the ECFA are sure that stronger competition from China, which is inevitable once the pact is signed, will cost jobs and make Taiwan more dependent on the Communist Party-ruled mainland.

Philippine OFWs in Taiwan are also concerned that the Taiwan factories they are now working for will move to China as a result of the ECFA. These factories’ Filipino employees would then lose their jobs.

Philippine economic managers have also expressed concerns that, once the Taiwan-China ECFA goes into effect, many Taiwan investors will no longer wish to be in the Philippines. There would then be a pullout of Taiwan locators now operating in Subic.

In April, these concerns were discussed with President Arroyo by National Economic and Development Authority (Neda) director Dennis Arroyo. After that meeting, the President told reporters her administration considered the Taiwan-China ECFA a “threat” because this would lure Taiwanese investments and tourists away from the Philippines and into China.

Sign an RP-Taiwan FTA right now

The Philippine-Taiwan free trade and economic collaboration agreement, which is like the ECFA and the deal with Japan (JPEPA), is pending. Taiwan’s diplomats are eager to see it signed soonest.

Such an agreement would make Taiwan businesses more comfortable investing here, make Taiwan employers of our OFWs more considerate, and create new employment opportunities for Filipinos in Taiwan ventures.

Ambassador Donald Lee, head of the Taiwan Economic Cooperation Office in Manila, told reporters of the need for an RP-Taiwan FTA, mentioning that the Taiwan and the Philippines sides have been discussing this subject since the beginning of 2010. There is a pact on the Subic-Clark-Kaoshiung Economic Corridor.

But it covers only a limited area. The desired bilateral deal is needed to cover countrywide cooperation goals of both the Philippines and Taiwan sides.

A signed RP-Taiwan FTA would mitigate the negative impacts on the Philippines of the Taiwan-China ECFA.

WHAT OTHER PAPERS SAY

Not forgetting the poor

OF the thousands of words in Prime Minister Datuk Seri Najib Razak’s 10th Malaysia Plan speech on Thursday, the following 19 are likely to have the most meaning for 40 percent of the nation’s households: “I assure you that we will address issues of the less fortunate and free them from the poverty trap.” In spite of the main thrust of the 10MP being to transform Malaysia into a high-income economy, the poor have not been overlooked. They remain, if indirectly, integral to concepts like “economic growth,” “private sector-led economy,” “world-class infrastructure,” “cluster development” and “First World talent.” A poverty component in the planning is essential if high-speed broadband is to mean anything to those without computers or electricity supply. Being able to access a million books online means nothing to children who cannot read because they live too far away from the nearest school.

While Malaysia does not have many people under the poverty line, the bottom 40 percent—comprising 2.4 million households—are most at risk of slipping below decent living standards. The gross national income per capita for 2010 is expected to be RM26,420. The target is to raise it to RM38,850 by the end of the 10MP in 2015. This would be a good target to aim for and achieve. At present, the average Malaysian earns slightly more than RM2,000 a month—less if the top percentiles of the rich are lopped off.

And while the official poverty marker is deemed to be an income of RM700 a month, it must be noted that anyone who earns less than RM2,500 a month is exempt from paying taxes because they are not considered to be earning enough. Going by the current GNI per capita then, all of Malaysia does not meet the tax threshold.

As the world and this nation develops, identifying who is poor will become more complex, because “poor” no longer constitutes just those who are hungry or live in shacks. Poverty can thrive even in the concrete jungle; especially now that more than 70 per cent of the population lives in urban areas. The solution cannot forever be in the form of welfare handouts, though a wider and sturdier social safety net must be considered in the national effort to aid the needy. Just as the current middle-income economy is supposed to grow into a high-income one, programs for the poor should evolve in generosity and sophistication to help their beneficiaries make their own climb up. New Straits Times (Malaysia)