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- 1 -Please no te tha t a rtic les in this publica tion should not b e used as direc t quotat ion unless with the explicit

pe rmission from the ed itor.

* A MONTHLY NEWSLETTER PUBLISHED BY THE DPPS DEPARTMENT OF INTERNATIONAL

AFFAIRS.

Democracy &Progress

FEBRUARY2009

Happy Lunar New Year!DEMOCRACY&PROGRESSDepartment of

International Affairs

Democratic Progressive Party

8F, No. 30, Pei-Ping East Rd.

Taipei, Taiwan

t. 886-2-23929989 ext. 306

f. 886-2-23930342

e-mail: [email protected]

web: http://www.dpp.org.tw

Director:

Lin, Chen-wei

Deputy Director:

Huang, Chih-ta

Editor-In-Chief:

Liu, Hsiaoching

Editor:

Mike Fonte

Staff Writer:

James Chen

Britt Mercadante

Six Members of the DPP Receive Top Marks in CCWEvaluation Report of the 7th Legislature (p2)

Remember the 228 Incident (p2)We can forgive historical mistakes but history must not be forgotten..., Dr. Tsaisaid.

DPP 2009 Action Plan (p3)In order to transform the DPP and lay out a 2009 action strategy, Chairperson TsaiIng-wen called for a special meeting of the DPP Central Standing Committee onFebruary 8

th

I. Dr. Tsai: 2009 Is A Social Movement Year (p3)II. Conclusion Reached By The Central Standing Committee (p4)

III.DPP Organizational Reform (p6)

IV.Financial Management and Fundraising Strategy: A Party That IsSmall Yet Beautiful And Powerful (p6)

Conclusion of the Taiwan Citizen Conference onNational Affairs (Feb. 21-22) (p7)

The Taiwan Citizens Conference on National Affairs was held on February 21-22 atthe Howard International House, Taipei. More than 300 people showed up in aconference room with only about 200 seats. Comments from panels andparticipants could be summarized in the following points

The DPP Public Survey on Taiwans Unemploymentand Economic Issues (p10)

52% of respondents disagreed with the statement: Taiwans economy is bad right

now, so we should further strengthen our economic interaction with China

Liberty Times interview with Dr. Tsai: (p12)CEPA? CECA? OR ECFA?


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Six Members of the DPP Receive

Top Marks in CCW Evaluation

Report of the 7th Legislature

On March 2, 2009, Citizen Congress Watch

released its 2nd evaluation report of the 7th

Legislature. Even though the DPP only holds 27 out

of 113 seats in the Legislature, it had six members

praised as the top performers on their respective

committees and two members received marks that

placed them second in their committees.

Committee No.1

Foreign and NationalDefense Committee Twu Shiing-jer()Judiciary and Organic

Laws and Statutes

Committee

Lu Hsueh-chang

()

Finance Committee Huang Wei-cher

()Economics Committee Pan Meng-an

()Internal Administration

Committee

Chen Chieh-ju

()Transportation Committee Yeh Yi-ching

()Education and Culture

Committee

Chiang Yi-hsiung

()Social Welfare and

Environmental Hygiene

Committee

Huang Sue-ying

() andWilliam Lai (,)

Citizen Congress Watch was founded two years

ago by a group of scholars, journalists, college

students and representatives of various civic groupsand NGOs. The objective of the CCW is to improve

the performance of the Legislative Yuan by

periodically conducting evaluations of each member

of the legislature. Using criteria such as attendance,

number of legislative proposals, quality of

interpellation and efforts made to support bills to

increase transparency in the legislature, etc., the

CCW assigns scores to lawmakers in each

legislative committee and then ranks them within

their committee.

Remember the 228 Incident

On February 27, in commemoration of the 62nd

anniversary of Taiwan's 2-28 Incident , DPP Chair Dr.Tsai Ing-wen and senior DPP officials, accompanied by

families of the 228 victims, placed flowers in 228

Memorial Peace Park to pay their respects to those who

sacrificed their lives in this tragic event.

We are here today to pay our respects to the victims of

228 and show that we have not forgotten them nor have

we forgotten our own responsibility. Our generation

must not forget those whose history is deep within our

collective memory. We also have to tell the next

generation that, even though they have no personalexperience of those dark days, together we must reflect

deeply on how the wrong attitudes and decisions by a

ruler can impact families so painfully and harm the

people. Dr. Tsai said.

It is said that we can forgive historical mistakes but

history must not be forgotten. said Tsai. However,

the precondition for forgiveness of historical mistakes is

that the person who committed the errors must sincerely

reexamine and admit the mistakes and thus seek

forgiveness and reconciliation from society.

The responsibility of any political party is to keep

harmony within Taiwanese society, prevent social

polarization, and protect democracy and freedom. After

62 years of hard work by the Taiwanese people, we now

have a real sense of community. The harmony of the

society comes from learning from each other,

empathizing with the feelings of others and

soul-searching. The DPP has to carry this out but it is

our hope that every political party, especially the rulingparty, will take this responsibility seriously, she said.


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DPP 2009 Action Plan

In order to transform the DPP and lay out a 2009 action strategy, Chairperson Tsai Ing-wen called for a

special meeting of the DPP Central Standing Committee on February 8th. Two major issues were

discussed: (1) how to become a strong and effective opposition power to provide the necessary checksand balances to the governments policies and (2) how to better connect with social powers (grassroots

and civic organizations).

I. DR. TSAI: 2009 IS A SOCIAL MOVEMENT YEAR

In the meeting, Dr. Tsai announced that 2009 is a social movement year for the DPP. She reminded

people that before the DPP took power nine years ago, the DPP had always been the engine allied with

the people to bring changes, liberal thinking and new ideas, such as democracy, human rights, womens

rights, and environmental protection to Taiwanese society. We have to revive this spirit of our party,

she said. The current KMT administration is dragging Taiwanese society back to the old,

conservative and autocratic society. We have to keep up the dynamic energy of Taiwans

democracy. The DPPs social movement year does not mean a return to being the party of

street protests. Social movement year means integrating with social powers (grassroots and

civic organizations) to breathe along with society, to think and discuss major issues and then

formulate a consensus with society.

Dr. Tsai identified the following goals:

1. The DPP has to forge links with those civic groups with progressive ideas; moreover, the DPP

will work with and learn from those NGOs and utilize their experience and energy to strengthenthe partys ideals and social responsibility.

2. The DPP will consult academics to strengthen the DPPs policy research capabilities- to make

the DPPs policy proposals more comprehensive, advanced and persuasive. By conducting

this kind of process and dialogue, we hope our policy debates and policy proposals will attract

those in the blue camp, be accepted by majority of the society and become consensus

policies.

3. The DPP must be closer to the people- regardless of ethnic background or social class- listening

to them and being sympathetic to their feelings, so that the DPP will become more open-minded,

creative and appreciative of different ways of thinking.

4. The DPP must modify its organizational structure to make it more open and accessible to social

forces so that they can enter into our discussions, our policy decision-making, into the very

backbone of our party. We will thus bring the partys thinking closer to that of the people. In other

words, we must blend those with governing experience and the social forces so that the party

might become a platform wherein we press each other forward.

In order for the DPP to achieve these goals, the first step is to rearrange the organizational structure of

the party headquarters so that it can contact and absorb wide-ranging views. We must meet with as wide

a cross-section of society as possible. We need to build a consensus around important policy issues.

We need to look beyond DPP party members when we nominate people. To accelerate reform of party


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structure, we must look to both our own experts and non-DPP personnel in order to see what is the best

form, a flexible or rigid structure; how we should run our primaries etc. The final step is the formation of

political alliances with other groups willing to protect our national sovereignty, democracy and human

rights. With this as the premise, the DPP is willing to work with any organization and political party, Dr.

Tsai added.

II. CONCLUSIONS REACHED BY THE CENTRAL STANDING COMMITTEE

FOREWORD

For some time now we have experienced a very difficult overall situation in Taiwan with rapid

political and economic changes. This has been particularly true with the three crises engendered by the

Ma administration: the national sovereignty crisis, the economic crisis and the crisis in social equality.

We are well aware that, whether for DPP supporters or for others in Taiwan society, there exists deep

anxiety and uncertainty about the future. Members of the DPP Central Standing Committee recognize

that we bear the great expectations of our people and are duty-bound to defend Taiwans sovereigntyand protect the well-being of our people.

Recognizing these hardships and the rapid-changing external environment, we have only one

choice: unify the party, forge links with civic society and push for reform. The DPP has to play a strong

and effective role as opposition party to safeguard Taiwans sovereignty, protect the rights of the

disadvantaged in our society, and stand firm on the principle of social justice. Facing the global

economic crisis, the core of our economic policy proposal would be securing employment.

2009 will be the key year for the DPP to combine with social forces, provide checks-and-balances

against the Ma government and win local elections.

ACTION GUIDELINE

The DPP will review its policy positions to establish a policy framework that better meets the

demands of today and the core values of the DPP.

The DPP will strengthen its policy decision-making mechanism to make it more effective in

selecting and initiating policies so that it have a clearer public image with both our supporters

and the general public, one that distinguishes the DPP from the ruling party.

The DPP will improve its efficiency, adjusting its organizational structure to better meet the

partys future development, enhance its interaction with voters, actively nurture local talent and

dialogue with our grassroots people. The DPP will form an alliance with social powers by establishing consultation committees

based on issues, extending our social outreach and establishing effective communication and a

platform for dialogue.

MAJOR TASKS OF THE YEAR

There are three major 2009 agenda tasks: Safeguarding Taiwans sovereignty, Playing a

constructive role in fighting economic recession and unemployment, and Winning the local elections


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I. Safeguarding Taiwans sovereignty

The DPP will renew its discussion of sovereignty to make it more closely connected to peoples

economic livelihood and survival.

The DPP will propose a comprehensive analysis and assessment of the current international

situation and develop a strategic plan on cross-strait issues; we will take the actions necessaryto provide an effective check and balance against the government to prevent the loss of

sovereignty and any roll-back of democracy.

To prevent the Ma administration from signing agreements that will be harmful to Taiwans

national interests, the DPP should continue pushing for revision of the Cross Strait Relation Act

(Act Government Relations Between People of the Taiwan Area and the Mainland Area) so

that all agreements between the Taiwanese and Chinese governments will be overseen by the

Legislature .

In response to the Ma administrations policy of leaning towards China, the DPP will initiate a

social movement calling for safeguarding Taiwan. By encouraging participation from all citizens,

regardless of their ethnic backgrounds, gender, age and political ideology, we would like to

build a consensus on cherishing Taiwans democracy and social reconciliation.

II. Playing a constructive role in fighting economic recession and unemployment

Employment initiatives will be central to the DPPs discussion of the economy and economic

policy; well seek to prevent an over-reliance on China; we will promote the energy industry and

those industries that meet domestic demand and bring a better quality of life for Taiwanese

people, such as the healthcare service industry, urban renewal, organic farming and leisure

agriculture etc.

The DPP will keep a close eye on the performance of the governments economic policy. Issues such as Economic development and employment, the social safety net, trade and

financial activity across the strait, local systems and energy and sustainable development

will be prioritized by DPP local city and county magistrates, party caucuses and think tanks.

III. "Winning the local elections

The DPP governed jurisdictions will increase their cooperation and recreate a common image

of Green Government

The DPP candidates will propose common campaign themes to gain constituent confidence in

DPP governance.

The DPP will strengthen its grassroots networking and improve DPP local chapters capacity toserve and advocate.

The DPP will establish an Internet Campaign Department to utilize Internet technology to reach

out to youth and Internet users.


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III. DPP Organizational Reform:

New Departments established:

Current name: New department:

Department of Social Development Social Movement Department

Department of Ethic Affairs Department of Hakka Affairs

Department of Indigenous Affairs

(New) Department of New Media

Consultation groups: integrate former officials, legislators, analysts and experts to form

consultation groups on election policy, social development, foreign affairs, and China policy.

IV. Financial management and fundraising strategy: A Party that is small yet

beautiful and powerful

25th DPP Central Standing Committee meeting was held on February 18 th to discuss the DPPs financial

reform, fundraising strategy and the financing of upcoming local elections.

Our future managerial guideline is to make the DPP a political party that is small yet beautiful and

powerful, DPP spokesperson Cheng Wen-tsang said. Compared to the KMT which has tremendous

party assets and resources, the DPP has never been a rich party, we are always fighting to figure out

how to best utilize our limited resources.

A. Economizing on party expenditure

Cheng said that after the DPP returned to being the opposition, the 2009 budget was adjusted: office

space was reduced from three floors to two, the staff was downsized to 107 people with five staff

persons, including the Chairperson and the Secretary General, unpaid; overtime pay was replaced by

vacation hours; and office supplies management was strengthen to reduce operating costs.

B. Fundraising responsibility for DPP public officers

As to the fundraising quota for each of the DPP members who serve as public officers, Cheng said that

the 2009 quota remains the same as last year: for the party chairperson and the financial management

committee it is ten-million NTD (about $300,000 USD), members of the DPP Central Standing

Committee have a quota of $1.5million NTD. Members of Central Review Committees quota isNT$300,000, county magistrates 1.5 million NTD, legislators NT$500,000, councilors for Taipei city or

Kaohsiung city NT$250,000.

C. Explore alternative funding source

As to fundraising, Cheng said that 2008 is the first time the DPP is trying a small contribution fundraising

campaign. People can make their contribution through credit cards, postal wire transfer service, or by

printing out the bar code from the DPP website and bringing it to any convenience store to make a cash

donation. The total amount received last year was 28 million NTD. The DPP will continue to push the

campaign this year. (For more information about small contribution fundraising campaign: please refer to


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http://www.dpp.org.tw/news_content.php?kw=&menu_sn=7&sub_menu=44&sn=3548)

Based on Taiwans political donation law:

1. Contributors have to be Taiwanese citizens.

2. Individuals annual donation to one political party cannot exceed 300,000 NTD.

Contributors name, id number, valid address, and phone numbers have to be listed.

3. Contribution less than 10,000NTD can be anonymous.

For original articles, please refer to:

http://law.moj.gov.tw/Scripts/newsdetail.asp?no=1D0020049

In addition to these small contributions, the DPP will also conduct a series of fundraising activities. Dr.

Tsai said, Public donations will still be the major funding source for the DPP. She believes that public

donations are very meaningful because public donations are not only a way to raise funds but also to

provide an opportunity to allow public participation and create a sense of ownership of the party.

Cheng said that in order to pay back the 1.8million NTD debt the DPP has, Dr. Tsai has been actively

engaged in fundraising efforts since she became the DPP chairperson and the DPP, so far, has

managed to payoff 1million NTD of the debt already. But there is still 0.8 million NTD debt to go, and we

will need more funding for the local elections at the end of this year, said Cheng, Fundraising is still our

major challenge. We will have to adjust how we get this done and maximize the use of our limited

resources. On the other hand, we learned from the news that the KMT has the capacity to provide from

0.5 up to 1 million NTD subsidies to their candidates. Like my colleague Legislator Chang Hwa-Kuan

said, This is the M society in Taiwans political landscape. Thus, we hope that the subsidy that

candidates receive from their party be regulated under the Political Party Act and Political Donation Law.

Also, we hope to amend the Political Party Act to have more clear regulations that a political party should

not make business profit out of its party assets.

Conclusion of Taiwan Citizen Conference on National

Affairs (Feb. 21-22)

The first phase of the Taiwan Citizens Conference on

National Affairs: Current Financial and Economic

Situations in Taiwan and the Impact on Social Security

was held on February 21-22 in the Howard International

House, Taipei. More than 300 people showed up in a

conference room with only about 200 seats. Four major

topics discussed in the conference were: the

unemployment problem, fiscal discipline and tax

reform, an economic rescue plan and financial

stability, and a social safety network.


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The following points summarize comments from panels and participants:

1. When the economy is underperforming, the government should place its priority on looking

after the working class. Standards defining low income households should be relaxed.

Unemployment compensation should be extended from six months to one year. Assistance for

small, medium, and micro-enterprises should be strengthened.

2. Short-term jobs created by the government

to combat unemployment should be in line

with the urgent needs of society today as

well as industrial development in the future.

Not only would they make a better

contribution to society, they would also

better link up with employment

opportunities in the future once the

economy picks up. The people want real

employment, not fake jobs.

3. The government should carry out DPP-era

policies such as promoting a knowledge

economy, cultural innovation, recreational agriculture, and service industries. Also, the

government should develop advanced, diverse, knowledge and innovation-filled emerging

industries. These domestic demand-oriented industries that can raise standards of living can

enhance national competitiveness, promote domestic industrial sector-based ties, and create

long-term employment opportunities for the future.

4. We should be reminded of the importance of community. In a period of economic decline, the

community provides security and support to the suffering. The government should quicken thepace of building up a complete social welfare structure, especially a long-term care structure

which would also create new jobs. The social welfare budget should take top priority in

increases, and the professionalism of the social welfare community should not be hijacked by

politics. We wish for the government to devote the budget and resources to build a long-term

care structure. This is also the focus of the DPP.

5. The economic crisis is not an excuse for the finance ministrys spending discipline to evaporate.

Therefore, funds for expanding investment in public projects should not be patronizing

small-scale construction. Instead, it should be used for forward-looking, economically effective

large-scale construction projects as well as assisting disadvantaged groups and providing

services for them.

6. Tax reform should be focused on the long-term tax structure. The fundamental goal is social

justice. It should not become a tool to stimulate the economy. The nation needs to maintain an

adequate tax base. The current bias towards cutting taxes for capitalists should be immediately

corrected. The minimum tax structure and taxing overseas income policies should continue to

be carried out.

7. Government finances, such as the effects of borrowing, tax cuts, corporate bailouts, and the

recession on the national coffers etc, should be more transparent and subject to monitoring.


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The government should also state how it plans to responsibly control the budget deficit.

8. Establish a complete bail-out mechanism. Pass a special bail-out law that would specify

principles, source of funding, sunset provisions, management of bail-out recipients, and

supervision of bail-out recipients. Set up a fair and impartial method of executing bail-outs with

transparent processes.

9. The central government should not exceed its boundaries and become a resource distribution

center for villages and townships, let alone use national resources for the purposes of

patronage for elections. Instead, funds should be released to city and county governments to

improve their financial condition. The Subdivision of Financial Income and Expenditure Law

should also be amended to establish a sensible allocation formula so as to narrow the

urban-rural gap and strengthen local governments.

10. In conducting cross-strait negotiations, China should first clear away all trade obstacles

and policies that are unfair towards Taiwanese products and businesspeople as well as

cease political interference. Taiwan should not rashly engage in a wholesale opening up

to China. Cross-strait negotiations should be transparent and be subject to the

monitoring of the legislature and society. The government should not sign the

Comprehensive Economic Cooperation Agreement (CECA) without a social consensus.

A financial defensive mechanism should be set up before any cross-strait financial

interaction takes place so as to prevent manipulation.

Putting the Conferences Consensus into Action

A. Promote progressive legislation: the DPP legislative caucus participated in this conference. We

will bring the conclusions of this conference to the legislature and immediately propose and

push for progressive laws. We will observe how the KMT and government officials handle these

legislative proposals and evaluate the Ma administration based upon whether it sincerely gives

them consideration.

B. Keep watch over cross-strait economic activity: during the second phase of the Taiwan

Citizen Conference on National Affairs, we will carry out a comprehensive evaluation of

Mas China policy that hopefully will spur a dialogue among the participants over Mas

decision to link Taiwans economy to China. We will speak out on how peoples

livelihoods will regress should Taiwan lose its economic autonomy. Our legislative

caucus will get up to speed up party negotiations on related bills so that cross-strait

talks will become transparent and be subject to the legislatures monitoring. Moreimportantly, the DPP will be pushing for the right and a mechanism for the people to

directly participate in major cross-strait issues.

C. Pushing for political and social reform: second phase of the Taiwan Citizen Conference on

National Affairs will also address those concerns.

D. Connecting with social movements: we will continue to dialogue, communicate, and connect

with civic and social movement groups to form a clearer policy and platform. We will strive to

turn this platform into a social consensus. We wish to work together with social movement


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organizations and strengthen the partys idealism and sense of responsibility. This is the path

we must take.

In her closing remark, Dr. Tsai Ing-wen expressed her appreciation for all participants in the conference.

She said, We are here for only one hope and that is for the people of Taiwan to be able to safely

weather this economic crisis. Our purpose here is not to insult or irrationally blame any single person, but

instead provide constructive comments and dialogue.

As I was listening to the reports from the different groups, a thought came to my mind. If President Ma

Ying-jeou had attended, he would have observed

many ideas. We here do not have any executive power.

Nevertheless, we have expertise, we have experience,

we have creativity, and most importantly, we have

opportunities to interact closely with the day-to-day

lives of the grassroots. This is what President Ma does

not see, and this is his inconvenient truth. This is the

truth: the Ma administration has a very serious crisis of

governance. His team has already produced too many

examples of ignoring crises, promising the impossible,

making erroneous predictions, and ineffectively

executing policy. In the midst of such a perilous

economic environment, any misstep or mistake in the governments policymaking could possibly lead to

a permanent tragedy for a family, a society and a country.

If the ruling party is sincere in engaging in dialogue, we as the opposition party as well as all of the

specialists who have contributed their ideas to this national affairs conference are willing to respond,

she added.

DPP Public Survey Center:

Taiwans Unemployment and Economic Issues

The unemployment problem is getting worse; the public has lost faith in the governments economic

policy and its claim that further integration with China is the remedy for the economy

On February 26th, the Directorate-General of Budget, Accounting and Statistics (DGBAS) of the

Executive Yuan stated the unemployment rate in January 2009 was 5.31%, the highest January

unemployment rate in 31 years. However, based on a DPP Public Survey Center survey, the

unemployment rate could actually be 9.47%, meaning there are approximately 1.25 million people

currently out of work.

DPP spokesperson Cheng Wen-tsang said that this is an alarming sign. According to the 2002 to 2009

historical statistical data, the unemployment rate in January is usually lower than the December figure

due to the demand for part-time workers for Chinese New Year sales. However, this year has been


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exceptional- there is a 29,000 increase in the unemployed population compared to December 2008. In

fact, the unemployment numbers have been rising continuously for nine months, since last April;

unfortunately, the Ma administration has underestimated the seriousness of the unemployment problem.

Second, the rise in January unemployment indicated that the consumer voucher did not generate new

demands and thus create job opportunities as the government anticipated. Moreover, the usage of

consumer vouchers concentrated in a small number of big venders and crowded out businessopportunities for small venders, thus, there is no increase in total domestic consumption.

Third, the 5.31% statistic means 1.26 million people are affected. Many families have lost a major source

of income- many children cannot afford their meal plans, college students have temporarily suspend

their schooling to work part-time, house wives and retirees are forced to look for jobs to support their

families. More seriously, there are also many families who cannot afford their house loans and thus have

lost their homes. This will cause severe social problems.

Fourth, based on the DGBAS statistics, there are 162,000 people who lost their jobs since the Ma

administration came into power. Any policy impact on the job market should be carefully assessed. We

are sorry to see that the Ma administration has failed to do so. For example, the Ma administration has

rushed to sign the Comprehensive Economic Cooperation Agreement (CECA) without any assessment.

Our worry is that once the CECA is signed, cheap Chinese products will have a tremendous impact on

Taiwans traditional industries and the agriculture sector, and this will result in even worse

unemployment and severe social costs.

Unemployment issue

* The definition of employed/unemployed adopted in the survey is the same as the one used by the

Directorate-General of Budget, Accounting and Statistics: a person who is looking for work and is currently

available for work but is unable to find a job. * Sample size: 1068

Involuntary unemployment accounted for half of total unemployment, and about 30 % ofthis category lost their jobs over the last three months.

Among the 11.9million employed population, 14.1% (about 2.71 million people) said theirsalary and working hours have been affected by the external economic environment with10% (about 1.92 million people) saying their salary has been reduced and 4.7% (about900,000 people) responded by saying that they have been forced to take unpaid leave .

Public confidence in the governments economic policy

3.3% of respondents agreed that the government has adopted effective measures toimprove unemployment while 63.5% of unemployed people answered that those

measures are ineffective.

74% of respondents said current economic policy is shortsighted and only emphasizes the

short-term effect instead of national development over the long run.

52% of respondents disagreed with the statement: Taiwans economy is bad right

now, so we should further strengthen our economic interaction with China.

(* Figures from pan-green respondents and swing voters are 79% and 64%

respectively.)

73% of respondents did not believe President Mas statement that the economy will become

better at the 2nd quarter of 2009.


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CEPA? CECA? OR ECFA?

Liberty Times interview with Chairperson Tsai on

On March 2, Dr. Tsai was interviewed by Liberty Times reporter Ms. Tzou Jing Wen . (*Thisinterview can be found at http://www.libertytimes.com.tw/2009/new/mar/2/today-p4.htm)

Ms. Tzou: What is your response to Straits Exchange Foundation (SEF) Secretary-General Kao

Koong-lians () statement, Tsai is a scoundrel for criticizing CECA when she fullyunderstands it?

Dr. Tsai: I really do not know what their intentions are. And I dont think that I, the chairperson of the

opposition party, am alone in this, as most people in Taiwan do not know either. A recent media poll

showed that about 20% of the respondents supported the CECA, 30% were against it, and 40%

didnt know what a CECA is. Within the 20% who supported the CECA, 40% didnt know what

CECA was.

The governments cross-strait policy-making process has not been transparent at all since last

year. Most of the time we are kept in the dark concerning the dialogue that occurs between the

government and the Chinese side. We are just notified when decisions emerge from these

smoke-filled room negotiations. For example, when the Ma government announced that Chinese

envoy Chen Yunlin was going to visit Taiwan, it did not take into account the feelings of the Taiwanese

people, who had very negative feelings towards China at the time due to the contaminated milk scandal.

The government insisted, however, that Chen would still come to Taiwan. Also, President Maunexpectedly rescheduled his meeting time with Chen to avoid protests. Today, we are still unaware of

the details of a CECA, yet President Ma has insisted that there is an urgency and it must be signed

immediately.

As I see it, there are a few possible explanations for what is happening now. One is that the government

is reckless or even arrogant, and is oblivious to how policy should be conducted in a democratic country.

Ma simply makes a decision and then implements it without any thought toward developing a

society-wide consensus or even including public participation in the decision-making process.

Every issue with a subject matter that involves China, no matter how insignificant it may seem,

will inevitably draw major public attention and debates in Taiwan. Thus the government shouldapproach these issues with additional caution and transparency. However, we have not observed

any transparency with this administration. Maybe memories of their authoritative past have proved to be

too significant to erase. After enjoying eight years with the DPP in government, the Taiwanese people

have come to expect a more transparent decision-making process and consensus building from their

government.

Moreover, the Ma administration has not used this kind of decision-making style exclusively in

cross-strait issues. It has been true in other areas, such as massive spending projects like the Expand

Domestic Demand Program and consumer voucher scheme. It is really worrisome because this kind of


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careless decision-making comes with great risk, as these decisions carry significant long-term

consequences that severely impact the country.

Another possibility is that there might be some kind of mutual understanding or agreement made

between the KMT, the Ma administration and China during their negotiations. But our question remains:

what has been agreed to which has forced the government to take such haste in pushing their

cross-strait agenda? What is more dangerous for our country, and what really worries society the most,is if the government possessed a blueprint on Taiwan-China relations which it never revealed to anyone

else. We dont know if this blueprint is the collective efforts of the KMT and China or Ma just falling into

Chinas unification trap without realizing it. Without transparency in our governments interactions with

China and without a full disclosure of its overall policy on China, Mas statement about urgency has

really raised our doubts and concerns.

This government has completely forgotten that there are at least more than 40%of voters who still have

reservations about rapid liberalization of our relations with China. Even for those who voted for President

Ma, not all of them support a reckless cross-strait policy and the eventual goal of his policies - if what the

KMT has in mind is unification.There are at least two dimensions for any government when managing relations with China: the China

dimension and that of our own whole society. My feeling is that this administration has only concentrated

on the China dimension and completely forgot about public support, the public from whom the legitimacy

of his presidency derives.The Ma administration has commented that the CECA has been decided upon and approved thanks to

the Presidential election result. However, the platform Ma used during the campaign is different from

national policy. As a leader of a country, he has to coordinate and integrate different voices and

concerns. He seems to forget that when one negotiates with China, one cannot spontaneously

assume that China comes only with good will. There will be competitive as well as cooperativerelations between the two sides; You cannot let your guard down concerning Chinas intentions

and policy regarding Taiwan. In short, it seems that Ma is more afraid of the Taiwanese people than

he is of the Chinese government. He avoids keeping the public abreast of the negotiations and he has

continually made political concessions to China.

Ms. Tzou: Mr. Kao Koong-lian and President Ma have been on T.V. commenting that the CECA

is a purely economic matter. They also mentioned that you were involved in Taiwans

participation with the GATT and the WTO, thus you are supposed to act professionally and

prevent the CECA from becoming politicized.

Dr. Tsai: Wrong!. When the government first proposed the CECA, it was a political move, not aneconomic one. The government did not come up with the economic justification until opposition

from society became profound. The government tried to seek support from the petrochemical

industries, as well as other business conglomerates. But if these companies really needed a CECA, it

should have been those companies demanding government action and not the other way around.

If there is a problem exclusive to competition within an industry, then the industry should give a

comprehensive explanation of the problem. Then the government should conduct a

comprehensive analysis of the problem and seek all forms of solutions. Moreover, the

government should also include opinions from disadvantaged industries and workers who are

more vulnerable to the changes.


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Of course, I understand these economic and trade issues. What I dont understand is the way they are

trying to solve the problem and the political intention behind their approach.

Ms. Tzou: What would you do as a professional economist in this situation?Dr. Tsai: First off, the government quoted a 2004 report from the Chung-hua Institution for Economic

Research (CIER) that the impact of ASEAN+3 would be a reduction of 1% in Taiwans GDP. Similarresearch done in 2005 states there will be a reduction of .7%. This drop, though, will only affect Taiwan

in the long-term; while there will be no short-term impact. Also, the ASEAN+3 deal is still under

negotiation and yet to be finalized.

Second, ASEAN and Taiwan have different industrial structures. Most of our products dont compete

with products from the ASEAN countries. Japan is not our direct competitor either. The only possible

competitor is South Korea. But, taking the petrochemical industry as an example (which was identified

by the government as one of the reasons why there is an urgency to sign the CECA ), the tariff reduction

from 6.5% to zero will be a gradual change, not an immediate one. We eventually will have to deal

with ASEAN+3, but it is not so urgent that we have to sign a CECA with China as soon as

possible. The solutions proposed by President Ma are simply wrong. As for ASEAN+1, according

to CIER, the impact would be even more insignificant (0.15%).Ma said we should sign FTA with other countries. Unfortunately, everyone knows that the main

obstacle to this comes from China. Now if he wants to speed up the interaction with the very

source of the obstacle, then he will be falling into the trap set by China. With the help of the

current administration, China is restricting all the movements of Taiwan to the point that soon

its only move will be to go west towards China.

According to President Ma, the pressure of tariff is a major problem that has to be dealt with immediately.

But in actuality, managing this matter could be quite simple the World Trade Organization (WTO).Any WTO member would have conducted bilateral negotiations on tariffs; however, we did not have the

rounds of negotiations with China in our accession process to the WTO. As a member of the WTO,

China has the responsibility of holding bilateral discussions with us, either to discuss trade matters of

mutual concern, or we can raise specific issues that concern our trade competitiveness. In other words,

tariff concerns of the industries can be raised and discussed under the existing WTO framework

and it would not be necessary to deliberately create another framework just for this purpose. If

President Ma believes that ASEAN+3 will be harmful to our exports, there is another alternative,

using the framework of APEC. In APEC, there is a sectoral liberalization initiative, which promotes

zero tariff sector-by-sector, based on an order of priority reached by consensus amongst the member

economies. Taking the petrochemical sector as an example, should APEC member economies

recognize mutual benefits for all in the region, everyone will sit down and talk, and work towards zerotariff for the petrochemical sector. I can not understand why the Ma administration, instead of thinking

and talking about other alternatives, insists on telling the people that there is only one available option.

If we feel excluded from the process of Asian regional integration, the Ma administration should

reflect on this: with the extent of political concession President Ma has made towards China

since his inauguration on May 20th, why has he not been able to negotiate for a commitment from

China to let Taiwan sign an FTA with one of our key trading partners, without having China

protesting and creating obstacles?


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Ms. Tzou: President Ma quoted CIERs report that ASEAN+3 will cause 110,000 people to lose

their jobs. Whats your response to that?Dr. Tsai: In the CIERs report, the worst scenario is that Taiwans GDP will decrease by 1%. To say that

a 1% drop in GDP will result in 110,000 people being unemployed is an exaggeration. The projection is

probably based on the hypothetical situation where an entire industry disappears. Taking the

petrochemical sector as an example, its competitiveness is tied to its transportation cost, scale economy,product differentiation and so forth, tariff is not a key factor affecting its competitiveness. A tariff rate of

6.5% can be easily overcome in a few years. I fail to understand why there is necessity to exaggerate. It

is as if 110,000 will lose their jobs as soon as within the next year. Unemployment en masse does not

happen in a short time, it occurs gradually, and over time. During which, factories and workers make

adjustments and in some cases, make transitions into other industries. The study used by the

government is an extreme scenario that could not possibly happen; it is like threatening its own

people. The actions taken by the Ma administration reflects only political decision-making rather than

economic.

I want to emphasize that the DPP is not opposed to normalizing economic and trade relations

with China. But, this normalization has to be done under the framework of an international

agreement and must not hurt Taiwans sovereignty. If we have to further liberalize our economic

relations with China, the government must conduct comprehensive assessment, careful

planning and most importantly, seek public consensus.

Ms. Tzou: What President Ma proposed in his campaign platform was a Comprehensive

Economic Cooperation Agreement, CECA (), but now, he has renamed itan(Economic Cooperation Framework Agreement, ECFA). Do you think thislatter is the same as his platform proposal?

Dr. Tsai: The government has been playing games with both names and politics. If you take a closelook at how things have evolved, at the beginning, Ma proposed a Comprehensive Economic

Cooperation Arrangement, CECA. This indicates that what he had in mind was to have something

similar to the Comprehensive Economic Partnership Agreement, CEPA signed between Hong Kong

and China. But after strong public opposition, he revised it to a normal FTA, and then later again, defined

it as a framework treaty () and said that it will only deal with tariff issues. Last Friday, heannounced that he is going to sigh a framework agreement ().

Treaty and agreement are different. A Treaty is between countries and requires stronger

supervision from the Legislature; in an agreement, on the contrary, sovereignty is less an issue. He

has been changing his position based on public reaction, and cutting down his proposal. Ms. Tzou: Whether a Treaty can really become agreement or not, Chinas attitude is also a

key. But so far China does not plan to sign a treaty with Taiwan. Does this mean President Ma

already made a concession before negotiation?

Dr. Tsai: Recently, many political figures from China, including Premier Wen Jia-bao, expressed their

support for signing this framework agreement with Taiwan. Apparently China has a clearer

understanding of this agreement than we do. President Ma has to explain to the Taiwanese people why

Chinas understanding is better than ours.


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Ms. Tzou: Vice Minister for Economic Affairs Lin said that in informal exchanges with a Chinese

counterpart, they thought there would be a comparative advantage if China and Taiwan were to

come to an agreement. What do you think?

Dr. Tsai: Whether Taiwan and China share comparative advantage in terms of its economic

development; what are the impacts on industries following economic integration; what is the extent ofconflict of interest between Taiwan and China in terms of our national objectives these are key national

issues and are not matters that can be simply carried out based on a common understanding reached in

an informal meeting between the Vice Minister of the Ministry of Economic Affairs and an official from the

other side.

Ms. Tzou: In March the government plans to hold a forum on these issues. However, it seems

that not all sectors of society will be involved. Looks like a public relations effort. What do you

think?

Dr. Tsai: I think President Ma has set out his political agenda on China, and the economic issue issubordinate to his political time table. But, what is his political objective? If he disagrees with The

Washington Posts comments that a CECA/ECFA is the first step towards unification, then he has to

explain. Whats next after this agreement? Ma must tell us everything!

The government cannot use the name agreement to avoid supervision by the Legislature and then

smuggle in Mas political agenda. Government cannot just go ahead until there is no way to return, and

then tell people that they cannot do anything but give in. In Europe, even for non-political integration,

such as economic integration, it requires public approval through a referendum process. Thus,

we ask the government to have a referendum on this issue and enable people to voice their

opinions.

We have been listening to what people are saying and know that Taiwanese society feels anxious about

what the Ma administration has been doing. If the government doesnt explain clearly nor allow

people to vote on his proposal, Ma is putting this society at risk of further division. It will have a

grave impact on Taiwans democratic system and might radicalize our society. If this does happen,

the current ruling party has to take biggest responsibility.