Economic isolation is no choice, says Taiwan's Ma

NYT and WAPO, plus the Japan Times via WPR's Media Roundup.

Taiwan's President Ma is pushing hard for the FTA framework agreement with China, his culminating dream of deep economic integration with China.  

Per the NYT story:

“We can handle diplomatic isolation,” Mr. Ma said last month, “but economic isolation is fatal.”

The Economic Cooperation Framework Agreement, the Ma administration says, would be a prelude to similar deals with Malaysia, Singapore and, eventually, Japan or the United States. “Once E.C.F.A. is signed, we want to sign other free trade agreements and try to use mainland China to link with international markets,” a trade official involved in the negotiations, Hsu Chun-fang, said.

In recent years, Taiwan has watched as rivals like South Korea have signed free-trade deals throughout Asia, becoming more competitive in industries like machinery making and pushing their per capita gross domestic product ahead of the island’s.

Taiwan has been hampered in negotiating similar agreements because Beijing views the island as a part of China and objects to other countries’ signing formal treaties that could strengthen Taiwan’s claims to independence. The island has trade deals only with five Latin American countries, which buy a tiny slice of its exports.

The economies of Taiwan and China are already connected. Taiwan has invested $150 billion in China since the early 1990s, according to a Taiwan government estimate. About 40 percent of Taiwan’s exports already go to China, where they face average tariffs of 9 percent. Half of those exports are semifinished goods that are shipped to factories for assembly and other value-added services and then re-exported, according to Mr. Ma.

Yet many of the details remain vague, and that has fueled economic as well as political worries.

For example, Taiwanese business leaders fear a lot of small manufacturing industries, like the show industry, will get wiped out by Chinese competition.

Given his low approval ratings (20s-30s), Ma has felt the need to engage in televised political debate with his primary opponent, as if he were still running for president, according to the Japan Times story.  A lot of experts predict he may be a one-term president whose primary achievement is all his economic accords with China (12 in total) , with the framework agreement hanging in the balance.

My sense:  Ma's fears are well-grounded.  The Asian economic integration process is well underway and only gaining steam. Taiwan can either get in early or be left behind.