FEBRUARY 2009 Democracy &



Department 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: foreign@dpp.org.tw web: http://www.dpp.org.tw

Happy Lunar Receive Top Marks in CCW Six Members of the DPP New Year!
Evaluation Report of the 7th Legislature (p2) Remember the 228 Incident (p2) “We can forgive historical mistakes but history must not be forgotten...”, Dr. Tsai

DPP 2009 Action Plan (p3)
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…

Director: Lin, Chen-wei Deputy Director: Huang, Chih-ta Editor-In-Chief: Liu, Hsiaoching Editor: Mike Fonte Staff Writer: James Chen Britt Mercadante

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 Is ‘Small Yet Beautiful And Powerful’ (p6)

Conclusion of the “Taiwan Citizen Conference on National Affairs” (Feb. 21-22) (p7)
The Taiwan Citizens Conference on National Affairs was held on February 21-22 at the Howard International House, Taipei. More than 300 people showed up in a conference room with only about 200 seats. Comments from panels and participants could be summarized in the following points…

The DPP Public Survey on Taiwan’s Unemployment and Economic Issues (p10)
52% of respondents disagreed with the statement: “Taiwan’s economy is bad right now, so we should further strengthen our economic interaction with China”…
-1Liberty Times interview with Dr. Tsai: (p12)

Please note that articles in this publication should not be used as direct quotation unless with the explicit permission from the editor.


Six Members of the DPP Receive Remember the 228 Incident Top Marks in CCW Evaluation On February 27, in commemoration 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 Foreign and National Defense Committee Judiciary and Organic Laws and Statutes Committee Finance Committee Economics Committee Internal Administration Committee Transportation Committee Education and Culture Committee Social Welfare and Environmental Hygiene Committee No.1 Twu Shiing-jer (涂醒哲) Lu Hsueh-chang (呂學樟) Huang Wei-cher (黃偉哲) Pan Meng-an (潘孟安) Chen Chieh-ju (陳節如) Yeh Yi-ching (葉宜津) Chiang Yi-hsiung (江義雄) Huang Sue-ying (黃淑英) and William Lai (賴清德,)

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 personal experience 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 ruling party, will take this responsibility seriously,” she said.

“Citizen Congress Watch” was founded two years ago by a group of scholars, journalists, college students and representatives of various civic groups and 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.

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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 checks and balances to the government’s policies and (2) how to better connect with social powers (grassroots and civic organizations).



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, women’s 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 Taiwan’s democracy. The DPP’s ‘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 strengthen the party’s ideals and social responsibility. The DPP will consult academics to strengthen the DPP’s policy research capabilities- to make the DPP’s 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. 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 party’s 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.


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 Taiwan’s sovereignty and 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 Taiwan’s 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 party’s 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 Taiwan’s sovereignty”, “Playing a constructive role in fighting economic recession and unemployment”, and “Winning the local elections”

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I. Safeguarding Taiwan’s sovereignty
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The DPP will renew its discussion of sovereignty to make it more closely connected to people’s 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 necessary to 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 Taiwan’s 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 administration’s 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 Taiwan’s democracy and social reconciliation.

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

• •

Employment initiatives will be central to the DPP’s discussion of the economy and economic policy; we’ll 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 government’s 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 to serve 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: Department of Social Development Department of Ethic Affairs New department: Social Movement Department Department of Hakka Affairs Department of Indigenous Affairs 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 18th to discuss the DPP’s 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 Committee’s quota is NT$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 -6Please note that articles in this publication should not be used as direct quotation unless with the explicit permission from the editor.

Based on Taiwan’s political donation law: 1. 2. 3. Contributors have to be Taiwanese citizens. Individual’s annual donation to one political party cannot exceed 300,000 NTD. Contributors’ name, id number, valid address, and phone numbers have to be listed. 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 Taiwan’s 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. 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.” 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. 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 the pace 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. The economic crisis is not an excuse for the finance ministry’s 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. 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. 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. 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 Conference’s 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. 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 Ma’s China policy that hopefully will spur a dialogue among the participants over Ma’s decision to link Taiwan’s economy to China. We will speak out on how people’s 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 legislature’s monitoring. More importantly, the DPP will be pushing for the right and a mechanism for the people to directly participate in major cross-strait issues. Pushing for political and social reform: second phase of the Taiwan Citizen Conference on National Affairs will also address those concerns. 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 party’s 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 government’s 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:

Taiwan’s Unemployment and Economic Issues
The unemployment problem is getting worse; the public has lost faith in the government’s 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 business opportunities 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 Taiwan’s 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 % of this category lost their jobs over the last three months. Among the 11.9million employed population, 14.1% (about 2.71 million people) said their salary and working hours have been affected by the external economic environment with 10% (about 1.92 million people) saying their salary has been reduced and 4.7% (about 900,000 people) responded by saying that they have been forced to take unpaid leave.

Public confidence in the government’s economic policy
3.3% of respondents agreed that the government has adopted effective measures to improve 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: “Taiwan’s 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 Ma’s statement that “the economy will become better at the 2nd quarter of 2009”.
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Liberty Times interview with Chairperson Tsai on
On March 2, Dr. Tsai was interviewed by Liberty Times reporter Ms. Tzou Jing Wen 鄒 景 雯 .
interview can be found at http://www.libertytimes.com.tw/2009/new/mar/2/today-p4.htm) (*This

Ms. Tzou: What is your response to Straits Exchange Foundation (SEF) Secretary-General Kao Koong-lian’s (高孔廉) statement, “Tsai is a scoundrel for criticizing CECA when she fully understands it”? Dr. Tsai: I really do not know what their intentions are. And I don’t 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% didn’t know what a CECA is. Within the 20% who supported the CECA, 40% didn’t know what CECA was. The government’s 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 Ma unexpectedly 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 should approach 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 don’t know if this blueprint is the collective efforts of the KMT and China or Ma just falling into China’s unification trap without realizing it. Without transparency in our government’s interactions with China and without a full disclosure of its overall policy on China, Ma’s 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 cooperative relations between the two sides; You cannot let your guard down concerning China’s 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 Taiwan’s 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 an economic 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. - 13 Please note that articles in this publication should not be used as direct quotation unless with the explicit permission from the editor.

Of course, I understand these economic and trade issues. What I don’t 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 Research (CIER) that the impact of ASEAN+3 would be a reduction of 1% in Taiwan’s research done in 2005 states there will be a reduction of .7%. This drop, though, will only in the long-term; while there will be no short-term impact. Also, the ASEAN+3 deal negotiation and yet to be finalized. for Economic GDP. Similar affect Taiwan is still under

Second, ASEAN and Taiwan have different industrial structures. Most of our products don’t 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 it’s 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 zero tariff 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?

- 14 Please note that articles in this publication should not be used as direct quotation unless with the explicit permission from the editor.

Ms. Tzou: President Ma quoted CIER’s report that ASEAN+3 will cause 110,000 people to lose their jobs. What’s your response to that? Dr. Tsai: In the CIER’s report, the worst scenario is that Taiwan’s 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 Taiwan’s 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” (兩岸綜合性經濟合作協定), but now, he has renamed it an 「經濟合作架構協議」 (Economic Cooperation Framework Agreement, ECFA). Do you think this latter is the same as his platform proposal? Dr. Tsai: The government has been playing games with both names and politics. If you take a close look 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 (協定)” and said that it will only deal with tariff issues. Last Friday, he announced that he is going to sigh a framework “agreement (協議)”. “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, China’s 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 China’s 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 of conflict 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 What do you

that not all sectors of society will be involved. Looks like a public relations effort. think?

Dr. Tsai: I think President Ma has set out his political agenda on China, and the economic issue is subordinate to his political time table. But, what is his political objective? If he disagrees with The Washington Post’s comments that a CECA/ECFA is the first step towards unification, then he has to explain. What’s 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 Ma’s 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 doesn’t 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 Taiwan’s democratic system and might radicalize our society. If this does happen, the current ruling party has to take biggest responsibility.

- 16 Please note that articles in this publication should not be used as direct quotation unless with the explicit permission from the editor.