ECFA and Jason Hu

There have been two big news stories in recent days that have the potential to fundamentally alter this year’s elections.  First, the TSU’s petition for a referendum on ECFA was rejected by the reviewing committee.  The DPP has declared all-out war.  I don’t know exactly what this means (and so far it isn’t very much), but if the DPP gets too radical, it could marginalize itself.  On the other hand, there isn’t exactly a groundswell of support for ECFA.  The DPP simply shouldn’t overplay its hand.

Second, Jason Hu has trouble with organized crime in Taichung.  This is the kind of development that could derail his re-election campaign.  It isn’t a big enough story to do that yet, but if we keep hearing new angles to this story and we are still talking about it in two or three months, all bets are off.  Public safety and local elections are a nightmare combination for the KMT.  On the other hand, 2010 doesn’t feel much like 1997 in several ways.  In 1997 there had been public anger building about organized crime in politics for several years.  The Bai Xiaoyan case simply focused that anger.  And when Chen Jinxing stormed the South African embassy one week before the election, the public could hardly help but think about public safety and organized crime when they cast their votes.  (Aside: If you don’t know the history of 1997, this paragraph is probably very confusing.)  The current case will have to grow a lot before we approach those levels.

I feel like Mr. Obvious today.

On ECFA

ECFA is one of the most important and most discussed issues in Taiwan today.  It is also one of the least understood.  ECFA (Economic Cooperation Framework Agreement) concerns the trading relationship between Taiwan and China.  And that is about all I know about it.  (This post will be a whiny exercise in frustration.  You have been warned.)

No one really understands ECFA because (a) it is a highly technical matter with an enormously complex scope, and (b) the KMT government has chosen to withhold any details during the negotiation process.  As a result, people have resorted to crude ideological schemes to try to figure out how they should feel about it.  People who support the KMT, unification with China, the principal of free trade, or have interests in big corporations tend to be for ECFA, while people who support the DPP, Taiwan independence, are skeptical of free trade, and who work in lower income jobs tend to be against ECFA.  Are these lines reasonable?  I have no idea.  Even if I knew the content, I doubt I would understand its impact.

Hopefully, some of this will become clear over the next month.  President Ma has agreed to debate DPP chair Cai Yingwen at the end of the month, so maybe they will delve into substantive policy issues, and we will learn something about the potential impacts of various provisions.  Maybe after this month of serious policy debate, it will be clear that certain sections have strong public support and that other provisions need revision.  Maybe.  But more likely, this will be a month of more ideological screaming designed to polarize and obscure.  At any rate, the KMT has invested far too much to pull back.  It will sign the pact, regardless of public opinion.  (The KMT seems to have become fascinated with the Obama model: As soon as health care passed, Obama’s satisfaction ratings went up.  Ma’s people seem to think the same thing will happen as soon as he signs ECFA.  Or maybe as soon as the 2^nd generation healthcare program passes.)  What the debate might influence is the next round of negotiations with China.  This round is supposed to be the easy stuff, the so-called “early harvest.”  Depending on how popular it is, the next round will expand the scope significantly or only slightly.

(With only a token DPP presence in the legislature, public opinion is the only brake on a more aggressive integrationist policy.  Last year, the legislature didn’t even hold fast on its demand that its consent – which was never in question – was necessary for treaties with China.)

KMT scores an own goal

I recently wrote about the allocation of centrally-funded tax revenues to local governments 中央統籌分配稅款.  This topic has resurfaced in a minor news story over the last week.

While interpolating Finance Minister Li Shude 李述德, KMT legislator Cai Zhengyuan 蔡正元 lashed out at DPP local governments for opposing ECFA.  He averred that local governments that opposed ECFA should not be allowed to get any of the centrally-funded tax revenues.  Lu Shude replied that Cai had read his mind (roughly translated).  The DPP immediately seized on this exchange, charging the KMT with political blackmail and no understanding of democratic politics or the relationship between local and central governments.  KMT secretary-general Jin Pucong 金浦聰 tried to damp down the controversy by suggesting that Cai did not speak for the party and perhaps should be more careful about what he said in public.  Cai responded indignantly that Jin didn’t know what he was talking about.

This was an enormous gaffe for the KMT.  Threatening to take away funds from local governments is a pretty good way to ensure that voters in those counties never vote for the KMT again.  It also violates principals of free democratic debate.  At the very least, one would hope that the KMT believed that ECFA will provide sufficient benefits that they could sell it to voters rather than simply threatening voters that they must accept it “or else.”  More generally, debate on public policy is supposed to be acceptable in democracies.  Various sides are supposed to be able to vigorously present their arguments.  It would be different if a local government were to actively violate some law passed by the central government, but, as far as I know, that has not happened.  ECFA has not even been signed yet, and local governments don’t have much power over international trade regimes.  At this point, the various local DPP governments are simply yelling that ECFA is a terrible idea.  In a democratic polity, that is not a cause for fiscal retribution.

From the KMT’s point of view, the worst thing about this flap may be that Cai and Li caused a stir for no useful reason.  The allocation of tax revenues is codified in law.  It is not a discretionary pool of income that the KMT can dole out according to its political needs.  In other words, there was never a chance that the KMT could actually carry through with this empty threat; the only effect is the backlash.  Shouldn’t the Finance Minister have known this?  Also, shouldn’t Cai have known that he was making a huge political error?  Li is a technocrat, so I’ll forgive him for not realizing what a political blunder he was committing by going along with Cai.  Cai Zhengyuan is a fairly savvy politician who is supposed to be good at this sort of thing.  He used to be the KMT party spokesman and the spokesman for the Ma presidential campaign, for crying out loud.