Taiwan: Ma Brings Sigh of Relief, but has Much to do

Ma Ying-jeou, Taiwan’s incumbent president, scored a solid re-election victory on Saturday, January 14, easing anxiety in the United States and the Asia-Pacific region over the uncertainties in his opponent’s policy toward mainland China. Moreover, his main rival in the election, Tsai Ing-wen, chair of the Democratic Progressive Party (DPP), proved a strong but gracious loser in defeat. The conduct of both candidates and their supporters in the aftermath brought Taiwan’s often contentious elections and multi-party system to a new level of maturity and self-confidence.

Taiwan’s vote for president, vice president, and the Legislative Yuan marked the first electoral threshold of many to be crossed in 2012. If it had produced a different result, it might have had unpredictable effects on the mainland’s internal politics. Incumbent President Hu Jintao has staked much of his legacy on a policy toward Taiwan that puts peace, patience, and economics first, rather than direct threat and intimidation. As Chinese politicians jockey for position in the succession to a new generation of leadership at the eighteenth Party Congress in the autumn, Taiwan might otherwise have become a contentious issue and policy conceivably toughened.

Washington, for its part, welcomed the continuity and predictability of Ma’s policies and their effect in nurturing a calm Taiwan Strait. The United States has a host of contentious issues with China, but they have been kept within workable bounds for the past sixteen months, and both leaderships have signaled to each other that they want to keep it that way and not let new irritants affect the politics in their respective countries.

President Ma faces a full agenda as he prepares to launch his second four-year term on May 20. With a 51.6 percent victory over Tsai’s 45.6 percent, Ma has a firm mandate for continuity and the policies he expressed in his campaign, including using the “1992 consensus” formula as the basis for practical dealings with China. But he was first to acknowledge that Taiwan’s voters remain almost evenly split over mainland policy, and thus there is no room during his term as president for a “political settlement” with the mainland.

Nonetheless, there is a long list of sectors that have not yet benefited from last year’s Economic Cooperation Framework Agreement (ECFA) that reduced trade barriers in only a few key sectors. Agreement is still needed on protection of investment and on the scope of permitted investment, beyond the sixteen agreements already reached in several areas. There are cultural and educational opportunities for exchanges that need cross-strait consultation and agreement.

The two unofficial organizations that front for the governments, the mainland’s Association for Relations Across the Taiwan Strait (ARATS) and Taiwan’s Straits Exchange Foundation (SEF), want to establish representative offices. Taiwan and mainland industries could also use representative offices on each side to advance their business interests. Official representation is impossible for the medium term at least.

It will take years and probably even decades to develop a consensus on Taiwan about long-term relations with the mainland. The Taiwan people treasure their autonomy and electoral independence. Conditions on the mainland would have to move a long way in the direction of Taiwan’s freedom and social rights for the Taiwan people to contemplate reunification. In the meantime, voters have supported Ma’s policy of “no independence, no unification, and no war.”

Ma’s relations with the United States are excellent, based on full consultation and the principle of “no surprises.” Immediately after his re-election, Ma said he would address the nagging issue of legalizing American beef and pork imports, which have been the main stumbling block to a Trade and Investment Framework Agreement (TIFA), delayed for more than four years. There is a host of regulatory issues the American Chamber of Commerce wants addressed. And over the decade ahead, Ma hopes to build on coming free trade arrangements with Singapore and New Zealand to join the Trans-Pacific Partnership (TPP).

China should use Ma’s victory to reassess its continuing military build-up opposite Taiwan and its limits on Taiwan’s participation in “international space.” For years, Beijing officials have deflected suggestions that these be changed, saying that if China shows any give, the DPP might come to power, pocket the benefits, and pursue independence. Now that the DPP has lost, Beijing needs to reconsider its policies in order to reinforce the approval of Taiwan’s people for Ma’s pragmatic approach. Taiwan’s participation in the International Civil Aviation Organization (ICAO) and the United Nations Framework Convention on Climate Change (UNFCCC) should be easy for Beijing to accept. Creative means should be sought to integrate Taiwan’s central bank with regional banks’ swap arrangements and other facilities, so as to hedge against future likely financial crises.

In any event, the sensitive issue of American arms sales to Taiwan will not disappear. President Barack Obama approved more the $12 billion in sales during his first term. The Taiwan Relations Act mandates further provision of defensive arms and services. How much and when future arms will be provided in large measure depends on how the mainland’s threatening posture evolves.

Taiwan faces multiple economic challenges during Ma’s next term. There are many clouds on the horizon of the global economy. The U.S. recovery is slow, the eurozone is slow and threatened with financial crisis, and China’s long-term growth prospects necessarily are shrinking. Taiwan needs to diversity its investments and manufacturing base, strengthen education and employment opportunities at home, and return—against the trend of globalization—to a pattern of more equitable income distribution.

Taiwan’s population has joined that of other successful, highly urbanized societies in Asia in not reproducing itself. High costs of housing and education, stagnant incomes, and changing lifestyles are threatening economic growth. Politicians in Taiwan spoke of addressing these issues in the election campaign, but they may find solutions just as difficult to find as Singapore, Hong Kong, Japan, and South Korea.