Globalization and Taiwan: Interview with Hsu Chung-hsin

Hsu Chung-hsin is a black horse candidate for the mayor of Tainan, the old cultural capital of southern Taiwan. He has political experience serving as legislator in the past, but he is first and foremost Professor Hsu, a legal scholar. Professor Hsu’s academic background is in international trade law, international finance law and intellectual property law.

How is a professor who is a firm proponent of free trade and globalization look at trade with China, as well as lifting local communities within globalization? We interviewed him a short while ago.

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As a scholar of international trade and an advocate of globalization, why did you decide to oppose the Economic Cooperation Framework Agreement (ECFA) between Taiwan and China in 2009, especially in a very public manner?

If you look at Taiwan’s geographic location, you’ll see that there is Japan and Korea to the north, China to the west, United States to the east, and Southeast Asia to the south. Taiwan is dead in the center between all their trade routes. As an island, it is the perfect place for trade; its position as a hub and transit stop can bring prosperity to her people.

Foreign powers are also eager to exploit Taiwan as well. China is eager to take over Taiwan today and we have been occupied by Japan before. I believe the best way to ensure our security is through globalization. If we are part of the same global system of which our aggressors are a part, then there will not be any one particular power that can control Taiwan. Globalization is the key to our prosperity and safety.

Although ECFA seemed to be just another agreement to open up Taiwan’s trade, it covers a very wide range of economic life in Taiwan: goods, services, and intellectual property rights. Opening up all these facets of Taiwan’s economy to China actually decreases our exposure to the rest of the world. It draws Taiwan closer to China’s influence, and decrease the influence of Japan, Europe, and the US.

This is politically damaging for Taiwan, since China is proactively taking over sovereignty of Taiwan. Economically this is damaging too. The southern region of China and Taiwan lies on the same latitude, and we have similar agricultural products. In manufacturing, Taiwan cannot compete on the supply of labor or cheap land. In short, China is not only a poor choice for trade, China also has a political agenda to hurt Taiwan.

While I was a professor, I saw that our government at the time pushing for something so harmful for Taiwan, I felt I had to speak up. It was also during when I was being evaluated for tenure, and my opinions could end up hurting my chances, but I felt it was the ethical thing to do to speak up for Taiwan according to my academic expertise.

Is it fair to say then, you don’t oppose trade, but you oppose trade with China because it should be treated as a special case, which is different than FTA with Japan or New Zealand?

Exactly. I am not coming from the perspective of isolationism. It is because I support globalization that I oppose becoming too close to China alone.

Since ECFA in 2010 and the Sunflower Movement against the services trade agreement with China in 2014, what do you think of the current state of Taiwan’s trade relations, especially since the Democratic Progressive Party (DPP) has taken power?

Taiwan’s trade and investments in China has since then cooled off a bit, which I believe is good for Taiwan’s economy and technological progress. Our economy has improved since the Chinese Nationalist (KMT) administration. It’s a good start, but there are a lot of things we still have to do to really improve our economy.

Such as?

We need to take advantage of our geography and our comparative advantages. First of all, our agricultural products can be promoted much more to places with different climates (and thus different set of products), like Japan. Our fruits and vegetables are competitive. But what we can do is, for example, promote geographical indication branding and trademark.

Everyone has heard of Bordeaux wine or Aomori apples. Taiwan has much room to improve here. Taiwan’s terrior, its land and waters, climate, and artisanal craftsmanship are very unique in the world. We can make this our brand. People in Taiwan already know Aiwen (Ai-bun) citron, Yujing (Giok-tsenn) mangoes, but we haven’t really make use of the value added from the branding in international trade. We’ve just let local farmers figure it out on their own, instead of having a coordinated strategy and execution like in many prefectures in Japan.

Second, people in Taiwan are not as familiar with Europe. Germany, Austria, Switzerland and the Netherlands, are also the most economically strong in Europe. When they manufacture in Europe but sell to Asia, the shipping cost is very high. They can instead manufacture in Taiwan, and since both Taiwan and China are members of the WTO, the tariffs from Taiwan to China is the same as tariffs from Europe to China based on the most favored nation principle. In addition, Taiwan has much better IP protections and highly skilled workers.

Third, I’d like to see tourism in Taiwan more developed, based around deeper understanding of our own culture. When visitors come to Taiwan, they want to know more about Taiwan’s culture, arts, and cuisine. The more specific we are about our own local culture, the more global we can take them. Tainan, where I am running for mayor, happens to be the place in Taiwan that has the longest written history and an abundance of religious, linguistic, and food culture. We haven’t been able to promote them, and even have been looking down on them, I think that’s a shame.

I have an idea for a Thailand-Taiwan joint travel package: Thailand attracts many European visitors. Taiwan is just a cheap three hour flight away, yet has very different food cultures and particularly different sects of Buddhism. I think a joint package comparing the two Asian cultures could be very interesting.

What do you think Taiwan can do amid the ongoing US-China trade war?

It’s understandable that the US would act, given China’s anti fair-trade practices such as dumping and forcefully taking US intellectual property. Taiwan has some opportunities to gain an edge as an alternative, better trading partner for the US in certain sectors. Businesses that are based in China but sell to the US now face a raised barrier; they can relocate back to Taiwan and create jobs back in Taiwan.

Of course there will be Taiwanese businesses doing business in China that will be hurt; I believe the government should provide assistance. For example, their products can come back to Taiwan for one final manufacturing step; this will allow the products be labeled as exported from Taiwan and avoid American tariffs. The government can help match manufacturers in Taiwan to provide this kind of service.

Politically, I believe this is a good opportunity for Taiwan to engage the US on a free trade agreement with the US, and to proactively increase trading opportunities with the US. We should make use of the current politics in our interest.

Finally, as you are on a tour of the United States speaking to Taiwanese American audiences, what are your thoughts on Taiwan-US relations?

Traditionally, the US sees Taiwan as one issue within its US-China relations, and the Taiwanese perspective can only be heard through the grassroots efforts by Taiwanese Americans such as the Formosan Association for Public Affairs (FAPA) or local Taiwanese American Associations. But the first generation of advocates are becoming too old, so I hope we can create more ways through which the US public can hear about Taiwan, such as the Global Taiwan Institute in DC or through mass media.

To sustain a healthy Taiwanese American grassroots movement, I hope that second and third generation Taiwanese Americans, or even Taiwanese expats, can somehow be more connected to what’s happening back in Taiwan, and then be able to clearly communicate that awareness, understanding of Taiwan’s history and identity with the world.

(Feature photo of Hsu Chung-hsin, by Raymond Chuang)