The Philippine - Taiwan Corridor (Part I)

mb.com.ph, By Former President, Fidel V. Ramos, March 14, 2009, 11:29pm 

AT this time of economic turmoil in Asia and around the world, exploring the Philippine-Taiwan corridor in search of new partnerships and opportunities is both challenging and rewarding. Last 21-24 February, I was privileged to head a 40-member trade and investment delegation to Taipei and deliver the Keynote Address at the Philippine-Taiwan Business Conference (PTBC) organized by the Taiwan Chamber of South Philippines (TCSP) and the Manila Economic and Cultural Office (MECO). 

As arranged by MECO and Taiwanese authorities, I paid courtesy calls on/met with Taiwan President Ma Ying-Jeou; Vice President Vincent Siew; National Policy Foundation Chairman/KMT Honorary Chairman/former Vice President Lien Chan; Straits Exchange Foundation (SEF)/ former Economic Minister P.K. Chiang; and Taipei City Mayor Hau Lung-pin. 

With President Ma 

After his inauguration last 26 May 2008, President Ma announced that at the core of his government’s Cross-Taiwan Straits policy is the normalization of economic relations between Taiwan and China. In recent weeks, he has reiterated that Taiwan should accept the grim reality of the global crisis, and try to forge a "Comprehensive Economic Cooperation Agreement (CECA)’’ with China – as part of Taiwan’s long-term recovery program. 

President Ma has urged officials to speed up his administration’s economic stimulus programs, and pushed the Legislature to prioritize the NT$500 billion (US$14.4 billion) budget for public construction. He has asserted it is imperative for the government to review existing policies and implement better ways to boost the economy. 

In our meeting last 24 February, President Ma stressed the importance of the Taiwan connection to the China-ASEAN Free Trade Area (CAFTA), and expressed the hope that the Philippines would become the "most proximate and friendly facilitator’’ to move that network forward. President Ma (a Harvard Law School graduate) told me that Taiwan’s export sector, which accounts for 65 percent of its GDP, was the hardest hit by the turmoil, but assured his Administration is focused on turning around the economy ASAP. He gave his Cabinet up to end-May to come up with a strategic roadmap to restore Taiwan’s economy back to growth. 

CEAGPOL: polygon of opportunity 

In response, I emphasized to President Ma that the warming up of Taiwan’s relations with the Mainland could have real, positive impacts on the regional economy by reducing the cost of doing business with the opening of direct flights and sea transport between Taiwan and the Mainland, and enhancing trade relations with all countries having diplomatic relations with China – including the Philippines – due to the reduction of perceived political risk in dealing with Taiwan. 

From a more strategic perspective, I outlined to President Ma the synergetic impacts and unique opportunities in the emerging Central East Asia Growth Polygon (CEAGPOL) consisting of the Philippines, Taiwan, Hong Kong, Macau, and the major Mainland provinces of Guangdong and Fujian – plus eventually, Hainan, Okinawa, and Guam/Mariana. Real advantages can be exploited from the strategic centrality of CEAGPOL in relation to the huge markets of Southeast Asia and Northeast Asia, and the easy accessibility of major CEAGPOL gateways by sea transportation and air travel – with not more than two hours flying time between them. 

CEAGPOL could be the forerunner – or building block – of the North East Asia version of ASEAN or "ANEAN,’’ meaning the "Association of North East Asian Nations.’’ Long impeded by historical wounds among China, Japan and Korea, economic heavyweight North East Asia is the last remaining regional bloc in the world still without a multilateral, intergovernmental organization of the likes of ASEAN and the E.U. In the case of the latter, their bloody continental wars, and two World Wars over the past four centuries did not deter the European powers from integrating as an economic, political and security union for the purpose of achieving for their people enduring peace and sustainable development. 

SEF Chairman P.K. Chiang, who also addressed the PTBC, reiterated the mutual benefits accruing to said Central East Asia’s economic components – meaning CEAGPOL – resulting from Beijing-Taipei warming up, particularly in the freer movement of people goods and services on both sides of the Taiwan Straits. 

Philippine-Taiwan business meet 

Together with Clark Development Corporation (CDC) senior officials led by Chairman Rizalino Navarro and President Benigno Ricafort, as well as SBMA Senior executives and Carmona Mayor Roy Loyola, we also dialogued with the heads of top Taiwanese companies with interests in the Philippines, notably: Chairman Theodore Huang of the Chinese National Association of Industry and Commerce: Chairman William Wong of Formosa Plastic Group; Chairman Jeffrey Koo, of Chinatrust Bank; and Chairman Tony Chiu of Hocheng Corporation. 

At the main TCSP conference which was attended by 150 business executives from Taiwan’s leading corporations – mostly with overseas operations – I underscored the significance of the Cross-Taiwan Straits Economic Zone (CTSEZ) being strongly promoted by both China and Taiwan, "as the key component in East Asia’s regional integration." I also pointed out that Taiwanese businessmen can access the benefits of the China-ASEAN Free Trade Agreement (CAFTA) – including the China-ASEAN tariff-reduction program (covering 7,000 different commodities) – by tapping into the Philippines (Taiwan’s closest ASEAN neighbor) as the hub of its ASEAN operations and as a marketing conduit for raw materials and component products. 

Both the well-attended PTBC and our special roundtables with business leaders enabled me and the RP delegation members to push our invitation to various Taiwan companies to locate or expand in the Philippines, especially in the Subic-Clark Freeports, the Pangasinan-Tarlac-Zambales cluster, and the Carmona-CALABARZON industrial estates – all of which offer special incentives. 

Please send any comments to fvr@rpdev.org. Copies of articles are available at www.rpdev.org.