Four Democratic Progressive Party (DPP) lawmakers on Thursday voiced concern over the government’s headlong rush to sign a service trade agreement with China. Their questions followed a confidential briefing for the legislature’s Internal Administration Committee about the progress in negotiations. While the lawmakers could not discuss what they were told in the meeting, the concerns they raised are valid ones — and the government needs to provide answers.
Unfortunately, it looks like President Ma Ying-jeou’s (馬英九) administration is planning to present the trade services pact as another fait accompli, with little input from lawmakers, let alone the public. While the government may try to veil the proposed pact as simply another follow-on agreement to the 2010 Economic Cooperation Framework Agreement (ECFA), a service trade deal will really hit the economy hard, since the service sector accounts for 68.76 percent of the nation’s GDP, according to the Executive Yuan’s Republic of China Yearbook 2012.
DPP Legislator Chen Chi-mai (陳其邁) put the figure even higher, saying the service sector accounted for 73 percent of GDP and 58 percent of workers in the private sector.
The lawmakers said the Ministry of Economic Affairs officials delivering the briefing claimed Taiwan would be a winner in the negotiations, because China has promised to open up 65 service categories, against the 55 offered by Taiwan, but the officials did not provide any data or numbers to back up their claims. More worrying was the officials’ admission that the agriculture and manufacturing sectors could expect “a certain degree of negative impact.”
While agriculture only accounted for 1.75 percent of GDP, manufacturing contributed almost 30 percent, according to the yearbook. So, “a certain degree of negative impact” would affect portions of the economy that account for more than a quarter of GDP. That is certainly a number that requires greater oversight of any competition that could affect it.
It is also crucial for the ministry and negotiators to inform both lawmakers and the public just what service types they are talking about for the proposed pact. Usually service trade sectors include the business, professional and technical sector (including advertising, accounting and consulting); travel; finance; legal; and education. Former Straits Exchange Foundation (SEF) chairman Chiang Pin-kung (江丙坤) mentioned medical services and the film industry in September, when he said he hoped the pact could be signed by the end of that year. Agriculture and manufacturing do not usually get added to the mix, so it seems curious that they were brought up.
China’s record when it comes to opening up its service sector should serve as a cautionary tale for Taiwanese negotiators. As Tung Chen-yuan (童振源) and Lin Yu-lung (林佑龍) noted in an opinion piece in this newspaper in December, China has shown greater willingness to open up its bilateral trade in services to Hong Kong and Macau by 10.1 percentage points (and a total of 80 sectors), although it has only done so to other nations by 2.5 percentage points. Judging by the limited information that has come out so far, it appears that Taiwan will not fare as well as Hong Kong and Macau, but perhaps marginally better than some other nations.
It all comes back to the smoke-and-mirrors show that the Ma administration has put on since it first embarked on negotiations for the ECFA deal — promising much, keeping the details secret until after the ink has dried and then delivering little. The government still continues to tout the ECFA as a stepping stone to free-trade agreements (FTAs) with other countries, but almost three years later they have nothing to show for it. Feasibility studies on trade pacts, as are under way with India and Indonesia, do not cut much ice. Negotiations with Singapore are now in their second year, and officials keep promising an FTA “in the near future.”