After a series of under-the-table dealings conducted by the Chinese Nationalist Party (KMT), a service trade agreement with China was inked on Friday last week.
The immediate responses of Taiwan’s opposition parties and the public have been focused on what sort of impacts this agreement will have on the nation’s industries. By focusing on the economic side of things, they are totally missing the point that this agreement will have devastating political ramifications for Taiwan.
The name of this agreement itself is one full of political considerations aimed at misleading Taiwanese. Economic agreements between countries are mainly of two types: “trade” and “investment.”
Trade agreements are used in the manufacturing industry, while investment agreements are used mainly in the service sector because services are intangible and most can only be provided on the spot in the target country. Tangible goods, on the other hand, can be produced in one country and then sold overseas.
As a result, this latest cross-strait agreement should be more correctly called a “service investment agreement” instead of a “service trade agreement.”
President Ma Ying-jeou’s (馬英九) administration has no shortage of economic experts and they should be extremely clear about the true nature of this agreement.
The main reason why the government is trying to mislead people is because an investment agreement involves the exchange of people or labor, while a trade agreement involves the exchange of goods only.
To make it even clearer, the real plan behind this service trade agreement is to make it easier for Chinese to move to Taiwan in large numbers.
During these most recent negotiations, the majority of the things that China demanded Taiwan open up were “non-licensed” and “free-to-enter” parts of the service sector, with these including services like hairdressing, food and beverage, the transportation of goods, storage services, publishing and funeral services.
These “non-licensed” parts of the service sector have never been the main focus of international trade talks, mainly because these industries have a low-output value, requiring a relatively low level of skill. Combined with the fact they are labor-intensive, they thus have a minuscule impact on a country’s economic development.
Apart from China, it is very hard to imagine any other country that would demand that the Taiwanese government open up similar parts of the service sector for their nationals to invest in.
So, how is it that these “non-licensed” parts of the service sector became the main focus of this most recent round of cross-strait trade talks?
Once economic consideration is taken out of the equation, all that can be left is mere political scheming.
In the majority of countries, as long as a person has “legal residency status,” they can engage in any “non-licensed” job they want in the service sector.
To be precise, ever since trade started between Taiwan and China, countless numbers of Taiwanese businesspeople have been investing in businesses similar to the “non-licensed” type in China.
Because of the Chinese Communist Party’s “one China” policy, Taiwanese businesspeople do not have any problem when it comes to “legal residency status” in China.
While Taiwanese businesspeople are able to freely enter and leave China, there have been many obstacles to Chinese workers moving to Taiwan.