The contentious cross-strait service trade agreement is still being debated back and forth, with the governing party and the opposition all voicing their own take on the issue, each having their own agenda. Meanwhile, the public remains confused as to exactly what the repercussions of signing the agreement will be.
The Chinese Nationalist Party (KMT) insists that the advantages of the pact outweigh the disadvantages and that it is a remedy that will inject some life into the nation’s moribund economy.
The opposition, on the other hand, argues that the composition of the pact remains unclear, that the potential side effects are not inconsiderable and that swallowing this pill will drive the economy to sink further into malaise.
With the recent controversy over allegations of improper lobbying by the legislative speaker, the passage of the agreement in the legislature has become even more problematic.
To facilitate its passage, the branches of government involved will have to be mindful of the need to improve communication and reciprocity between themselves.
Following intense media coverage and a concerted public relations exercise by the government over the past few days, certain sectors of the economy that have been led to believe that the agreement will offer more business opportunities — finance, e-commerce, entertainment, information technology and medical treatment — are naturally quite keen for it to be passed without delay. However, there has been less discussion on the extent of the negative impact on sectors that might be directly hit by the agreement, or what preparations — such as subsidies, low-interest loans to finance industrial upgrading, skills training for those wanting to move into other sectors — the government has in place to mitigate this impact.
Regarding these sectors, most of the talk has centered around how the government will deal with the situation and how it has set aside a budget of close to NT$100 billion (US$3.38 billion) for that purpose. However, there seems to be little sincere willingness to address the problem head on.
The assessment report on the effect of the agreement only deals with the estimated impact on the economy as a whole and does not touch on the impact on specific sectors.
This does little to assuage the concerns of the many businesspeople who are worried about the implications of the agreement.
The government has been keen to point out that many of the 64 sub-sectors Taiwan has agreed to open up to China as part of this agreement — such as wholesale, retail, manufacturing and textiles — were already included in the list of sectors open to Chinese investment that the Ministry of Economic Affairs announced in 2009 and that the number of Chinese enterprises that will come to Taiwan to invest, and the amount of investment that they are likely to make, is of no real cause for concern.
The trouble is there has been much water under the bridge since then.
At the time, the deregulation only applied to Chinese investors coming to Taiwan, not the other way around, with a raft of restrictions in place, such as investment being confined to current industries, Chinese investors not being permitted to hold more than 50 percent or to have a controlling stake and the need for specialist reviews of industrial cooperation strategies.