Wed, Jan 01, 2014 - Page 8 News List

The devil is in details of the trade service pact

By Steve Wang 王思為

If the legislature rushes to review and approve the cross-strait service trade agreement, like President Ma Ying-jeou (馬英九) wants, it will deal a blow to Taiwan’s already stagnant economy.

Many young people currently have a salary of just NT$22,000 a month to look forward to, but if the legislature passes the service trade pact without subjecting it to a substantial review, it will not be long before that figure drops to NT$18,000.

Thanks to the huge scale of the Chinese market and the externalization of costs that has taken place there over an extended period of time, the competitiveness of China’s service industry lies in “social dumping” — the use of cheaper labor than what is typically available, either by using migrant workers or by relocating businesses to an area or country where wages are lower than at the original location.

That means that if Taiwan opens itself to the Chinese service industry, the Taiwanese service sector will suffer badly.


Although the legislature has decided through negotiations to postpone assessing the service trade pact until the next legislative session, there are concerns over whether the review will be transparent and whether the lawmakers’ resolution will be binding for the executive branch. The devil is in the details and those are the details that need to be closely watched.

When it comes to monitoring the inking of agreements between Taiwan and other countries, the legislature is a paper tiger that has been unable to provide any substantive oversight of the government before, during or after the signing.

The executive branch is used to basing its striking of bilateral agreements on the Regulations Governing the Processing of Treaties and Agreements (條約及協定處理準則) and the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (台灣地區與大陸地區人民關係條例).

In practice, as Article 10 of the regulations clearly states — for agreements that do not include a special ratification clause — “The competent authorities shall submit agreements to the Executive Yuan for review within 30 days of signing. After entering into force, they shall then be submitted to the Legislative Yuan ‘for reference,’ unless the content involves state secrets or is diplomatically sensitive.”

In other words, agreements that are not ratified by the legislature are simply submitted by the Executive Yuan to the Legislative Yuan “for reference” after they take effect.

The Legislative Yuan is Taiwan’s highest legislative body. Surprisingly, when dealing with a major agreement like the service trade pact, the Cabinet only passes the pact on to the legislative branch “for reference.”


The public hearings on the service trade agreement are empty formalities, a meaningless political farce.

What Taiwanese really should focus on is how the legislature should go about making a substantial and effective review of the pact.

Perhaps the most urgent task to undertake when dealing with this issue is having the legislature establish a substantial review mechanism for the signing of bilateral agreements. By doing this, it would be able to monitor the executive branch effectively from a political and a legal perspective.

Any delay in conducting a substantial review of the cross-strait service trade agreement is a political smoke screen that will do nothing to help resolve the problem.

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