The ninth round of cross-strait trade in goods agreement talks took place in Taiwan on Wednesday. The date was clearly chosen to avoid legislative oversight and to prevent legislators from arranging to first have officials submit a report to the legislature, which is only set to be in session beginning today.
In the free-trade agreement (FTA) talks between China and South Korea, the two parties only reached a partial agreement during the seventh round of talks when it was decided that the liberalization goal — zero import taxes — should mean that 85 percent of the trade amount and 90 percent of tariff items should be tax exempt before talks could start on lowering taxes on individual items. They have now reached the 12th round of talks.
What about Taiwan? Minister of Economic Affairs Woody Duh (杜紫軍) has said that the government is trying to obtain lower taxes on petrochemical products, flat panels, machine tools and cars, while China wants Taiwan to lower taxes on agricultural products, steel, clothing and primary industrial products.
How large a proportion of the expected liberalization goals for the trade in goods agreement should be tax exempt? What proportion of Taiwan’s agricultural and industrial products would suffer as a result of the impact from Chinese products? Why not announce the agreement as was done with the FTA between China and South Korea? How far should the cross-strait economies be integrated? Should it be a lower level of integration than the 85 percent between China and South Korea over a 20-year period, or should it be the all-out integration of the two economies mentioned in the communique issued after one of the meetings between former vice president Lien Chan (連戰) and former Chinese president Hu Jintao (胡錦濤)? In which direction does the Ma administration plan to take Taiwan’s economy? The public has a right to know.
According to the Chinese-language Commercial Times, the deputy head of the Chinese Ministry of Commerce’s Department of Taiwan, Hong Kong and Macao Affairs, Sun Zhaolin (孫兆麟), said in late October last year that “seven rounds of official talks have been held on the cross-strait trade in goods agreement, and we are progressing in the right direction. The two parties have already agreed on several technical issues such as product scope, liberalization goals and tariff reduction models.”
The Democratic Front Against the Cross-Strait Trade in Services Agreement immediately demanded that the Straits Exchange Foundation and the Mainland Affairs Council follow in the footsteps of China and South Korea and announce the agreement. However, the official response was a denial of such an agreement. So, was Sun lying?
According to the Chinese-language Liberty Times — the Taipei Times’ sister newspaper — Duh, then-vice minister of economic affairs, said in late February that when it comes to tax exemption, “the two sides are exchanging opinions about their goals, but it is difficult to agree on a number.”
It is incomprehensible that Taiwan refuses to announce its liberalization goals and expected tax exempt ratio before entering negotiations when China and South Korea were able to do it during their FTA talks.
If Taiwan and China have different liberalization goals and are unable to reach an agreement, then the government should announce the goals proposed by each party and a list of the products for which China wants Taiwan to lower taxes. If it does not, there is reason to suspect that this is just another opaque “black box” negotiation.
Lai Chung-chiang is convener of Cross-Strait Agreement Watch.
Translated by Perry Svensson
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