Strong Taiwanese opposition to the cross-strait service trade agreement has slowed down the pace of negotiations on further economic exchanges between Taipei and Beijing, the Ministry of Economic Affairs (MOEA) said yesterday.
In June, Taiwan and China signed the service trade pact in Shanghai, considered the most significant economic accord signed between the two sides since the landmark Economic Cooperation Framework Agreement (ECFA) was inked in 2010.
After the service trade agreement was reached, both sides continued negotiations under the ECFA, with the aim to conclude talks and potentially sign a product trade agreement by the end of this year.
However, the service trade pact has faced strong resistance from opposition political parties, including the Democratic Progressive Party, and was not approved during a special session of the Legislative Yuan, which ended on Friday last week.
Academics and business leaders have also voiced fears that the pact would have a negative impact on local service businesses and hurt the local job market.
Under the service trade pact, Taiwan has agreed to allow China to run businesses in service sub-sectors including printing, car rental, cargo transportation, gondolas, beauty parlors and salons, online gaming and funeral services.
Meanwhile, Beijing agreed to open sub-sectors including e-commerce, printing, hospitals, construction and transportation to Taiwanese investors.
Officials from the MOEA said that due to the stiff resistance against the trade pact, negotiators on the product trade pact have proceeded more slowly than expected, and simply focused on technical issues.
The officials said talks on the product trade agreement are more complicated than negotiations on the service trade pact, as the product trade agreement involves tariff reductions for more than 8,000 items. They added that the government needs more time to communicate with local enterprises.
However, they said the government is maintaining its goal to complete the talks on the product trade agreement by the end of this year.
Chung-Hua Institution for Economic Research President Wu Chung-shu (吳中書) said the service trade pact, still pending in the Legislative Yuan, is the equivalent of a free-trade agreement, adding that the trade pact is expected to bring more benefits than harm to Taiwan in the long run, although it could fail to produce significant immediate effects in the short term.
China’s Taiwan Affairs Office Director Zhang Zhijun (張志軍) said he cannot understand why the service trade agreement has not been well received in Taiwan, adding that Beijing has shown good faith in opening its markets.
Zhang said he hopes the service trade agreement will be ratified by Taiwan’s lawmakers and take effect as soon as possible so that Taiwan will be able to seize the opportunity to gain easier access to the huge Chinese market.
Critics of the deal say there was a lack of transparency in its negotiation process and expressed concerns that it would promote a “one China” market because of the free flow of investment, personnel and products across the Taiwan Strait. Operators of affected industries in Taiwan also lambasted the government for not consulting with them in advance.
On July 31, publisher Rex How (郝明義) resigned as a national policy adviser to President Ma Ying-jeou (馬英九) over the way the president had dealt with those who oppose the agreement by saying they had deliberately fabricated rumors.
Ma was “derelict in his duty” because he did not take seriously criticism of the agreement, which could deprive people of their property and livelihood, and failed to conduct an assessment of the impact of the agreement on the nation’s economy, society and security before it was signed, How said.