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Chinese tactics worry US trade group

China's attempts to use trade as a mechanism for undermining the Democratic Progressive Party (DPP) administration is hampering further liberalization and progress toward the normalization of cross-strait trade relations, the US-Taiwan Business Council has warned.

In a statement about China's recent detente with the Chinese Nationalist Party (KMT) and People First Party (PFP), council president Rupert Hammond-Chambers expressed concern that any process to undermine the authority of President Chen Shui-bian's (陳水扁) administration over trade negotiations will result in a political backlash in Taiwan that will slow or even halt incremental trade liberalization across the Taiwan Strait.

Hammond-Chambers said his council welcomes dialogue between China and Taiwan.

However, he noted that the unilateral announcement by the Chinese government that it will offer tariff-free treatment to certain Taiwanese fruit, following the China visits of the KMT and PFP leaders, is aimed at luring away Chen's supporters, such as fruit farmers in southern Taiwan, and planting the seeds of doubt about the DPP's ability to handle cross-strait trade.

While the council welcomes dialogue between China and Taiwan, it is clear that these initiatives are designed to undermine the position of Chen and the DPP, the statement said.

"If the DPP is to proceed with further liberalization in areas such as chip packaging and testing as well as 0.18-micron chip manufacturing, it will require a level of control over the process," it said.

Hammond-Chambers said the administration has become more cautious with regard to economic interactions with China, and will pursue policies to address the seemingly incremental erosion of its authority over cross-strait trade matters.

"The US-Taiwan Business Council believes that normalized trade across the Taiwan Strait will result in reductions in cross-strait political tension, increased efficiencies for Taiwan companies, and therefore price, quality, and time of delivery improvements for the myriad of US companies that participate in the integrated technology supply chain that links the US, Taiwan and China," he said.

"In addition, economic integration should also contribute greatly to bridging the political gap that remains between the two, and offer positive momentum to a relationship that has undergone an extended period of strain," he said.

The US-Taiwan Business Council, which comprises a large network of companies involved in business between the two countries, gives members access to people and information to help them succeed in their endeavors in Taiwan.

When asked for comment, DPP Legislator Hsiao Bi-khim (蕭美琴) said Hammond-Chamber's remarks pinpointed some key problems.

If China keeps bypassing the administration and only conducts talks with opposition parties, China will end up having a negative impact on the liberalization and normalization of cross-strait trade, she said.

Commenting on Hammond-Chamber's remarks, Taiwan Solidarity Union (TSU) deputy caucus convener David Huang (黃適卓) said "a strong Taiwanese government is in the interests of both Taiwan and the US."

PFP caucus whip Hwang Yih-jiau (黃義交) said his party has never sabotaged the government's authority and urged the council to tell the government to attach importance on China's market and "not oppose for the sake of opposition."
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