Mon, Nov 30, 2009 page3

• FEATURE: Cross-strait detente fails to impress firms, academics

  • By Ko Shu-ling / STAFF REPORTER
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  Before his visit to Taiwan last November, Association for Relations Across the Taiwan Strait (ARATS) Chairman Chen Yunlin (陳雲林) apologized in Beijing for the panic that spread among Taiwanese consumers two months previously after China had admitted that a shipment of 25 tonnes of milk powder in June last year contained traces of the industrial chemical melamine.

  Following the talks, both sides signed four agreements addressing direct sea links, daily charter flights, direct postal services and food safety.

  At the time, Union Chemical Industrial Corp had high hopes of receiving compensation from its Chinese suppliers of creamer and milk powder. A year has passed and the company says it has given up hope of compensation.

  Twelve Taiwanese firms have asked for NT$700 million (US$21 million) in compensation from Duqing, the Chinese supplier of the contaminated non-dairy creamer, and from Sanlu, the now-bankrupt dairy firm that also sold melamine-contaminated milk powder.

  So far, China has not responded to Taiwan’s requests for compensation.

  A Department of Health (DOH) document obtained by the Taipei Times showed that the DOH filed a request for compensation on Dec. 26 last year via the Mainland Affairs Council (MAC) and the Straits Exchange Foundation (SEF).

  On July 28 this year, the DOH asked the SEF to relay a letter to ARATS asking it to find out how local Chinese governments involved in the case had handled their compensation requests and to agree to issue compensation to Taiwanese importers even if the levels of melamine in the products did not exceed China’s standards, but exceeded Taiwan’s.

  The DOH also provided related information, hoping that the SEF and ARATS would urge Chinese suppliers to take responsibility.

  The SEF sent the letter on Aug. 17, but China has yet to reply.

  Lin Ching-lien (林金聯), a manager at Union Chemical, said the company’s losses had been estimated at about NT$10 million, including the costs of storing and destroying the contaminated products.

  Lin said the firm originally thought it would be able to return the products and obtain refunds, but the firm was asked to destroy the products. They were banned from selling the products as fertilizer because that would have violated the Act Governing Food Sanitation (食品衛生管理法), he said.

  “There is nothing we can do,” he said. “Our government does not seem to be doing enough for us.”

  Another manager at the company, who preferred to be identified as Mr Chang, said it was not worth saying anything about the issue.

  “If the government can only handle things this way, is there anything else we can do?” he said.

  Democratic Progressive Party (DPP) Legislator Tien Chiu-chin (田秋堇) has been tracking China’s handling of the melamine controversy. Chen Ming-sheng (陳明生), an assistant to Tien, said most companies that fell victim to melamine-contaminated products have given up hope of compensation and decided to keep quiet.

  “They hesitate to be vocal about their losses because they don’t want to put their credibility on the line again,” he said. “Besides, it takes time, money and effort to take their case to court.”

  Taiwan and China have signed nine agreements and a joint statement since President Ma Ying-jeou (馬英九) took office in May last year and made aggressive efforts to resume bilateral talks.

  In June last year, both sides agreed to weekend charter flights and raised tourist quotas, one of Ma’s campaign promises. Ma promised to allow 3,000 Chinese tourists per day in the initial stages, with the number increasing to 10,000 per day within four years.

  Statistics made public by the Tourism Bureau, however, show a different story.

  While the government wanted to see the number of Chinese tourists increase to 3,000 per day this year, the average is only 1,300. Taiwanese tourists visiting China number 11,987 per day.

  While the government hoped to see Chinese tourists generate revenues of NT$60 billion in the first year, the figure was recorded at NT$32.8 billion.

  Apart from food safety, the Ma administration hoped to see daily charter flights generate business opportunities of NT$1 billion per year. Statistics from the Civil Aeronautics Administration show that the volume of goods transported last year at Taiwan Taoyuan International Airport contracted by 7 percent, while the volume of goods transported at Kaohsiung International Airport contracted by 11 percent.

  Between January and August this year, the number of flights from the country’s airports fell by 11.14 percent, the number of passengers fell by 7.01 percent and volume of goods transported dropped by 24.19 percent.

  In June this year, the two sides signed three agreements on the launch of regular cross-strait passenger flights, financial cooperation, as well as mutual judicial assistance and cross-strait cooperation on fighting crime. A consensus was also reached on opening Taiwan to Chinese investment.

  As of May this year, China-bound investment amounted to US$77.1 billion, Investment Commission figures showed. Unofficial figures, however, placed it between US$150 billion and US$200 billion.

  Statistics from the Investment Commission showed that Chinese investment in Taiwan had totaled just NT$189 million since the measures were implemented. Even Premier Wu Den-yih (吳敦義) said there had been “a gap” between the actual amount and the anticipated figure.

  Meanwhile, six months after judicial assistance and joint efforts to fight crime were implemented, only five out of 85 fugitives wanted by Taiwan have been sent back. None of them white-collar criminals.

  The fourth round of talks are scheduled to be held in Taichung City next month. Both sides have agreed to “exchange opinions” on an economic cooperation framework agreement (ECFA) during the upcoming talks.

  Lin Cho-shui (林濁水), a former DPP legislator turned political commentator, said the past year has proven that the Ma administration’s economic and cross-strait policies were a “joke.”

  “Their theory is based on the concept that China is a rising giant and as long as we take full advantage of the Chinese market, we don’t have to worry about the impact caused by the global financial crisis,” he said.

  As the Ma administration seeks to sign an ECFA with Beijing, Lin said he expected Beijing to continue to block other countries from signing free-trade agreements (FTA) with Taiwan. That would further marginalize Taiwan and lure it into China’s trap.

  Lin Kien-tsu (林健次), a professor at Tamkang University’s Graduate Institute and Department of International Trade, said the agreements and consensus signed over the past year have showed the government’s inadequacy when negotiating with Beijing.

  “The administration seems to be trapped in a tangled web. They have no idea where the bottom line is and what the best alternatives are,” he said.

  Lin Kien-tsu urged the administration to sign an FTA with the US and Japan in tandem with the ECFA.

  Tu Jenn-hwa (杜震華), a social science professor at National Taiwan University, said while he agreed an ECFA would make Taiwan more dependent on China, he did not think economic reliance would lead to political integration.

  “Taiwan is not the only one [country] depending on China. The whole world is,” he said.

  Tu said it would take more time to see concrete results and that the Ma administration must map out supplementary plans to go with the accords.
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