The signing of the Economic Cooperation Framework Agreement (ECFA) between Taiwan and China was just the start of a wide range of economic and political tasks for the Taiwanese government to overcome and cautiously review, academics said.
Almost all discussions before the signing of the ECFA were focused on the “early harvest list,” which pinpoints sectors that benefit or suffer from the agreement.
The pursuit of a bilateral investment agreement (BIA) and the implementation of the ECFA, however, are now two of the most important issues at hand, said Jack Lee (李允傑), a professor of economics at the National Open University.
The BIA is not a new issue and it’s especially important for Taiwan because signing one with China would not only protect Taiwanese investors and businesspeople in China, where laws and regulations are not frequently respected or implemented, but also attract foreign investment as the BIA would ensure the protection of foreign investors, Lee said.
Moreover, cross-strait business disputes that have led to the filing of complaints with the Straits Exchange Foundation, a quasi-official organization that handles negotiations between Taiwan and China, have increased from 291 in 2007 to 784 last year.
The issue of sovereignty — one of the most sensitive and controversial topics in Taiwan-China relations — would come into play if the sides tried to settle disputes through the WTO, Lee said, adding that the method does not look feasible because it would take too long.
Lee also said that Taiwan’s and China’s goals after the signing of the ECFA are different.
While Taiwan is looking to protect its businesses with investment protection mechanisms, China is eyeing investment promotion, which means Taiwan would need to allow in more Chinese investment.
“Current Chinese investment in Taiwan is less than US$100 million. China wants Taiwan to further open its door, but Taiwan is not ready yet, fearing its national security would be jeopardized and its knowledge would be ‘stolen’ if more Chinese investment came in,” he said.
If these concerns can be resolved by putting every detail down in writing, Lee said Taiwan would be able to attract more foreign investors by allowing more Chinese investment.
William Lin (林蒼祥), a professor of finance at Tamkang University, said Taiwan’s plan to develop its service sectors in China would likely hit a snag in the financial and air transport industries.
“Financial service is such a sensitive and complicated sector that it’s difficult to open to foreign investment in any country,” Lin said.
“And Taiwan’s businesses have been disappointed at China’s unwillingness to open its air transportation market so far,” Lin added.
Chang Wu-yueh (張五岳), a political scientist at Tamkang University, said that politically, the “success” of ECFA negotiations reduces cross-strait tensions and lays the foundation for more exchanges, but it doesn’t mean both sides are ready to engage in a comprehensive dialogue, especially a political one.
“In cross-strait negotiations, some see business opportunities and some see more than 1,300 missiles directed at Taiwan. The real answer probably lies somewhere in between,” Chang said.
He advised the Taiwanese government to assess China’s mindset and goals in bilateral exchanges using a three stage framework: the period when the ECFA was signed; the time between the ratification and implementation of the deal up to the 2012 presidential election; and after 2013, when Chinese President Hu Jintao (胡錦濤) has retired and handed power to his successor.
Taiwan’s China policy has always been controversial and partisan domestically. That is why support for bilateral political talks is far weaker than for trade talks, Chang said.
Moreover, he said, the results of more bilateral trade exchange have not yet trickled down to benefit the general public, nor have they boosted Taiwan’s economy.
Chang said that with people growing impatient, key factors to help the Taiwanese government win support for future negotiations include its success in landing more free-trade agreements with major trading partners, boosting GDP growth, lowering the unemployment rate and bridging the wealth gap.
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