Sat, Jul 06, 2013 - Page 3 News List

SERVICES PACT: INTERVIEW: Government should halt implementation of pact: expert

National Taiwan University economics department chairwoman Jang Show-ling called on the government to suspend the newly signed cross-strait service trade agreement in an interview with ‘Taipei Times’ staff reporter Helen Ku. Jang said the feasibility of opening Taiwan’s market comprehensively to Chinese investors should be re-evaluated because it could bring more harm than benefits to local companies

National Taiwan University economics department chairwoman Jang Show-ling gestures during an interview with the Taipei Times on June 30.

Photo: Wang Min-wei, Taipei Times

Taipei Times (TT): To promote the service trade agreement with China, the government recently launched a series of forums to help the public understand how it handled the negotiations on the pact. How do you interpret this move?

Jang Show-ling (鄭秀玲 Jang): The government mainly consulted and exchanged opinions with large enterprises in the banking, construction and e-commerce sectors. However, the government did not consult with small and medium-sized companies in the service sector, which could be most affected by the pact. That is why the government now has to ease the public’s concern about the impact of the agreement.

Apparently, the government did not side with the “small” number of local companies and did not take their needs into consideration. The government failed to prove it is capable of safeguarding local businesses’ interest.

It might be right for the government to help enterprises break into new markets, but it is unacceptable that this comes at the expense of small companies’ interests. The government should at least come up with effective support measures to minimize the potential adverse impacts of opening up to Chinese investment.

The government needs to renegotiate with China over terms of the pact, or the agreement should be reassessed rule by rule in the Legislative Yuan to let legislators determine whether the public can embrace such pact or not.

TT: Do you think the government failed to communicate with local service providers while preparing to sign the agreement? Why is the public concerned about the pact?

Jang: It was a norm for government officials to visit local industry unions to collect suggestions before signing any trade agreements. The government did so in 2001 when vying the join to the WTO and inking the Economic Cooperation Framework Agreement in 2010 [ECFA].

This time, however, things were different. Officials from the Ministry of Economic Affairs, the Council for Economic Planning and Development, and the Mainland Affairs Council acted like typical bureaucrats, following every order from their superiors in order to sign the pact on time without thoroughly evaluating or discussing with industry representatives.

TT: In your opinion, what is the biggest problem of the pact?

Jang: Small and medium-sized enterprises make up the majority of Taiwan’s service sector. Currently, there are 935,000 enterprises in the service sector, and service providers that require manual labor account for up to 86 percent, which shows how the pact might dramatically affect local service providers’ job security because Chinese investors might create job openings for low-entry positions at a low wage rate as they do in China.

From a different perspective, given that there are more than 5 million people — accounting for 58 percent of Taiwan’s total workers — working in the service sector, flow of funds, knowledge and labor could harm the economy. The adverse impact could be huge as the output of services accounted for nearly 70 percent of the nation’s GDP last year.

TT: What kind of outcome do you foresee if the pact takes effect?

Jang: The people who will benefit from the agreement are mostly professionals in the financial, telecommunications, accounting, construction and medical sectors.

Given that their services require knowledge, doctors, accountants or civil engineers can find employment and business opportunities in China.

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