The Democratic Progressive Party’s (DPP) Central Standing Committee yesterday approved a counterproposal that it said would significantly improve the controversial cross-strait service trade agreement and show that the party is ready for meaningful deliberation of the pact.
The proposal recommends dropping 18 of the 64 categories of services that Taiwan is to open to Chinese investors and further liberalization of 10 of the 80 categories that China is to open to Taiwanese investment.
A collaborative effort of the DPP’s Department of China Affairs, its think tank, academics and business representatives said the proposal is an improvement on the current agreement, as it highlights the principles of reciprocity, fair competition, national security and safeguards to Taiwanese welfare, department director Honigmann Hong (洪財隆) said.
The proposal recommends that some sectors, such as data processing, database services, advertising, agricultural consulting, transportation, cargo services, and printing and publishing, be excluded from the specific commitment list because of concerns over national security and freedom of speech, he said.
Most of the sectors to which the party recommended an adjustment the level of liberalization were due to limited market access, unfair investment regulations or imbalanced market opening, all of which would create unfair competition, Hong said.
For example, China has set limits on the operation of certain sectors, such as the electronic commerce industry, to Chinese-controlled Fujian Province, while Taiwan is to open its entire market for the same sectors, Hong said.
China has also placed unfair restrictions on Taiwan’s cross-border services, with only those companies that invest in China being granted market access, while Taiwan sets no limits on the same Chinese services, he said.
That is why market research, exhibitions, Type II telecommunications, wholesale, retail and banking services should all have reciprocal treatment, he said.
In terms of the main text of the agreement, the DPP recommended two major changes: adding a special clause on state-owned enterprises (SOE) to improve the transparency of such Chinese companies and setting up a trade dispute settlement mechanism under the WTO rather than a tailor-made mechanism across the strait, Hong said.
The current agreement needs to be revised given the huge difference in the two countries’ economic systems and the different commitments they made on their accession to the WTO in 2002, with Taiwan opening up 58 percent of its market, while China only opened 37 percent, he said.