Taipei Times: Beijing has already suggested the WTO is not the place to discuss cross-strait issues. Will WTO facilitate the development of closer economic and political ties?
John Deng (鄧振中): We don't know. Whether or not it can improve our economic relations with China really depends upon China's attitude. Taiwan has repeatedly said it wants to follow WTO rules. Our position is to move towards normalization of our economic trade relations. Normalization is a free flow of goods and services. We certainly hope that both sides take advantage of the WTO mechanism and its many written rules. But many scholars and media reports have said Beijing will probably not use the WTO's dispute settlement mechanism with Taiwan. They need to overcome the fear that once they use that mechanism, Taiwan will become equal to them.
TT: Since under WTO rules members must allow the free flow of goods and services, will Taiwan need to make some significant adjustments to its restrictive cross-strait policies at some point?
PHOTO: CHIANG YING-YING, TAIPEI TIMES
Deng: Yes, and there are many areas where both sides have restrictions. Sometimes if you read the newspapers in Taiwan they say all the restrictions are from us and China doesn't have any. But that's not true. They have a large number of restrictions but you just don't know about them. It's not like here where we put our restrictions into law.
Take import licensing for example, which is covered by the WTO. If you remember several months ago a certain company made a statement that annoyed Beijing and it was thereby [denied] an import license.We regularly meet with people who invest in China who tell us about so many measures that violate national treatment, [a basic WTO rule of giving others the same treatment as one's own nationals].
TT: The consensus reached at the Economic Development Advisory Conference (EDAC) was to ease restrictions on links with China. How are measures to implement this consensus progressing?
Deng:
Those conclusions we think can be done now have already been sent to the legislature. For instance the "no haste, be patient," policy. One part of that [means] we have to redesign our system in regard to how to screen applications, including which sectors we want to further liberalize and to what extent we are going to liberalize the capital cap. But that does not involve amendment of laws and the administration can through internal consultation and consultations with industries to develop a new system which first needs to be approved by the Cabinet.
But in the meantime some other areas need to have laws amended, such as double taxation. Investors are taxed in China and then they might also be taxed here. The law is not very clear. That law needs amending so we have already sent the draft to the legislature and we will push to have those clauses approved as soon as possible.
TT: What about companies that went around government rules on China investments and have already established considerable operations in China?
Deng: There are many cases where companies invested in China without going through the proper application process. That left a big gap in our statistics. So we think it is a good time to take advantage of the change in the system to give them an opportunity -- an amnesty -- to report what happened and forgive what they did or forgot to do in the past. That will also require the law to be changed.
TT: In recent weeks lawmakers have been pushing for greater openness in links between Taiwan and China and are working to enact laws that will allow people from the island of Taiwan to visit China via the outlying island of Kinmen. Is their impatience undermining the measured efforts of the government?
Deng: For cross-strait links in any area we first need to have a careful plan and a thorough deliberation process. We find society oversimplifies many of the difficult issues. Pushing hard for immediate results can be applied to our relationship with the US or Britain or Japan, but not with China.
The move by lawmakers is a typical example of that kind of rush. Some legislators think they can use this to force the government to open up this channel and to have all the citizens of Taiwan go through this channel to China. Even if the law is passed, China is still very, very likely to refuse to allow citizens from Taiwan to take advantage of that channel. The reason is they still say the intent of the "small three links" is to replace the "big three links." Our message for the legislature is let's do it gradually, let's open up the gate and see what China's reaction is.
TT: In light of the downturn in the international airline industry, pressure from Taiwan's airlines to open up lucrative routes directly to China has been heavy. With Taiwan maintaining that links must be preceded by talks, how much longer are they going to have to wait?
Deng: As passenger safety is involved, our thinking is that discussions on airlines and direct flights should have the heaviest amount of government involvement in that process. We are talking about very large flight schedules between these two places and how to ensure the safety of passengers -- the safety of airports is vital. That's why we have always said this is the responsibility of the government. This is, of course, contradictory to Beijing's view that airlines should talk amongst themselves and resolve the [issues] themselves. But can they? One might argue that they will do their best out of concern for their reputations. However it's not their responsibility, it's the government that is ultimately responsible.
Additionally, of course there is the political problem that we have to recognize "one China." This is a process of compromise, this should not be one side continuing to insist on "one China" and us having to move to their position. We have always said we can be flexible and creative. So far we really haven't seen any flexibility from China.
TT: But wasn't China's offer of overflights to Taiwanese airlines to avoid airspace near Afghanistan a sign of flexibility?
Deng: The relationship between Taiwan and China is very unique. There is no infrastructure between the two. For instance, if one of our airlines experienced an emergency over Europe our governments could talk to each other. Although they may not recognize us and we may not recognize them, once an incident occurred a channel would be opened. We really hope China can show some flexibility but they give us the impression they are not ready for government-to-government talks. If they had any desire or plan to move things forward they would not stand by their original position.
TT: How can the deadlock be broken?
Deng: One basic thing needs to happen. China must be prepared and willing to talk. I think that's a very basic requirement. But we don't see any signs they are willing to do anything.
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