Ma Ying-jeou's hard-fought services trade pact with mainland not a done deal

Opposition angry Ma is rushing through a services trade pact that would sweep away restrictions on mainland investment

PUBLISHED : Wednesday, 10 July, 2013, 12:00am
UPDATED : Wednesday, 10 July, 2013, 3:43am

The sweeping services trade agreement signed by Beijing and Taipei last month risks being sent back to the negotiating table if Taiwanese President Ma Ying-jeou cannot overcome stiff resistance in the legislature.

The pact, which would open everything from financial institutions to funeral services to increased cross-strait investment, is generally seen by experts as economically advantageous to the island.

It has nonetheless come under fire from lawmakers - both within and without Ma's ruling Kuomintang who worry about its impact on certain industries and argue they haven't been given time to prepare for the vote.

If any part of the pact is rejected, it would have to be renegotiated, said Taipei's Straits Exchange Foundation chief Lin Join-sane, who's group represents Taipei in talks with Beijing. "This means the two sides would have to restart talks," Lin said, adding that the deal had been subject to two years of negotiations before being signed last month.

The pact was one of several follow-up agreements to the three-year-old Economic Co-operation Framework Agreement that provides a roadmap for expanded trade ties between Beijing and Taipei.

The services trade agreement would, if adopted, would represent the 19th such pact since 2008, when Ma took office and set about improving ties.

The deal would take cross-strait economic bonds to a whole new level, opening 80 mainland services sectors to Taiwanese investors and 64 Taiwanese services sectors to investors on the mainland.

Mainland investors would gain access to, among other things, e-commerce, printing, construction, herbal medicine, waste treatment, restaurants, laundries, beauty parlours, car rental services, funeral services, amusement parks and sports facilities. Taiwanese could be free to invest in those areas and more, including the health, finance, tourism and environmental sectors.

Economically, the pact is viewed as more advantageous to Taiwan than the mainland. But it appears Beijing has offered more market access out of consideration of the relative sizes of the two economies and its overall effort to entice Taiwan on a path to reunification.

But opening such a wide range of services has come under fire from opposition parties and operators in some of the affected sectors, particularly printing, herbal medicine, food service and beauty parlours.

Critics argue the agreement would cost hundreds of thousands of local jobs, hollow out the island's economy and speed up the flight of local talent to the mainland. Opposition parties - led by the pro-independence Democratic Progressive Party - have vowed to block the deal.

Even some KMT legislators are unhappy with what they say was the failure of Ma's government to give them enough time to explain the pact to their constituencies.

Some KMT legislators, such as Speaker Wang Jin-pyng, complain that lawmakers were not given enough information about the pact during the negotiation process.

Ma has called on KMT lawmakers - who have a majority in the legislature - to approve the pact in its entirety during an extraordinary session planned for July 29. But there are concerns it may not pass.

Under Taiwanese law, the legislature has the right to change pacts signed by the government. The DPP is seeking an article-by-article review of the agreement and has threatened to nullify any of the articles it believes would hurt the interests of the people.

Trying to tamp down opposition, Ma has created a task force to examine the pact's possible repercussions. He has promised town hall meetings to sell the agreement and set aside NT$95.2 billion (HK$24.5 billion) to help cushion its impact.

This is not the first time Ma's government has been accused of failing to provide the legislature and business community with adequate information before attempting to enact a sweeping policy change.

Last year, Ma agreed to restart imports of some US beef, only to have legislators claim they had been kept in the dark and reject the plan. The beef imports were eventually allowed after Ma provided KMT lawmakers with more information.