Taiwanese President Ma Ying-jeou called for progress to be made in the legislature regarding cross-strait bills. Photo: Reuters

Beijing ‘freezes’ cooperation talks with Taiwan over stalled trade pact

Taiwan confirms Beijing freeze on talks while protests delay legislature's ratification of pact

Beijing has held off on further co-operation talks with Taiwan in a sign of growing displeasure over the island's delayed ratification of a services trade agreement signed last June.

Woody Duh, Taiwan's deputy economics minister, confirmed yesterday that since April the mainland had not scheduled any negotiations with Taiwan over a merchandise trade agreement that was supposed to be signed at the end of this year.

"It is not surprising for the mainland to adopt such a 'wait-and-see' attitude" given the delay, Duh conceded at a meeting of the legislature.

The merchandise trade agreement and services trade pact are follow-ups to the Economic Framework Cooperation Agreement - a semi-free trade pact - signed by the two sides in 2010.

Taiwan's legislature was supposed to ratify the services trade pact within six months of its signing last June but demonstrators have objected to the agreement on the grounds that it would lead to serious job losses. They also argue closer ties with Beijing pose a threat to the island's democracy.

Frustrated as it is, the mainland is unlikely to stop talks altogether
Professor George Tsai Wei

On March 18, students started a three-week occupation of the legislative chamber to protest at what they said was the government's failure to consult the public before it signed the pact. Demonstrators demanded its withdrawal and the passing of a new law to increase scrutiny of future cross-strait agreements.

The media and pundits said the scale of the opposition meant it would be difficult for the legislature to pass both the services trade pact and the new legislation before the end of this year.

"The Democratic Progressive Party is expected to do all it can to block the services trade pact and make sure the new law is as strict as possible," said Hsu Yung-ming, an associate professor of political science at Soochow University.

If the legislation is not approved, it would effectively mean the two sides would be unlikely to sign any more cross-strait agreements. Analysts said the logjam explained why the mainland had put further talks on hold, including negotiations regarding the aviation, tourism, shipping and postal service sectors.

"But frustrated as it is, the mainland is unlikely to stop talks with Taiwan altogether, given Xi Jinping's directives to expand all levels of contacts and talks with Taiwan," said George Tsai Wei, a professor of political science at Chinese Culture University in Taipei. He said Beijing might be forced to use both carrots and sticks to achieve a breakthrough in the deadlock.

Duh told legislators the mainland had not stopped all negotiations with Taiwan, but did not elaborate further. He urged the legislature to quickly approve the services trade pact and the new law to increase scrutiny of future agreements to avoid delaying follow-up talks on the merchandise trade deal.

The legislature will hold an extraordinary session from Friday to review the services trade pact and the draft bill to increase scrutiny of future cross-strait.

Taiwanese President Ma Ying-jeou, whose government has signed 20 non-political cooperation agreements with the mainland since 2008, called for more progress to be made.

This article appeared in the South China Morning Post print edition as: Frustration over slow progress on free-trade deal