China’s President Hu Jintao (胡錦濤) and Premier Wen Jiabao (溫家寶) have made statements about protecting the interests of Taiwanese farmers, which have been echoed by a hopeful President Ma Ying-jeou (馬英九) and Premier Wu Den-yih (吳敦義).
China’s economic rise has strengthened various Chinese interest groups. In particular, in China’s abnormal system where government and industry are one big family, the interests of businesspeople coincide with the interests of the government and its ministries and agencies. The heads of ministries and agencies have many and complex interests in the industries they are managing, and so they are very careful in how they control these industries.
The economic cooperation framework agreement (ECFA) talks have been deadlocked because of diverging opinions over the “early harvest” list. China’s talk of compromises to promote the interests of Taiwanese farmers seemed like a godsend, but these statements were made during unofficial talks and were not mentioned at the National People’s Congress. It’s clear then that these statements will not become a universal principle that will apply directly to the ECFA talks. Instead, they will remain a political bargaining chip in the hands of the top leadership.
Ma has said that the ECFA talks are similar to other economic talks based on WTO principles. But the fact is Taiwan and China entered WTO under different conditions — Taiwan as a developed nation and China as a developing nation, giving China many more bargaining chips and room to maneuver. Taiwan’s import restrictions on Chinese industrial and agricultural products, for example, violate the WTO’s most favored nation principle. Similar Chinese restrictions on Taiwanese products, however, would be fully compatible with WTO regulations. That is the reason Hu and Wen are talking about offering compromises to promote the interests of Taiwanese farmers and small and medium enterprises.
As for the financial industry, Taiwan must open its doors to Chinese investors, while China can slap unilateral restrictions on Taiwanese investors. Taiwanese financial institutions are hopeful that Beijing will display the same generosity it has said it would give Taiwanese farmers. The reality is Beijing is not going to give Taiwanese banks reciprocal rights in China for fear that other countries will demand the same treatment.
Based on WTO principles, China not only has a lot of room to maneuver, but is also able to play good cop, bad cop by having its negotiators raise high demands and then having the top leadership offer concessions to score political points in Taiwan.
Instead of tackling these issues one by one, the Ma administration chose to lump everything under the ECFA talks, thereby allowing China to control the process. This shows not only a lack of understanding of Taiwan’s situation, but also the same inability to conduct negotiations as the US beef debacle has demonstrated.
Ker Chien-ming is a Democratic Progressive Party legislator.
TRANSLATED BY PERRY SVENSSON
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