Tue, Dec 29, 2009 page3

• ANALYSIS: Breakdown in cross-strait talks highlights problems

  WEAK HAND Pressure by Taiwanese businesses based in China, added to a poor negotiating approach, could spell trouble for Taiwan in future talks, analysts say

  • By Ko Shu-ling / STAFF REPORTER
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  The breakdown of negotiations on a tax agreement last week highlighted the government’s long-standing problems with backroom decision-making and poor communication, analysts said.

  While both sides are set to negotiate an economic cooperation framework agreement (ECFA) next year, analysts were concerned that Taiwan might have to pay a bigger price next time around.

  The two sides had planned to sign four agreements during last week’s cross-strait talks on fishing crews, quality checks and quarantine of agricultural products, standardization of industrial products and double taxation. Talks on double taxation, however, were dropped because of “technical problems.”

  This marked the first time that an issue placed on the agenda for a cross-strait meeting was not signed. Both sides have held four rounds of high-level meetings since President Ma Ying-jeou (馬英九) took office in May last year and have signed 12 agreements and one consensus.

  Government agencies and officials offered different theories for the stalemate in negotiations.

  The Ministry of Finance said it was mainly the result of a dispute over levying income tax on China-based Taiwanese businesspeople according to where they reside or where income is earned. Meanwhile, Premier Wu Den-yih (吳敦義) said the deal was delayed because the treaty would have treated Taiwan on equal footing with Hong Kong.

  Some said it was because of strong opposition from China-based Taiwanese businesspeople who feared the accord would compromise their interests.

  Tung Chen-yuan (童振源), a professor at the Graduate Institute of Development Studies at National Chengchi University, said it was hard to tell with certainty what caused the breakdown in negotiations because the administration did not release all the information.

  He nevertheless said that it was a “good thing” that the government was willing to stop the process when it encountered problems. The incident also highlighted the manner in which the administration handles negotiations: poor planning and bad communication, he said.

  While the two sides agreed to place an ECFA on the agenda of the next round of cross-strait talks next year, Tung said he suspected Taiwan would be forced to make concessions both on the economic and political fronts because the administration looked desperate at the negotiation table.

  “China is accumulating its bargaining chips so it can negotiate from a position of strength,” he said.

  Tung pointed out three mistakes the Ma administration made before the negotiations on the proposed pact began.

  First, Ma expressed his strong desire to sign an ECFA and said it must be done as soon as possible. It put Taiwan in an unfavorable position because China could easily make demands.

  Second, the Ma administration revealed its bottom line by not allowing more imports of Chinese agricultural products and workers.

  Finally, the government unveiled its “early harvest” list, which again underscored its bottom line, Tung said.

  Compounding the problem was the administration’s reluctance to communicate with the public, the opposition and even the other ruling party members, Tung said, adding that Ma announced his intention to sign an ECFA before any assessment had been conducted.

  Another example of the government’s lack of communication was the relaxation of restrictions on US beef, Tung said. The government not only did a poor job in rolling out the policy, but also coerced the public into accepting the deal despite a public outcry.

  Another example was the signing of the three financial memorandums of understanding (MOU), Tung said. While Financial Supervisory Commission Chairman Sean Chen (陳冲) remained silent on the details of the MOU at the legislature, a few hours later he unexpectedly announced that the commission had completed the signing with its Chinese counterpart via a document exchange.

  Tung said he suspected China would make more concessions in the end, because its strategic goal was to use Taiwan’s economic reliance to attain the goal of unification.

  “But what will Taiwan have to pay in return? That’s what we should worry about,” he said.

  As the two sides could soon launch negotiations on an ECFA, Tung said Ma should debate the matter with Democratic Progressive Party Chairperson Tsai Ing-wen (蔡英文). Tung also proposed to put the deal to a vote, either before it is signed or afterwards.

  Tung Li-wen (董立文), a professor at the Graduate School of Public Security at Central Police University, said last week’s talks were nothing but theater.

  He said that Legislative Speaker Wang Jin-pyng (王金平) revealed that Wu had told him one week before the talks that the two sides were likely to sign only three agreements.

  However, the government kept the public in the dark and continued to promote the four deals.

  “It is pure humbug,” Tung Li-wen said. “I don’t think the premier or legislative speaker would lie about anything like that.”

  He said the collapse of the negotiations was the result of a backlash among China-based Taiwanese entrepreneurs who did not want to see their interests jeopardized. Another possibility is that the government was unsure about the effect of the deal and opted to delay it.

  Tung Li-wen said the breakdown in negotiations was a symptom of the government’s backroom operations, which also highlighted its slipping grip on cross-strait negotiations.

  Beijing, on the other hand, has increasingly dictated the agenda and set a timetable for when to sign and whether to implement, Tung Li-wen said.

  On an ECFA, Tung Li-wen said he worried that the government would play the same trick again and deceive the public as it did on the tax agreement.

  While the Ma administration said it wanted to seal the deal next year, he said he suspected it would take a slow approach because it was not sure whether the trade pact would improve Taiwan’s economy and prevent the country from being marginalized as it claims, he said.

  Lee Yeau-tarn (李酉潭), a professor at National Chengchi University’s Graduate Institute of Development Studies, said he had no problem seeing Taiwan increase its engagement with China, but the Ma administration must bear in mind that China is an authoritarian regime who has a clear political agenda of annexing Taiwan.

  Democracy should be Taiwan’s best bargaining chip at the negotiation table, Lee said, but the government does not seem to fully comprehend the power of the opposition, the public and the legislative branch.

  “For Beijing, Taiwan is an affliction that gives it a lot of pain,” he said.

  To sign an ECFA is strategically sound, but the preconditions the government has set and its attitude are problematic, he said.

  “Facing regional economic integration, it is not a matter of whether Taiwan should sign the accord, but how to strike the best deal,” he said. “Doing this will require a wise statesman who strives for a better position for Taiwan.”

  Lee said the governing and opposition parties must sit down and talk, put differences aside and place the national interest before their own.

  Lee said Ma might have a mind to protect Taiwan’s interests, but he hoped the president would also look at the complicated relationship between his party and the country with clarity.

  There is a chance that his reform efforts will cost his re-­election, but if he loses the courage and wisdom to push on, the problems will be more serious, he said.

  “It is up to Ma to decide whether the national interest outweighs his personal ones,” he said.
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