Background Information
The agreement itself
April 11th, 2014 -- The Cross-Strait Trade in Services Agreement is a follow-up pact under the Cross-Straits Economic Cooperation Framework Agreement (ECFA). Its purpose is to reduce or eliminate restrictions on trade in services, and expand market and business scope for service suppliers. Implementation of the accord will help Taiwanese service suppliers enter the mainland Chinese market with preferable treatment.
Under the agreement, mainland China allows Taiwan access to 80 subsectors, compared to 64 in Taiwan for mainland China —many of which were in substance opened already. Taiwan will enjoy more favorable access to the mainland Chinese market than other WTO members, but none of the subsectors opened to mainland China will exceed WTO standards. The claim that this is an “unequal treaty” is unsubstantiated.
Domestic review process
Since the agreement was signed in June 2013, the Legislative Yuan has held 20 public hearings on it. The Ministry of Economic Affairs, Mainland Affairs Council and related agencies have jointly organized more than 110 forums with 46 industries and 264 business leaders, while relevant agencies have briefed the Legislative Yuan three times. Clearly, the review process for the agreement has not been a “black box operation.”
When the agreement was sent to the Legislature, the ruling and opposition party caucuses agreed to an itemized review and vote. However, opposition party legislators acting as committee chairmen ignored calls by ruling Kuomintang lawmakers to hold meetings and begin the review. When KMT legislators had their turn as chair and put the agreement on the agenda, opposition lawmakers forcibly occupied the podium to prevent any committee action. As a result, the pact has been stalled in the Legislative Yuan for nine months.
On March 17, a KMT committee chairman declared the agreement passed in committee. This was the action that sparked off the student protest. The KMT caucus has publicly apologized for the procedural flaws in sending the services pact to the floor, and agreed to return it to committee for article-by-article review.
Opposition lawmakers have continued to disrupt legislative operations, however, preventing KMT legislators from entering the committee room and paralyzing all action on the agreement.
Protests
Students illegally occupied the legislative chamber March 18 in a protest over the services pact, paralyzing the operations of the Legislative Yuan, and remaining in the chamber for more than three weeks. On March 23, protesters forcibly entered and occupied the Executive Yuan, destroying public property and disrupting government administration. As the Executive Yuan is the administrative nerve center of the government, it was necessary to use police power to remove the protesters.
The actions taken by the police were no different from those used in any democratic country. Claims by some protesters and critics that the eviction was a “bloody suppression” are gross distortions of fact. The police exercised all possible restraint. Those sustaining minor injuries in the incident included both protesters and police officers.
While some protest supporters have described the students’ actions as “peaceful, reasonable and rational,” it is hard to imagine any democratic country tolerating the occupation of its legislative and executive offices. The demonstrators forced their way into government buildings, and damaged much public property both in the process of entry and through their prolonged occupation. They also broke into government computers and files. Repair costs will be very substantial.
The students withdrew from the legislative chamber on the evening of April 10, though some protesters remain outside the Legislative Yuan.
Government response to demands
The government has heeded protesters’ demands in a positive manner. The ruling Kuomintang caucus in the Legislative Yuan has agreed to return the agreement to committee for article-by-article review. The Executive Yuan has submitted a draft oversight mechanism for cross-strait negotiations to the Legislative Yuan. The Executive Yuan is also assessing the holding of a national conference on economic and trade affairs.
The proposed oversight mechanism incorporates four stages: (1) during the process of issue formation, when the content of an agreement is taking shape; (2) communication among relevant agencies during negotiations; (3) reporting to the Legislative Yuan on the principal contents prior to the signing of the agreement; and (4) after the signing, disclosure of detailed information deemed sensitive in the preceding stages.
The oversight mechanism encompasses internal communication among administrative agencies, interaction between the legislative and executive branches, monitoring by the Legislative Yuan, communication with relevant groups, and explanations to the public.
President Ma Ying-jeou has also repeatedly offered to discuss the matter with students at the Presidential Office in an open, public manner without preconditions.
On April 7, President Ma affirmed the protesters’ decision to withdraw from the legislative chamber. Pointing out that opinion polls show a majority of the public favors speedy passage of the oversight mechanism along with simultaneous article-by-article review of the services pact, Ma called on Legislative Yuan President Wang Jin-pyng and lawmakers across party lines to respond to the people’s will by enacting the mechanism as soon as possible within the current legislative session.
President Ma also urged opposition legislators not to obstruct itemized committee review of the services agreement, given that such a procedure was agreed on by the ruling and opposition caucuses, and was the initial demand made by the protestors.
Clarification of misrepresentations of fact
The government has also clarified several misrepresentations of fact which have been used in opposition to the agreement, including claims that it will lead to widespread unemployment and bring an influx of immigrants from mainland China . In fact, a study by Taipei-based Chung-Hua Institution for Economic Research indicates that the services pact will create about 12,000 jobs in Taiwan , while increasing services exports to mainland China by 37 percent, or NT$12 billion (US$394 million).
The number of employees mainland Chinese investors will be able to bring into Taiwan will also be restricted, with an upper limit of seven for firms investing more than US$500,000. The current situation shows how mainland Chinese investment not only brings in capital for Taiwan ’s industries and financial market, but also creates jobs for people in Taiwan . The 495 mainland Chinese investment cases approved as of the end of January 2014, with investment of US$870 million, have brought in only 264 executive managers, specialists and family members, while employing 9,624 Taiwanese. The services agreement does not give mainland Chinese investors, managers or technical specialists unlimited entry permits or long-term residence.
In the context of the current controversy, some critics have alleged that Taiwan ’s freedom and democracy have regressed over the last six years. The protests over the services agreement are just one example, however, of a very open society with a high tolerance for the expression of different opinions.
The nongovernmental organization Freedom House has classified Taiwan as a free nation for 18 consecutive years, giving it scores of 1 or 2 in both political rights and civil liberties over the past six years. On the Freedom House scale, a score of 1 to 2.5 is classified as free; 3 to 5 partly free; and 6 and above, not free. In the same period, the U.S. State Department has given Taiwan positive reviews with regard to personal freedom, freedom of speech and press, and civil and political rights.
Moreover, a number of important steps have been taken with regard to human rights, including ratification of the U.N. International Covenant on Civil and Political Rights and International Covenant on Economic, Social and Cultural Rights in 2009, and the passage of legislation requiring that all domestic laws and regulations be brought into conformance with the conventions. In 2011 the Legislative Yuan also enacted the Enforcement Act for the Convention on the Elimination of All Forms of Discrimination against Women to ensure that gender equality regulations meet the highest standard.
Critics have also referred to an underlying political agenda involving relations with mainland China . However, President Ma has repeatedly stressed the administration’s policy of maintaining the cross-strait status quo of no unification, no independence, and no use of force. An overwhelming majority of the public supports this approach. The government has promoted the services agreement solely to stimulate Taiwan ’s services sector and help create conditions conducive to the country’s participation in regional economic integration.
Resolving the controversy
President Ma has affirmed the orderly, peaceful nature of the March 30 sit-in on Ketagalan Boulevard , while noting that the services accord must be handled by the Legislative Yuan; occupying the legislative chamber is not the way to settle the issue. The key to its resolution is the prompt reinstatement of legislative operations so that both the oversight mechanism and the services agreement can be reviewed and voted on item by item.
Importance of the agreement
If the services agreement is not passed, important economic benefits will be lost, as outlined above. Rejection of the agreement will also damage Taiwan ’s credibility in the international community, hamper efforts to liberalize trade, and affect the country’s chances of joining regional trade blocs such as the Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP). Such developments would be detrimental to Taiwan ’s economic future.
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