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May 29, 2017

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Truth about cross-strait pact lies in the middle of the aisle

The opposition's blockade of the Cross-Strait Trade in Services Agreement at the Legislative Yuan entered into a second day yesterday. After the first day of physical altercations and verbal taunts, lawmakers from the Democratic Progressive Party (DPP) got smart and cut the legislative session short with a procedural tactic.

Missing amid all the sound and fury is any intelligible discussion of the trade pact the legislators were supposed to be reviewing. The agreement, which encompasses the opening of a wide range of service industries, from financial to funereal, will have considerable impact on Taiwan. The supporting Kuomintang (KMT) and the opposing DPP, however, fail to convey what is really at stake concerning the pact and resort to fear mongering.

The KMT stresses that the agreement, reached in relative secrecy between Taiwanese negotiators and their mainland Chinese counterparts, has to be approved in its entirety or Taiwan will risk further international isolation. A clause-by-clause review of the pact, demanded by the opposition, will negate the agreement and set a bad precedent for further regional talks. Taiwan's service sectors are strong enough to compete with their Chinese counterparts and will eventually benefit from the pact. More importantly, as Taiwan's competitors (such as South Korea) are making progress in regional integration, Taiwan has no time to lose, the KMT's argument goes.

The DPP, on the other hand, emphasized the potential devastation the agreement could bring to Taiwan's small- and medium-sized enterprises (SMEs) and even its freedom of speech. A number of businesses to be opened according to the pact — beauty treatment, photocopying, retail, car rental, restaurants and travel agencies, for example — are mostly SMEs in Taiwan and will be crushed by Chinese competitors with deep pockets. If the pact is passed in its current form, the local printing and publishing industry will be dominated by those with Chinese investment, putting domestic authors (and their freedom of speech) at the mercy of mainland publishers, the pact's critics argue.

If both sides are to be believed, Taiwan only has the choice between withering economically or losing its soul to mainland China. It shouldn't be surprising, for similar arguments were made in the debate over the Economic Cooperation Framework Agreement (ECFA). The KMT promised that the ECFA would give a substantial bump to Taiwan's economy (around 1.7 percent in extra GDP growth and over 250,000 additional jobs), while the DPP foretold an invasion of Chinese workers. Both predictions have yet to come true three years after the ECFA came into effect.

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