Taipei, Beijing seek consensus on investment protection pact

There were reports that Chairman Chiang Pin-kung of Taiwan's Straits Exchange Foundation (SEF), and his Chinese counterpart, President Chen Yunlin of the Beijing-based Association for Relations Across the Taiwan Straits (ARATS), might not be able to hold a planned meeting to secure agreements on investment protection and cooperation on nuclear power safety.

Officials at the SEF and the ARATS had planned to put the cooperation pact on investment protection at the top of the agenda for the next Chiang-Chen meeting.

The two will also exchange views on other issues like merchandise and service trade and dispute settlement mechanism.

Cooperation on nuclear safety was also included among the issues to be put on the negotiating table following the nuclear disaster in Japan.

The officials held high hopes for quickly hammering out an agreement on investment protection after Chinese leader Hu Jintao told visiting Kuomintang Honorary Chairman Wu Po-hsiung at a May meeting in Beijing that the two sides should speed up the process of reaching an investment protection agreement.

However, there are growing signs that the seventh Chiang-Chen meeting could be put off as the two sides have hit a stumbling block over the issue of international arbitration for possible future disputes concerning investment protection.

Most Taiwanese investors in mainland China generally lack confidence in China's judicial system based on their past experiences on the mainland.

Legal experts in Taiwan and SEF officials want to adopt the prevailing international arbitration mechanism for possible future disputes in order to better protect the interests of businesspeople from Taiwan.

But the Chinese side has strongly resisted the proposal for fear of “internationalization” cross-strait issues.

People participating in the preliminary talks on the investment protection pact revealed that the two sides have built a consensus of jointly setting up an arbitration mechanism to deal with future disputes.

But they and their Chinese counterparts are still unable to reach agreement on the organizational mechanism as well as the spirit and practice concerning international arbitration.

Some of them voiced concern that the different views and positions are likely to forestall the planned meeting of the two top negotiators and put back the signing of the pact, which was originally planned for July.

Yet Vice Chairman Liu Teh-shun of the MAC, the government's policy-formulating agency concerning China, said in Taipei yesterday that officials on the two sides are still working hard for Chiang and Chen to hold their next meeting in the summer and formally ink the pacts on investment protection and nuclear safety cooperation.

Sources said that officials in Taiwan had thought earlier that there should be smooth progress in securing a nuclear safety cooperation pact because it is a mutual concern for both sides with no political implications.

The pact will cover cooperation on immediate notifications of either side in case of incidents at nuclear power plants, jointly conducting emergency radioactivity detection, and cooperation on technology, research and development projects.

It turned out that the progress on such matters has been much slower than anticipated because they still touch certain sensitivities and complications that have limited the initial results.

But Liu and other MAC and SEF officials stressed that those engaged in preliminary talks from both sides are still working hard to build consensus on the touchy issues and pave the way for the formal signing of agreements by Chiang and Chen in the second half of this year.

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