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China: Ma government says CSSTA first, then CSGTA
Taiwan News, Staff Writer
2014-04-09 11:57 AM
With implementation of the Cross-strait Services Trade Agreement (CSSTA) held up by the actions of the Sunflower movement in Taipei, one Chinese official dealing with Taiwan has reportedly disclosed that the Ma administration informed him it plans to continue with its strategy of passing the CSSTA and following it up with a pact on goods – the Cross-strait Goods Trade Agreement (CSGTA). This is entirely in line with the expectations of Beijing, says the official, despite Ma’s long-standing claim that he could easily secure passage of the trade in services bill.

Chinese officials note frankly that they may have misjudged public sentiment in Taiwan in some ways. Looking back at what has transpired recently, they say, it appears that Ma Ying-jeou may have been over-anxious to punch his ticket to a meeting with Xi Jinping.

CSSTA and CSGTA involve very different sectors of the economy and will impact very different companies on both sides of the strait. CSSTA covers industries like banking, securities, insurance and other financial services as well as e-commerce, while CSGTA will deal with manufacturing and export tariff reduction in industries including petrochemicals, machine tools and computer and IC panels. The government’s decision to focus on passage of the trade in services bill means that action on a pact to open up trade in goods will be delayed, a move that has displeased major manufacturers who were looking forward to relaxed restrictions on cross-strait dealings.

Sources have pointed out that Foxconn chairman Terry Gou has spoken out in support of the idea of setting up an oversight mechanism for developing trade agreements. From a business point of view this is understandable, as government negotiators lack an adequate understanding of manufacturers’ needs if they do not consult with them beforehand. This could result in serious defects in trade agreements that leave Taiwanese businesses at the mercy of their Chinese counterparts. Thus it is to Taiwan’s advantage to slow the pace of implementation of the services agreement and avoid rushing into a trade agreement in goods that could be even more problematic.

China has signed foreign trade agreements with eleven nations which covered trade in both goods and services at the same time, while another five agreements cover goods first and then services. Taiwan is the only case in which negotiators are working on an agreement governing services, to be followed by a trade agreement in goods.

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