Serious Economic & Political Risks in the SEF-ARATS Agreements

In a Nov. 4 press conference, Democratic Progressive Party Chair Ing-wen Tsai warned that the four SEF-ARATS agreements signed this day in Taipei held serious economic and political risks for Taiwan. On the economic front, Tsai, declared that the Ma Administration failed to prepare needed adjustments to Taiwan’s economic structures impacted by the agreements. Politically, the former head of the Mainland Affairs Council argued that Taiwan’s sovereignty had been grievously harmed because of concessions made by the Ma Administration in accepting the “1992 consensus” as a basis for negotiations.

Tsai noted that the four agreements signed by Straits Exchange Foundation (SEF) President Chiang Pin-kun and the Head of China’s Association for Relations Across the Taiwan Strait (ARATS) Chen Yunlin had actually been previously discussed and negotiated during the DPP Administration but that the DPP had always ensured that further relaxation of cross-strait policies would result in limited social costs to the Taiwanese people. The DPP took measures to ease the transition and upgrade Taiwan’s industries by accelerating structural changes to Taiwan’s economy. She criticized the Ma Administration for having prepared no such measures in the agreements on direct cargo flights, shipping, postal service, and food security.

Tsai also stated that the signing of the agreements would further create a closer economic relationship between Taiwan and China and this closer integration means Taiwan will also face higher risks by becoming increasingly dependent on China. There are still many serious uncertainties and internal conflicts in China’s economic and political system, thus any changes in China could translate to serious impact for Taiwan.

Instead of bringing anything new to the table in the negotiations, the Ma government struck a serious blow to Taiwan’s sovereignty in exchange for previously negotiated issues. In order to pave the way for the implementation of the agreements, the Ma government had made irreparable concessions by accepting the so-called “1992 Consensus.”

Chairperson Tsai added that according to the Statute Governing Relations Between Peoples of the Taiwan Area and the Mainland (兩岸人民關係條例), the agreements signed between SEF and ARATS must be sent to the Legislative Yuan for its review and ratification before the agreements can come into effect.

The Chairperson was joined by former Mainland Affairs Council (MAC) Chairpersons Joseph Wu and Cheng Ming-tong, as well as agricultural expert Professor Wu Ming-ming.

Joseph Wu said that as a precondition of the resumption of the SEF-ARATS talks precondition, China had demanded Taiwan accept ‘One China” and the “1992 consensus” despite Chen Yunlin’s pledge not to discuss political issues during these talks. It is thus truly regrettable that the KMT acceded to China’s demands in accepting these preconditions in order for Chen Yunlin to come to Taiwan.

Joseph Wu further pointed out that the signed agreement on direct cargo flights in fact was very similar to his proposal during his term as the Chair of MAC. In other words, this demonstrated that the DPP was in fact successful in its negotiations with China, without needing to make any political concessions. The Ma government, on the other hand, had unfortunately made these political concessions by accepting “One China” and “1992 Consensus” without gaining any additional benefit for Taiwan. Additionally the agreement to change direct weekend charter flights to daily charter flights, with an increase of up to 108 weekly flights, will only further accelerate Taiwan’s dependence on China. As more Taiwanese tourists flock to China, this will also damage Taiwan’s consumer market. Furthermore the exclusion of foreign aircraft or airlines from participation in these direct cross-strait chartered flights is also worrisome. The exclusion of foreign airlines meant that these new flight paths would be understood as domestic flights, thus contradicting Ma Ying-jeou’s pledge to negotiate for the “Fifth Freedom” in the “Freedom of the Air Agreement” for connecting flights.

Another former MAC Chair, Cheng Ming-tong said that the current SEF-ARATS talks were to discuss the complete implementation of the three-links. Regarding direct cargo flights, the new Northern route had deliberately avoided passing through a third country’s Flight Information Region. However the actual fight time mirrors the DPP’s proposed northern flight route, with the only difference being the Ma government’s northern flight route clearly avoids passing through Japan’s Air Defense Identification Zone, thus shortening Taiwan’s response time for any warnings or alerts. Additionally Taiwan made serious concessions by excluding foreign airlines from participating in these direct chartered flights, as well as the government’s inability to negotiate for the “Fifth Freedom” for connecting onward flights to other countries.

Chen further added that the agreement on direct shipping had been ambiguous, with tight restrictions and complicated approval processes. In fact there seems to be a lack of transparency on how companies are chosen to participate in the scheme, and there are already provisions that would prevent foreign registered shipping companies from participating in the direct shipping. Further agreements that flags are not to be displayed by both sides suggest that both the air cargo flights and shipping agreements had fallen prey to becoming domestic travel.

Professor Wu Ming-min said that the signing of the recent round of SEF-ARATS agreements basically is a preparation to lead down the path towards a One China Market, with the goal of using the business community and direct transportation links to ‘unify’ Taiwan. Wu pointed out that some selected Taiwanese businesses will inevitably profit from these negotiations, however those that are the most marginalized and disadvantaged, as well as those working in the agricultural and fishing industries will find their livelihoods suffering even further.

Ma Ying-jeou earlier had suggested that the signing of the agreements will help increase Taiwanese agricultural exports to China by 20%, and that the Agricultural and Fishing industry will benefit by about 10-15% growth. Wu also pointed out that Ma had apparently made these unrealistic promises with no intention for delivery. Wu said that Taiwanese agricultural products are several times more expensive than agricultural produce from China’s Fujian Province. If the government does not make the necessary preparations and a comprehensive system to help facilitate the trade, and also completely opens Chinese agricultural products to Taiwan, than Taiwan’s agricultural sector will suffer enormously. Wu also appealed to the government pay more attention to care of the agricultural and fishing communities. If the One China Market is truly realized, then Taiwanese wages, as well as the cost of farmland might drop significantly as they compete with Fujian Province, causing lasting damages to Taiwan’s agricultural sector.

On the issue of the food safety agreement, Wu said that the most important issue for Taiwan is the dissemination of information as well as following an established standard for inspection. From the past cases of SARS, bird flu, foot and mouth disease, etc, China had consistently hid the facts of the outbreaks and delayed passing on reports of the cases to others. Thus it is difficult for Taiwan to fathom that China will actually fulfill its side of the agreement; and on the issue of the standardization of inspection, China and Taiwan are different, with Taiwan having adopted higher standards for inspection. The government must ensure that food safety is taken seriously for the sake of the Taiwanese people.