Taiwan Lawmakers to Examine China Economic Agreement Provisions

Legislators in Taiwan will deliberate on services sector agreements signed last week between negotiators from China and Taiwan in the first detailed legislative review of a cross-strait cooperation pact.

Lawmakers from Taiwan’s political parties emerged from closed-door negotiations with an understanding to review and vote on each provision in the June 21 agreement, the Central News Agency reported yesterday. The pact, which allows companies to take controlling stakes in joint ventures across the Taiwan strait, streamlines approvals and expands geographic operations in sectors including banking and hospitals, can’t be put in effect until the review is complete.

Opposition party legislators in Taiwan won the reexamination, the first such move in 19 agreements signed between China and Taiwan, amid concern that competition from Chinese service providers will hurt domestic industries, including Chinese medicine, printing and tourism.

“Striking a deal with another country and then having the legislature revoke it seldom happens in international trade negotiations,” said Chaw-hsia Tu, research fellow at the Chung-hua Institution for Economic Research’s Taiwan WTO and RTA Center. “It hurts the legitimacy and the authority of the negotiator and the country it represents.”

The Straits Exchange Foundation, Taiwan’s negotiator in the deal, said it respects the decision while asking for lawmakers to understand the needs of the economy. “For Taiwan to stay competitive globally such economic pacts are necessary,” Shaw-chang Maa, its deputy secretary-general said by phone.

The services trade agreement was signed under the Economic Cooperation Framework Agreement inked by cross-strait negotiators in 2010. A trade in goods agreement is still under discussion.

To contact the reporters on this story: Andrea Wong in Taipei at awong268@bloomberg.net; Cindy Wang in Taipei at hwang61@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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