SEF, ARATS ink three pacts, drop one
　

NEXT UP: Chiang Pin-kung said the proposed ECFA should not be delayed because it was ‘key’ to Taiwan’s economic development and the ‘will of the people’
　

By Ko Shu-ling
STAFF REPORTER, IN TAICHUNG
Wednesday, Dec 23, 2009, Page 1
　

Taipei and Beijing yesterday signed three agreements and agreed to place the economic cooperation framework agreement (ECFA) on the agenda at the next round of cross-strait talks next year.

The deals signed yesterday — on the fishing industry, quality checks of agricultural products, and standardizing inspections and certification — bring to 12 the number of pacts inked by the two sides since President Ma Ying-jeou (馬英九) assumed power in Taiwan in May last year.

Yesterday’s agreements were signed by Straits Exchange Foundation (SEF) Chairman Chiang Pin-kung (江丙坤) and his Chinese counterpart, Association for Relations Across the Taiwan Strait (ARATS) Chairman Chen Yunlin (陳雲林), in the afternoon. The two had met in the morning to discuss the agreements as well as the previous nine agreements and one consensus signed at previous talks and the agenda for the next round of cross-strait meetings.

The two sides had planned to sign four agreements yesterday, but a pact on tax matters such as avoiding double taxation was dropped at the last minute because of “technical” problems following a preparatory meeting on Monday.
　

Both sides said more negotiations were needed and hoped to sign the accord “at an appropriate time.”

Chiang said the three pacts signed yesterday reflected the goal of cross-strait negotiations, which he said was benefiting the public and protecting their rights.

Chiang and Chen agreed to list the ECFA as the “major issue” for the next round of talks. The other issue was intellectual property rights.

Chiang said signing the ECFA “brooked no delay” because it was the “key” to Taiwan’s economic development and was the “will of the people.”

Chen said the ECFA would be “purely economic” and that various studies had shown its effects would be positive.

“Our attitude on the matter has always been positive,” he said.

Many in the Democratic Progressive Party (DPP) believe Ma’s China-friendly push is setting the stage for an eventual Chinese takeover of Taiwan. The DPP says signing an ECFA would flood Taiwan with cheap Chinese products, prompting massive job losses and making Taiwan overly dependent on China.

Chen said he understood there were different opinions in Taiwan about the pact, but that many Taiwanese businesses were worried about economic integration in the region and wanted to see both sides sign an accord.

Chen said all the agreements signed since the two sides resumed negotiations last year benefited the public.

“Nobody can reverse the trend of peaceful development across the Taiwan Strait,” he said.

Yesterday morning, Chiang also brought up the fact that the previous nine agreements had not been fully implemented.

Chiang said although all of them had produced “substantive results” for the people on both sides of the Strait, there was still room for improvement. This includes increasing the number of Chinese visitors, which he said remained far below the target. The number of direct flights to certain destinations in China should also increase, he said.

He also voiced concern over China’s handling of compensation requests following last year’s melamine scandal. Chinese milk products were found to be contaminated by the industrial chemical, leading to heavy losses for Taiwanese importers, who then filed claims for compensation. Chiang hoped the Beijing would urge and assist local governments to handle the matter.

Furthermore, many white-collar criminals who have fled to China have not been repatriated, he said, hoping to see this situation improve, he said.

Chen said the agreements signed with China may benefit certain industries, but eventually the economic and social benefits would reach the public.

He said both sides over the past 19 months had made great achievements, but that things could not be perfect in such a short period of time. However, both sides had a responsibility to improve, he said.

Chen said he believed the problems could be solved through the good communication established over the past year.

“Some problems have arisen since we signed the agreements. Some agreements have yet to be realized or fully realized,” Chen said. “Everybody thinks we should increase flights. We have already begun consultations on this.”

At the signing ceremony yesterday afternoon, Chiang gave Chen a pottery vase featuring two birds looking at an ear of rice. The SEF said it symbolized peace and prosperity. Chen gave Chiang a framed lacquerware piece from Yangzhou bearing the Chinese characters for peaceful development and featuring peonies to represent the new climate of cross-strait relations and a white dove symbolizing cooperation between the people on both sides and their “strong desire to see peaceful development.”

At a separate setting yesterday, Mainland Affairs Council (MAC) Deputy Minister Liu Te-shun (劉德勳) dismissed speculation that the collapse of talks on dual taxation was related to Taiwan’s sovereignty, saying the issues in question were “technical” in nature.

Liu made the remarks in response to questions about a report in the Chinese-language United Daily News yesterday that said the main hurdle was sovereignty. Liu said he did not know whether to laugh or cry when he read the report.

Liu also rejected a report in the Chinese-language China Times that said President Ma Ying-jeou (馬英九) had known the two sides would not sign the tax deal because SEF Secretary-General Kao Koong-lian (高孔廉) briefed him after returning on Dec. 10 from preparatory talks in Fujian Province, China.

Liu said both sides still hoped to seal the deal during their preparatory meeting on Monday.

But Chiang offered a different story yesterday, saying he believed certain government agencies must have briefed the MAC and “higher officials” on the situation.

Neither the SEF nor ARATS clarified why the tax deal was dropped. Liu denied it had to do with complaints from China-based businesspeople that their interests would be compromised.

Liu said they had hoped to see the agreement take effect on Jan. 1 pending legislative approval and the passage of revisions to Article 25-2 of the Act Governing Relations between the Peoples of the Taiwan Area and the Mainland Area (台灣地區與大陸地區人民關係條例).

An official with the Presidential Office who asked not to be named said the government postponed the tax pact because it did not want to make last-minute compromises over Chinese demands.

The official said the Chinese demands raised “technical” problems pertaining to tax matters and not sovereignty. After considering the demands, the government concluded they were not in Taiwan’s best interest, the official said.

Premier Wu Den-yih (吳敦義) said yesterday he had informed Legislative Speaker Wang Jin-pyng (王金平) of the possible deadlock over the tax agreement when at the legislature last Thursday.

Wu said both sides initially agreed that income tax on China-based Taiwanese businesspeople should be levied according to where they reside, but the Chinese side later demanded imposing tax based on other factors.

“Everyone still disagreed on who gets to tax [Taiwanese businesspeople in China] and on the tax rate,” Wang said later yesterday.

Legislators from across party lines yesterday agreed it was better not to sign the deal at this point, voicing concerns about differences between the tax systems in Taiwan and China and the need to protect personal information.

Chinese Nationalist Party (KMT) caucus secretary-general Lu Hsueh-chang (呂學樟) said the postponement showed that the government had the public’s best interest in mind and that the DPP was wrong to accuse the government of selling Taiwan out.

The DPP yesterday said the postponement was “fortunate” as the deal would have led to annual tax losses of NT$30 billion (US$927 million). The DPP said the decision was the result of pressure from businesses. The government should not have signed the other three agreements either, the DPP said.

Protests continue outside venue for cross-strait talks
　

'INCOMPETENT': About 60 vehicles organized by the DPP drove around the city honking their horns and criticizing the talks and China over loudspeakers
　

By Jenny W. Hsu
STAFF REPORTER, IN TAICHUNG
Wednesday, Dec 23, 2009, Page 1

“It is pathetic that our National Security Council and police force would rather kiss up to China than protect the rights of Taiwanese.”— Wang Ting-yu, Tainan City councilor

While top envoys from Taiwan and China met yesterday to sign accords at a hotel surrounded by barbed wire barricades, protesters continued demonstrations against the talks.

A motorcade of about 60 vehicles organized by the Democratic Progressive Party’s (DPP) Taichung City branch honked their horns for several minutes in protest against the talks taking place inside the Windsor Hotel.

The procession drove around the city and blared messages criticizing China and the trade pacts over loudspeakers.

“We are here to protest against this incompetent government. President Ma Ying-jeou [馬英九] is an awful leader who is selling out Taiwan to Beijing with his China-leaning policies,” branch president Chen Ta-chun (陳大均) said through a loudspeaker.

ECFA

A handful of protesters also gathered outside the hotel, using bullhorns, gas horns and loudspeakers as they criticized a proposed economic cooperation framework agreement (ECFA) with China, which they said would draw Taiwan closer to China with no obvious benefits.

One of them burned a Chinese flag in full view of police deployed to maintain order and ensure the safety of Association for Relations Across the Taiwan Strait (ARATS) Chairman Chen Yunlin (陳雲林).

“Taiwan has never been a part of China,” protester Tsai Ting-kui (蔡丁貴) said. “We want the global community to understand the Taiwanese don’t support the course chosen by Ma Ying-jeou.”

FALUN GONG

Since Chen’s arrival in Taichung on Monday, he has been a lightning rod for various groups with grievances against China, including Tibetan activists and the Falun Gong spiritual movement.

About 500 Falun Gong practitioners staged an overnight sit-in near the hotel.

“We want Chen to hear our message and take it back to the mainland. Chen is a representative of the evil Chinese Communist Party,” Theresa Chu (朱婉琪) said on behalf of the Falun Gong protesters. “The Taiwanese government has not raised the matter of China’s human rights [abuses]. We feel very disappointed."

Many pedestrians seemed ambivalent about the DPP’s motorcade.

Less than a dozen onlookers expressed support for the protest, while most seemed uninterested.

A man working in a body shop dropped his tools and shook his head in disapproval upon seeing the protesters.

None of the DPP’s top participated in the protest and only about 10 police officers on motorcycles escorted the motorcade.

Fifty-year-old cab driver Shen Hsi-ming (沈細明) said he was indifferent to the cross-strait talks and protesters alike because “no matter which party is in power, life is still the same.”

“The protesters should be allowed to say what they want to say, but I am not very interested in what they are protesting about,” a woman surnamed Hsieh said.

“Everyone knows this government is doing a bad job, but what can the average person like me do about it?” she asked.

Meanwhile, a group of approximately 80 independence supporters from five civic groups who spent the night at an empty U-Bus depot across from the hotels where the Taiwanese and Chinese delegations were staying was forced to disperse when the bus company resumed operations.

The depot had agreed to shut down operations until tomorrow for security reasons because of its proximity to the hotels.

Tainan City Councilor Wang Ting-yu (王定宇) of the DPP said that the organizers received a call from the police at around 10am yesterday telling them to vacate the depot within two hours as buses would resume at noon.

“It is pathetic that our National Security Council and police force would rather kiss up to China than protect the rights of Taiwanese,” Wang said.

Wang also said he suspected that the bus company had been pressured into resuming operations to force the protesters to move out of direct view of Chiang’s hotel.

The depot manager, Liu Bang-chun (劉邦均), rejected that claim and said the decision was based on the company’s assessment of the situation.

The same group of protesters gathered again later last night near the hotel and were met by a much larger number of police in full anti-riot gear.

Chen Chun-yan (陳俊彥), a police captain from the Taichung City Second Precinct, said that the police would not forcefully disperse the crowd, as they were peaceful.

However, Chen Chun-yan said that the protesters had violated the Assembly and Parade Act (集會遊行法) by failing to apply to use the roads.

Although protesters insisted that their demonstration was peaceful, the group of mostly elderly people was met by a massive contingency of police officers wearing helmets and holding metal shields and wooden batons.

At a glance, the police deployed seemed to number between 300 and 400.

However, the Taichung City Police Bureau refused to disclose the number of police officers at the scene.

MAC chair mentioned missiles to envoy
　

By Ko Shu-ling and Mo Yan-chih
STAFF REPORTERS, IN TAICHUNG
Wednesday, Dec 23, 2009, Page 3
　

Mainland Affairs Council (MAC) Chairwoman Lai Shin-yuan (賴幸媛) said she mentioned China’s military threat to Taiwan during her meeting with Beijing’s top cross-strait negotiator yesterday, and that she also emphasized the importance of governments winning the support of the public.

After meeting Association for Relations Across the Taiwan Strait (ARATS) Chairman Chen Yunlin (陳雲林) yesterday afternoon, Lai told reporters that during their closed-door meeting, she told him that cross-strait detente could not be reached under the shadow of military threat — especially missiles targeting Taiwan.

“It makes Taiwanese very uncomfortable and most of them oppose such a threat,” she said.

Lai said political issues were not a priority in the cross-strait negotiations at the moment, adding that the government’s cross-strait policy is to proceed gradually and tackle the easier and more urgent issues before moving on to the more difficult and less pressing ones. Economic issues precede political ones, she said.

“The institutionalized negotiation system is the right way to go,” she said. “Public support is the most important element of political negotiations. As long as we can continue down the road, obtain the support of the public and keep it convinced that we can secure its interests, one day we will enter a stage that no political force can reverse or resist.”

The government should not and would not avoid political negotiations in the future, she said, but what both sides should focus on now is gaining experience, wisdom and trust through negotiations.

Lai said that an economic cooperation framework agreement (ECFA) the administration seeks to sign with Beijing would not be modeled on Hong Kong’s closer economic partnership agreement (CEPA) because Taiwanese do not support the “one country, two systems” policy.

Lai said they hoped to launch negotiations on an ECFA early next year and ink the proposed accord during the fifth round of cross-strait official talks scheduled for the first half of next year.

Later last night, speaking at a dinner banquet hosted by ARATS, Straits Exchange Foundation Chairman Chiang Pin-kung (江丙坤) said he regretted that Chen was unable to enjoy the freedom of touring the country. Chiang also apologized to Taichung residents over inconvenience caused by tight security measures.

“I am sorry that the security measures for the cross-strait negotiations caused inconvenience and uneasiness to Taichung residents,” he said at the Windsor Hotel.

Chen, on the other hand, described the Chiang-Chen meeting yesterday as “another historic moment” and said the cross-strait negotiations would help promote economic development across the Taiwan Strait and push for peaceful relations.

“The people in Taiwan chose “Yearning (pan, 盼)” as the word of the year for next year. Yearning means ‘expectation’ and ‘hope,’” he said. “As 2010 approaches, we expect and hope that the two sides will enjoy rapid economic development and peaceful cross-strait relations.”

As yesterday marked winter solstice on the Lunar calendar, the hotel prepared glutinous rice balls for Chen, Chiang and the guests for a dinner banquet.

Excuse our ‘technical issues’

Wednesday, Dec 23, 2009, Page 8

It was a slap in the Taiwanese government’s face when negotiations on a cross-strait mechanism to avoid double taxation broke down at the last minute on Monday.

However, it should be a precious lesson for President Ma Ying-jeou’s (馬英九) administration: Haste makes waste.

The delay is good news for the public and more than 1 million China-based Taiwanese businesspeople, who can now avoid the harmful consequences of a hastily signed pact. Nevertheless, the way the Ma administration handled the talks is worrying and raises more concerns about the planned economic cooperation framework agreement (ECFA).

Citing confidentiality, Minister of Finance Lee Sush-der (李述德) refused to specify what “unexpected technical issues” caused the negotiations to fail, saying only that they were related to tax items, tax rates and the definition of residence.

Aside from the tax rates, some of these “technical issues” are basic terms that should have been addressed in the first few negotiation sessions.

Lee should have known this better than anyone else. Why, then, did the ministry wait until the last minute and allow the “technical issues” to get in the way?

Meanwhile, Straits Exchange Foundation (SEF) Secretary-General Kao Koong-lian (高孔廉) offered the excuse that the two sides had only begun negotiations on double taxation in October, and that the issue remained complicated.

The government has signed bilateral tax exemption agreements with 16 countries since 1981, but the negotiations for each of those took between one and four years to complete, he said.

Again, Kao and Lee should have known this better than anyone else. So why did they believe they could wrap up a tax deal with China in less than three months when officials knew it would be far more complicated than the agreements Taiwan has signed with 16 other countries?

What’s the hurry?

None of these questions will be answered since Lee made it clear that “he cannot reveal too much information” because the two governments are still in the process of negotiating.

This raises another question: Why the secrecy?

This secrecy is not in line with how Taiwan has handled previous tax proposals.

In the past, Taiwan included the private sector in the policymaking process by creating a tax reform committee, whose authority often transcended that of the finance ministry.

The committee reviewed many versions of tax rate proposals and the media accordingly informed the public. The proposals were thoroughly discussed before the committee and the government sought a consensus. After all, a balance must be struck between the government and the taxpayer.

This time around, however, the finance ministry is keeping the public in the dark, trying to single-­handedly pull off a deal with China.

This will only end up triggering more opposition, not only to a taxation agreement with China, but also to other agreements such as an ECFA.