Taiwan’s Accession to RCEP and CPTPP: Challenges and Opportunities for Service Trade and the DPP

2023-07-18 21:31:08
2023-07-19 05:31 United Daily News Editorial Director of the Foreign Affairs Office of the CPC Central Committee Wang Yi (seventh from right) attended the ASEAN Plus Three (10+3) Foreign Ministers’ Meeting in Jakarta, Indonesia on the 13th…

Wang Yi, director of the Foreign Affairs Office of the Communist Party of China, recently expressed his support for Hong Kong’s accession to RCEP (Regional Comprehensive Economic Partnership Agreement) at the ASEAN Foreign Ministers’ Meeting. After RCEP came into effect for the Philippines in June, all 15 member states have come into effect; Hong Kong, which applied to join last year, is expected to become the first new member. On the other hand, the United Kingdom officially became the twelfth member state of the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) yesterday at the New Zealand meeting. The admission of the mainland and Taiwan was also discussed at the meeting, but there was no result. China’s Vice Foreign Minister Li Chun said that Taiwan fully meets the criteria for joining the CPTPP, but there are “political problems”.

Despite the fierce trade confrontation between the United States and China, countries are still active in joining regional trade agreements, eliminating tariff barriers, and promising to open up the service industry. The U.S. withdrew from the CPTPP under former President Trump and replaced it with Japan as the leader. There are also countries such as Uruguay and Ukraine queuing up to apply. For Taiwan, joining the CPTPP is an important goal of the government, but if the mainland factor cannot be overcome, our country will always be excluded from the regional trade organization.

In the era of the Malaysian government, it adopted a roundregarding strategy. After the two sides signed the ECFA, they promoted the “Taiwan-Singapore Economic Partnership Agreement” and the “Taiwan-New Zealand Economic Cooperation Agreement.” This is the only free trade agreement between Taiwan and a country that has no diplomatic relations with it. Although the U.S. emphasizes its support for Taiwan, the two sides have so far only had the “Taiwan-U.S. Trade Initiative,” which does not even cover tariff concessions and commodity access in traditional FTAs. We have high expectations for the FTA, but the United States treats it coldly.

The cross-Strait ECFA is only a structural agreement, which requires further implementation of agreements on trade in services and trade in goods; however, the wave of “anti-service trade” has frustrated the agreement, and other agreements cannot be carried out. Back then, the DPP described ECFA as a sugar-coated poison and declared that it would launch a referendum to abolish ECFA. However, the Tsai administration has been in power for more than seven years and has never put it into action. It continues to enjoy the fruits of ECFA. Now that the general election is approaching, Lai Qingde is eager to wash away his self-proclaimed label of “pragmatic Taiwan independence worker”, but he refuses to lower the banner of anti-service trade, trying to use Sunflower experience to keep the DPP in power.

After Ke Wenzhe raised the topic of “restarting negotiations on trade in services”, trade in services has once once more received heated discussions. The Democratic Progressive Party immediately mobilized non-government groups to oppose it, creating an atmosphere of “representatives from various industries anti-service trade”, and repeated the argument of “bringing Qing soldiers into the customs” in an attempt to rekindle the anti-China atmosphere. In fact, neither the text nor the appendix of the service trade agreement mentions “the establishment of capital”, nor does it involve the issue of immigration or permanent residency; however, the DPP and its wings continue to spread that “mainland laborers coming to Taiwan will take away Taiwanese job opportunities.” ” to mislead the public. In fact, the real problem that the whole people must face is: when regional free trade agreements continue to move toward full tariff-free status, Taiwan cannot enter the door, and our industry will face severe competitive pressure. The current impact may not be obvious, but ten years later, the impact will be considerable; especially RCEP, how will Taiwanese manufacturers compete with South Korea and Japan in ASEAN?

The high-tech electronics industry is not affected by the tariff-free protection of the “Information Technology Agreement” (ITA); but the exports of other more traditional manufacturing industries are bound to be pressured by tariff competition. What is more pressing is the service industry, which cannot go out because of its small scale, or it is difficult to raise wages, or there is insufficient investment, and its competitiveness is weak. In short, the Tsai government has blindly taken a defensive position, leaving many industries trapped on the island, or weakening their competitiveness, or failing to go out at all. Due to the low wages in the service industry, there is a serious shortage of workers. The Tsai government recently wants to open up the service industry to introduce migrant workers. In this way, a vicious circle will inevitably form, more migrant workers will take away the low-level jobs of the labor force, the lower wages in the service industry will become harder to save, and these industries will be more trapped in a crisis of hollowing out.

The rules of the game of free trade are equal and mutual benefits for both parties, and there is no possibility of unilaterally benefiting without paying. In April of this year, when the Ministry of Commerce of the Mainland announced that it would conduct an investigation into “trade barriers” to Taiwan on more than 2,000 products, we were obviously not prepared; once the investigation is completed and action is taken in October, many manufacturers will inevitably get hit. This is actually the fundamental problem of the Tsai administration: it is unable to strive to join the regional free trade organization, but it is contemptuous and rude to the existing cross-strait economic and trade. A government that refuses to face the reality honestly, on the one hand closes itself to the outside world, and on the other hand cuts off its own way of life. How can Taiwan find real opportunities and a way out?

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