Protesters Say China Invading Taiwan by Economic Means

Say pact would leave country beholden to China’s interests
Protesters display a banner denouncing the controversial China Taiwan trade pact / AP

Protesters display a banner denouncing the controversial China Taiwan trade pact / AP

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More than 100,000 Taiwanese protesters over the weekend voiced concerns that a proposed trade pact with China would leave the democratic island increasingly beholden to its neighbor’s interests.

The protests swelled on Sunday in opposition to the deal that would open up dozens of service sectors to trade between Taiwan and China. Demonstrators have also occupied Taiwan’s parliament building.

Protesters warned that China was attempting to “invade” Taiwan by economic means and called on President Ma Ying-jeou to reconsider the trade deal, which must still be ratified by Taiwan’s legislature. Ma has sought closer relations with China and secured the Economic Cooperation Framework Agreement (ECFA) in 2010 to lower tariffs between the two countries.

Claude Barfield, resident scholar at the American Enterprise Institute and former consultant to the U.S. Trade Representative during the Ronald Reagan administration, said in an interview that the protests could serve as a prelude to local elections in November.

Potential Chinese access to Taiwan’s financial and legal services, for example, hit “closer to the nub of political sensitivities” and have stoked a nationalist backlash, he said.

“In general, I think President Ma’s policies of signing economic free trade deals with China and having things calm down in the Taiwan Strait is supported by the Taiwanese population,” he said. “But there is still this nervousness that the services agreement tipped over.”

Taiwan relies on exports for about 70 percent of its GDP—with 40 percent of those going to China. Critics say the services agreement would make Taiwan even more economically dependent on China and eventually allow the latter to seek political concessions.

China has considered Taiwan a rogue province since it became home to nationalists fleeing the Chinese civil war in 1949. Chinese Communist Party officials staunchly oppose Taiwanese independence and continue to aim more than 1,000 ballistic missiles at Taiwan as a deterrent.

Taiwan moved to lessen its economic dependence on China last year by inking free trade agreements with Singapore and New Zealand. Taiwanese officials are also pushing for the island to be included in the Trans-Pacific Partnership (TPP) talks, which feature 12 Asian-Pacific and American countries, but not China.

Barfield said Taiwan’s inclusion in the TPP “would be an important signal” to China but added that the Taiwanese government itself must still make significant economic reforms before it could join the negotiations.

Rep. Ed Royce (R., Calif.), chairman of the House Foreign Affairs Committee, expressed support for Taiwan joining the TPP at a hearing earlier this month.

“The events unfolding in Ukraine remind us of the strategic weakness of relying on one major trading partner,” he said.

The State Department did not respond to a request for comment by press time about the protests or Taiwan’s potential inclusion in the TPP.

The TPP negotiations stalled in February due to lingering concerns from Japanese and U.S. farmers about increased competition. The partnership represents the most ambitious free trade agreement ever proposed and would encompass 40 percent of global GDP.

President Barack Obama is expected to urge completion of the trade talks when he visits Japan and other Asian countries in April. The countries involved in the TPP negotiations are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam.

However, critics say the administration has not made an effort to enlist support from its own party. The Democratic leaders in both the House and Senate oppose granting the administration trade promotion authority to fast track the deal in Congress, which is viewed as crucial to convincing other nations to finalize the agreement.