Cross- Strait Service Trade Pact:Guidelines and Recommendations

For Renegotiation

Professor Show-ling JangDepartment of EconomicsNational Taiwan University

2014/03/19

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Cross-border Service Modes Being Completely Unsymmetrical

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China mainly does not promise anything; Taiwan is not allow to

offer cross-border services

Taiwan mainly does not have limitations; China can offer

cross-border services

China Taiwan

China’s limitations on cross-border services would make our investors establish stores in China, accelerating the drain of Taiwan’s funds and brains. China will become stronger and our service industry would become hollow.

Cross-border Services

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Unequal Degree of Openness: Taiwan open more than China

China used “developing country” status to join WTO in 2001, Taiwan used “developed country” status to join WTO in 2002. Therefore, the amount of items China commit to open is much less than Taiwan. Nowadays, Taiwan and China still apply this unequal status in Service Trade Pact negotiation, it leads Taiwan’s degree of openness is larger than China.

The items Taiwan open to China, but China does not open to Taiwan

Computer and related servicesHardware consultation related servicesInformation processing services (portal management)Data base services Others

Wholesale, Retail, ConsigneeTourism and travel-related services-hotels and restaurantsRecreational, cultural, and sports-related servicesOther-amusement parks and theme parks (national forest parks)

Other commerce servicesAdvertising servicesManagement consulting servicesConsulting attached to livestock industryConsulting attached to mining servicesConsulting services related to scientific technology Equipment maintenance servicesPackaging servicesMailing list editing services

Transportation services Shipping services Aviation CFS management Highway merchandise transportation Warehousing services

Telecommunication servicesExpress Delivery services (land)Second type of telecommunications special services

Rental services with no operators Aircraft sales and marketing services Small car rental Other mechanics and equipment rentals

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Direct impact: Threatening Almost All of the Tertiary Sector

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The government claims that Taiwan only opens 64 items of the tertiary sector to China, but in reality the services opened reach thousands items, everything needed cradle-to-grave. It will affect more than 4 million employees of the tertiary sector.

Travel

Including: bakeries, snack bars, specialty stores, stationary stores, jewelry stores, shoe stores, department stores, malls, supermarkets, convenience stores, cosmetic shops..

Transportation

Commerce

Finance

Health

Communication

Society

Entertain-ment

SportsConstruction

Environment

Others

Distribution

Wholesale RetailConsignee

Cross-Strait Service Trade Pact needs to be renegotiated

• This Service Trade Pact directly harms the survival of Taiwan tertiary service, indirectly lowers Taiwan manufacturing competitiveness, damage our national security and quality of living. Hence, Service Pact needs to be renegotiated.

• Refers to Korea’s experience: We shall sign FTA with advanced countries before with China.

• Refers to China’s and Korea’s experiences: We shall sign Commodity Trade Pact and Service Trade Pact simultaneously.

• Refers to China’s experience: We shall open Taiwan’s market progressively by supplementary agreement.

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