With the recent Student protests in Taiwan reached to a breaking point where the Students occupied the Legislative Yuan and Executive Yuan, it seems that the Cross-Strait Service Trade Agreement (CSSTA) might be open for renegotiation or disband it in its entirety. While it is within their right for the student to protest against the government about this Trade Agreement, but is it in their best interest to do so? The bigger question is if the student protesters don’t want to be ‘annexed’ by China, are they in danger of trade isolation because of protectionism in their country?
In 2010, China and Taiwan have agreed on the ECFA (Economic Cooperation Framework Agreement) and has brought a lot of benefit to Taiwan. It has allowed many companies for cheaper exports to China and Taiwanese companies to set up presence in China, but there are consequences to this trade agreement. This means that if a talented Taiwanese wanted a prospect for a decent job they will have to move in China to work, which cause this kind of brain drain away from Taiwan. Also, Taiwan have put much restrictions on Chinese citizens to allow them to work in Taiwan so Chinese companies are not as willing to set up presence in Taiwan.
Morever, even with the ECFA signed, it still needs more FTA’s with other countries, namely to compete countries like Japan and South Korea which already have global Conglomerates which Taiwan does not have. China is already following South Korea and Japan’s lead in developing giant companies and set up presence in many 3rd world countries, but faces many restrictions in Western Countries like in Huawei’s case. In CSSTA, it allows Taiwanese companies to start setting up presence in China and in doing so, they can go global. However, CSSTA must go the other way and allow less restrictions for Chinese companies to set up presence in Taiwan.
My fear is that if CSSTA is not passed, Taiwanese companies would be even less competitive and many of these Taiwanese companies would simply wither away leaving Taiwan dependent on Western Companies to set up their presence in Taiwan. This is what is happening in many of the ASEAN countries like Vietnam, Malaysia, Indonesia, Thailand and the Philippines. Even worse, if the radical right in Taiwan decides to cut off ties with China would be bad for China and worse for Taiwan.