Posted by: Bruce Einhorn on October 19, 2009
The controversial proposal for a new trade deal between China and Taiwan suffered a setback on Monday with the Taiwanese government announcing it was calling off a meeting scheduled to take place this week between the two sides. The Taiwanese official who was supposed to be leading the informal talks explained today that the government of embattled President Ma Ying-jeou suddenly realized it needed to focus on matters closer to home. According to this report from AFP, Huang Chih-peng, director of Taiwan’s Bureau of Foreign Trade and the head of the island’s delegation, said “the government budget is under review in parliament, so we decided to postpone the discussions until the end of this month.”
Hard to tell yet how big of a setback this is. The explanation is certainly worth questioning, since presumably the fact that Taiwan’s lawmakers were planning on doing their duty and reviewing the budget shouldn’t have come as a that big of a surprise to the executive branch. More likely Ma’s government, severely weakened by the poor response to last month’s deadly typhoon, is trying to buy a bit of time by putting the contentious issue on the back burner for a little while. Economists disagree on what the impact of the proposed Economic Cooperation Framework Agreement (ECFA) between Beijing and Taipei. As you can imagine, there are some who talk about the creation of thousands of new jobs, and there are others who talk about giant sucking sounds.
There’s no doubt, though, the opposition party senses an opportunity to weaken Ma. The pro-independence DPP needs to change the subject away from the scandal-plagued Chen Shui-bian, the former DPP leader and ex-Taiwan president who recently was given a life sentence for corruption. (He denies any wrongdoing.) As the pro-DPP Taipei Times wrote today in an editorial, “the benefits of an ECFA are far from clear, while the negatives are obvious. It is only natural that Taiwanese workers and some entrepreneurs, especially those in the traditional manufacturing sector, would be anxious.”
With Taiwan’s unemployment rate pushing 6% (which is very high in a place that until a few years ago had more or less full employment), that’s an argument that’s sure to gain traction with voters. No wonder Ma’s government feels it needs a little more time before pushing ahead.
BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.