Commentary

SEF-ARATS talks fail to deliver investment protection agreement

• Publication Date：10/24/2011
• Source： United Daily News

The seventh round of talks between Chiang Pin-kung, chairman of Taipei’s Straits Exchange Foundation, and Chen Yunlin, chairman of the Beijing-based Association for Relations Across the Taiwan Straits, wrapped up Oct. 20 in the mainland Chinese city of Tianjin with the signing of an agreement on nuclear safety cooperation.

Contrary to the wishes of 1.5 million Taiwan businessmen operating in mainland China, the SEF and ARATS failed to ink a deal on investment protection. This issue is one of the greatest challenges Taipei and Beijing face in recent negotiations and, if Beijing continues to dodge Taipei on the issue, this does not augur well for future cross-strait negotiations.

The two sides appear to have reached a stalemate on three major points: personal safety protection, dispute resolution and investment control. Taiwan requires the inclusion of an impartial adjudicator in arbitration, particularly for cases involving local governments on the other side of the strait. But Beijing does not want to involve a third party in the process, playing down the international nature of the deal.

Taiwanese businessmen often find themselves unable to obtain support from mainland Chinese authorities when encountering problems with their investments. In several recent examples, all involving hundreds of millions of yuan, Taiwanese firms did not receive fair and proper treatment. While Beijing officials in charge of Taiwan matters might understand the cases, they were unable to help. Dispute resolution will not be institutionalized without an investment protection agreement in place.

Both sides have been discussing the issue since July this year, and the lack of progress shows they have hit a wall in efforts to strike a deal in line with international norms and conforming to their respective laws.

In the past Taipei and Beijing conducted economic and social exchanges in a flexible manner based on the principles of reciprocity and cooperation, an approach described as exhibiting a unique cross-strait flavor. But now Beijing is concerned that the investment protection pact might be seen as a bilateral agreement between two nations, and that others may request similar arrangements.

The bottom line is that Beijing is unwilling to face up to the existence of the ROC. Sovereignty issues once prevented Taiwan and mainland China from signing any agreements early in SEF-ARATS negotiations. The two sides failed to finalize a deal on double taxation during the sixth round of Chiang-Chen talks, and the gridlock continues over investment protection.

Taipei and Beijing cannot expect to continue cross-strait negotiations with one side parceling out small favors. If Beijing continues to turn a blind eye to the reality that the ROC exists on Taiwan, this only makes it harder for cross-strait relations to progress to the next level. (SFC-JSM)

(This commentary first appeared Oct. 21 in the United Daily News.)

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