Recently, Taiwan’s presidential election candidates Ko Wen-je from the People’s Party and Hou You-yi of the Kuomintang (KMT) have reignited a debate over the cross-strait trade agreement, namely the Cross-Strait Service Trade Agreement (CSSTA), which was signed in June 2013 in Shanghai but which became abortive in March 2014 during the Sunflower Movement in which the political opposition accused the KMT government at that time of “surrendering Taiwan’s economic autonomy.” 

Ko Wen-je and Hou You-yi have advocated that the CSSTA should be resumed, saying that the agreement is a win-win arrangement for Taiwan and mainland China.

Interestingly, the spokesperson of the Taiwan Affairs Office of the State Council of the People’s Republic of China (PRC), Zhu Fenglian, added that the CSSTA is “a good agreement” favourable to both sides of the two straits. She added that after ten years of delay in the promulgation and implementation of the CSSTA, more people are realizing the proposed agreement’s mutual benefits. Most importantly, according to Zhu, the CSSTA would be able to create job opportunities and allow both sides to cope with the challenges of economic globalization. Zhu criticized the Democratic Progressive Party (DPP) in Taiwan for obstructing the passage of the agreement and undermining the mutual interest of development.

In response to Ko and Hou’s advocacy, some members of the ruling DPP, such as legislator Lin Chu-yin, criticized the mainland Chinese side of insisting on the 1992 consensus as a foundation of trade relations and accused Ko and Hou of “identifying” with the PRC tactics. Other DPP members immediately accused Ko of trying to absorb the voters of the blue or KMT camp. 

Reacting to the DPP’s criticisms, the KMT party caucus in the Taiwan Legislative Yuan criticized the DPP of failing to abolish the Cross-Strait Economic Cooperation Framework Agreement (ECFA), if the ECFA were “undesirable.”

But the DPP party caucus convenor Liu Shyh-fang argued that, if the CSSTA were resumed and opened, it would affect the employment of four million Taiwan people. Liu did not appear to show how she came up with the estimated figure. Another DPP member of the Legislative Yuan, Chuang Jui-hsiung, maintained that the argument for the resumption of CSSTA is premised on the acceptance of the one-China principle and the 1992 consensus.

The ruling DPP harps on the same theme, namely its opposition to the one-China principle and the 1992 consensus – a position staunchly rejected by the PRC side.

On June 28, Ko Wen-je elaborated on his position on the cross-strait trade agreement. First, he argued that the 1992 consensus has not found a clear definition, and as such this has made many people unhappy. But Ko appealed to the public to attach more importance not only to substantial interactions between the two sides of the Strait but also to the sincerity of cross-strait contacts.

Ko adopted a pragmatic approach to dealing with the debate, asking the people of Taiwan to shelve the high politics of “1992 consensus” and its related definition. Instead, the people of Taiwan, especially the ruling elites, should look to concrete economic benefits through pragmatic interactions.

The Taiwan Mainland Affairs Council (MAC) joined the debate by saying on June 29 that there is no need for the resumption of the CSSTA. It claimed that experts and academics agreed that it is unnecessary to refloat the issue of cross-strait trade agreements. The MAC also maintained that the PRC in the past tried to use trade agreements to “bind Taiwan together,” and that mainland China has been changing tremendously in terms of internal demands and external exports. As such, according to the MAC, it is “meaningless” to discuss the cross-strait trade agreements.

Nevertheless, Ko Wen-je provided a rebuttal of those people who opposed the resumption of CSSTA. Ko remarked on June 29 that the DPP government oversimplified the issue by posing cross-strait agreements as a “zero-sum game.” He said that the crux of the problem is not whether the service trade should be opened or not, and that the real issue is to discuss which occupational sectors should be opened, and which sectors should be protected. Ko argued that, even in Taiwan’s negotiations with other countries on the free trade agreements, it took several years, and that the local industries had to adapt slowly. Ko provided a critique of the DPP position, adding that the government oversimplified the situation and that real negotiations would have to be more complicated.

Objectively speaking, Ko Wen-je’s approach to dealing with cross-strait trade agreements is far more pragmatic and feasible than the DPP regime, which has adopted a position of opposition for the sake of opposing the PRC. Ko’s advocacy of breaking down the agreement into different occupational and service sectors is far more sophisticated than either William Lai of the DPP or Hou You-yi of the KMT. 

On June 29, DPP presidential candidate William Lai voiced his view on the cross-strait trade agreement, which to him was “outdated.” He argued that “the time of going into mainland China” had already passed, and that “the Taiwan ideals, values and principles should not be relaxed.” Lai argued that the Taiwan government must invest in basic utilities, such as water and electricity, and land development for the sake of making Taiwan globalized in trade relations, including the need to reach out to countries like Vietnam, India, and the Philippines. Lai went so far as to question some local Taiwanese on whether they would welcome mainland Chinese to open beef noodles shops and beauty salons in Taiwan.

Lai’s arguments were based on the political ideology of opposing the PRC. Under the government led by Tsai Ing-wen, Taiwan has been adopting the twin policies of “going southward” and expanding trade relations with the US, the American allies like Japan, and countries of the European Union. In short, Taiwan’s trade policy under the DPP has minimized its dependence and interactions with the PRC while reaching out to Southeast Asia, North America, and Europe.

However, questioning the local Taiwanese on whether they would welcome mainland Chinese to open beef noodles shops and beauty salons in Taiwan appeared to go to an extreme. As Ko Wen-je suggested, some service sectors, including perhaps beauty salons and beef noodles shops, can be protected from the mainland investment. Lai utilized extreme cases to scare Taiwan voters away from the mutual economic benefits of cross-strait trade and service arrangements.

The KMT office supportive of Hou You-yi’s presidential election campaign responded to the debate over cross-strait trade agreement on June 28 by stating the need for the government to deliberate on the legislation supervising cross-strait agreements. Both the KMT and the People’s Party have put forward their versions of the legislation, but the Legislative Yuan has not yet put it into the agenda of discussion and debate. Indeed, if the DPP’s view is that cross-strait trade agreements are “unnecessary,” it is not surprising why the legislation supervising cross-strait agreements is now put on the backburner.

The ongoing debate over cross-strait trade agreements has important implications for Taiwan’s relation with the PRC. First, if the DPP is in power, it has neither the interest nor the incentive to discuss the issue, reflecting the dominance of political ideology in cross-strait trade relations.

Second, as moderate presidential candidates, namely Ko Wen-je and Hou You-yi, are raising the CSSTA, William Lai of the DPP is under pressure to reiterate the ruling party’s opposition to closer trade relations between thee two straits. 

Third, Ko and Hou’s advocacy, however, would attract the votes of those Taiwan people who see closer cross-strait trade relations as mutually beneficial and economically profitable. Indeed, some local industrial and service sectors must oppose the entry of mainland capital and investment, but these sectors can be protected as Ko Wen-je advocated. 

Fourth, Ko Wen-je is the first presidential candidate who dares to raise the resumption of cross-strait trade agreement and who suggests the need to identify those service sectors that should be opened or protected. No wonder the mainland side reacted promptly and positively to Ko’s advocacy. From the perspective of achieving a win-win situation, the details of the cross-strait trade and service and agreement can be hammered out through a much longer process as expected, unlike February and March 2014 when the debate over ECFA was increasingly over-politicized and emotionalized.

Fifth, the implication of the current debate in Taiwan is that, if a moderate candidate like Ko or Hou may win the election, then the PRC would have a window of opportunity to reopen the negotiations with the Taiwan side, but with a different approach through which trade and service sectoral differences and discussions would have to be adopted.

In conclusion, the debate in Taiwan over the desirability of resuming the Cross-Strait Service Trade Agreement has important implications for the island’s presidential election campaign in which Ko, Hou and Lai demonstrate their platform on cross-strait trade relations. This debate is going to affect voters, especially those who may see the closer cross-strait trade relations as a win-win situation rather than a zero-sum game. Nevertheless, the DPP and its core supporters will highly likely view closer cross-strait relations as the absorption of Taiwan into the PRC’s economic orbit and the “loss” of the island’s “economic autonomy.” A far more sophisticated and realistic perspective, however, has been articulated by Ko Wen-je and to a much lesser extent Hou You-yi. As such, the politics of cross-strait trade relations has already become an important indicator of presidential electioneering in Taiwan from now to January 2024.