TAIPEI, Taiwan — Taiwan and China may not be able to sign a long anticipated investment protection agreement at an upcoming meeting because of lingering differences, Taiwanese officials say.
Business people from both sides have been eager to see the agreement completed at this month’s meeting of quasi-governmental representatives, tentatively scheduled for next week in Taipei. The pact was seen as a natural follow-on to the historic trade deal China and Taiwan inked in June, lowering tariffs on a wide range of items and bringing the two economies closer together than ever before.
“According to an assessment by our two teams, the (investment) agreement cannot be signed before the end of December,” Lee Li-chen, an official with Taiwan’s Cabinet level Mainland Affairs Council told reporters late Monday. After the trade deal, formally known as the Economic Cooperation Framework Agreement, was signed in the Chinese city of Chongqing, negotiators raised the prospect of signing the investment pact at their December meeting in Taipei.
“Negotiations (over investment protection) have dragged on because both sides took the matter seriously,” Taiwanese Vice Economics Minister Liang Kuo-hsin said. He declined to comment on news reports that the negotiations bogged down because Taiwan insisted that an international arbitrator adjudicate disputes between the sides. On its website, the Mainland Affairs Council says the investment pact should follow the format of international bilateral agreements “but also take into consideration the special nature of our two sides” — an apparent reference to Beijing and Taipei’s competing definitions of Taiwanese sovereignty, stemming from their split amid civil war in 1949. Taiwan wants Beijing to respect its self-governing status, while Beijing insists that Taiwan come under its rule — by persuasion if possible, by force if necessary.
Taiwanese have invested some US$150 billion in China over the past 20 years, while Chinese have invested US$127 million in Taiwan since the island opened the door for mainland investment in 2009, according to Taiwan government figures.
The government says Taiwan’s quasi-official Straits Exchange Foundation handled 428 investment dispute cases on behalf of Taiwanese nationals in 2009. In total, it says, there are some 80,000 Taiwanese businesses on the mainland.
Some have recently complained that their factory compounds were taken over by Chinese authorities providing inadequate compensation. One of the goals of any investment pact would be to give them a legal framework to seek redress.