Saturday, March 29, 2014

Taiwan's crisis signals that détente with China could end fast

What Taipei's Protesters Know; Taiwan's crisis signals that détente with China could end fast.

Wall Street Journal (Online) 27 Mar 2014

The student-led occupation of Taiwan's legislature, now in its second week, concerns much more than a pending Taiwan-China trade agreement. Six years of warming relations between Taipei and Beijing--and of relative calm across the explosive Taiwan Strait--may now be coming to an end.

Taiwanese democracy is known for heated disputes, but the current situation is unprecedented. At times 20,000 protesters have been in the streets. Several hundred stormed the legislature on March 18, barricading the doors and demanding that the ruling party withdraw consideration of the pending trade deal. Five days later, additional protesters tried to take over the nearby offices of the executive cabinet. Police blocked them, in the process injuring 150 people and arresting 60. The legislature remains occupied as protest leaders and government officials negotiate.

The deal at the heart of the fracas was signed last June by Taipei and Beijing to liberalize trade in service industries from banking to publishing, hospitals and beauty parlors--a total of 64 industries in Taiwan and 80 on the mainland. It follows on the 2010 Economic Cooperation Framework Agreement, which launched a new era of cross-Strait commercial expansion. Today annual two-way trade is nearly $200 billion (up almost 100% from 2008), with 40% of Taiwan's exports and 80% of outbound investment now going to China.

Protesters argue that trade with China is a special case in which Taiwan risks an economic dependency that would undermine its own self-government. China already has enough military and economic power, they warn, without the ability to freeze Taiwanese stores, banks and medical services whenever it is displeased with voters' tastes on the island.

This concern is widespread and even appears to be shared by the protesters' adversary, President Ma Ying-jeou, who in recent months has spoken urgently of the need to expand trade ties beyond China, including the need to push domestic reform far enough to earn an invitation into the 12-nation, U.S.-led Trans-Pacific Partnership. The difference is that Mr. Ma calculates--likely correctly--that Taiwan can secure new international trade links only if Beijing tacitly accedes. And for Beijing to do so, the cross-Strait détente must continue with measures such as the services trade agreement.

That's not to say the ongoing protests over closer trade ties were inevitable. Mr. Ma and the Kuomintang he leads erred in not working hard enough to explain their rationale for the deal to the public. Compounding that error, on March 17 they tried to ratify the trade pact unilaterally, violating a promise made last year to allow line-by-line parliamentary review. Then came the students' lawless takeovers of government buildings, which the opposition Democratic Progressive Party quickly embraced. All sides have mishandled the situation.

But today's scene in Taipei represents broad political currents. Since 2008 Beijing has hoped that muting threats of military action and strengthening economic exchange would encourage Taiwanese to support "reunification with the motherland," but polls show the opposite is happening. Although only about 20% want to move toward independence, far fewer want unification and most prefer the decades-old status quo that Beijing continues to reject.

Part of the explanation is that Taiwanese see Beijing's repression of citizens on the mainland, broken promises of autonomy to the people of Hong Kong, and escalating aggression toward neighboring states. In a widely circulated essay supporting the current protests, Taiwanese lawyer Richard Chiou-yuan Lu writes that the trade deal would be acceptable "with any other country" but with China "we don't give an inch . . . because we're afraid of you, China. Really. We're very afraid."

This view, rather than the conciliatory approach of Mr. Ma, may soon come to dictate Taiwanese politics, perhaps even before the expiration of Mr. Ma's term in 2016. If so, China's leaders could decide to return cross-Strait relations to the bad old days, making one of the world's perennial flashpoints far more dangerous.

U.S. officials might consider all this as they prepare to resume bilateral trade talks with Taiwan next week. Advancing bilateral trade--and encouraging eventual Taiwanese accession to the Trans-Pacific Partnership--would help quiet nerves on all sides of Taiwanese politics. The U.S. has largely ignored Taiwan in recent years, but Taipei's current crisis highlights the extent to which trouble still lurks in that corner of Asia.