Non-reciprocal levels of openness which have long existed in cross-Straits trade will also expand the possible benefits Taiwan will derive from the CSSTA. In terms of trade, investment, movement of labor and in all other aspects, the mainland is much more open to Taiwan than Taiwan is to the mainland. The mainland has fulfilled all its commitments as a WTO member to Taiwan, and Taiwanese companies have been enjoying equal and, in some cases, favorable treatment on the mainland. In contrast, Taiwan has been imposing strict access limits on commodities, capital and labor on mainland companies. Since Taiwan entered the WTO, most of its opening policies to the mainland have represented empty promises. Most of the industries it opens to the mainland are those in which it already possesses distinct advantages, while most of the industries not open to the mainland are those where the mainland holds the upper hand. At the beginning of 2009, 2,200 kinds of mainland commodities were still not allowed to enter the Taiwan market. In the early 1990s, trade deficit against Taiwan became a major threat for the balance of trade on the Chinese mainland: The mainland's trade deficit against Taiwan in 1993 accounted for 93.9 percent of its total trade deficits for that year. Despite this, the mainland has never conducted any protectionist measures in cross-Straits trade.

Since the two sides started negotiation and implementation of the Economic Cooperation Framework Agreement, the Chinese Government has maintained its policy of "equal and favorable" treatment to Taiwan for more than two decades. In the CSSTA, the Chinese mainland grants more favorable treatment to Taiwanese companies and residents than it does to other WTO members or foreign-invested enterprises. The favorable treatment is reflected in many ways: expanding market access; raising ceilings for Taiwan investment in joint ventures; relaxing qualifications for Taiwan-invested enterprises; and facilitating the flow of Taiwanese people to the mainland; as well as the offering of preferential measures to small and medium-sized companies and individual businesses from Taiwan.

Taiwan's options

Regional economic integration is a current trend in international trade. With a declining role in the international economy, Taiwan cannot afford the price of such a trend. In 1987, Taiwan's exports of goods topped other East Asian export powerhouses, i.e. Hong Kong, Singapore and South Korea, but in 2013, its exports of goods ranked only 20th in the world, moving back two places from the previous year and remaining behind the aforementioned three markets.

Taiwan needs to participate more in the process of economic globalization, and the Chinese Government has provided such opportunities to Taiwan. East Asian economies have gained strong positions in global manufacturing industries, but the service trade—particularly the modern service trade featuring high added value and high technologies—still represents their weak point. Therefore, for such economies to improve their positions in the global economic structure, improving the competitiveness of their domestic service industries through enhancing regional cooperation has become the only workable route. Keeping this in mind, it is to be expected that the Chinese Government would give priority to granting favorable treatment to Taiwan, which China regards as being part of the family.

Since Taiwan has entered the WTO's General Agreement on Trade in Service (GATS) while China is still in negotiations to enter the agreement and has obtained support from some key members from the European Union, Taiwan actually has only three viable options when considering its treatment of the mainland with regards to the service trade pact.

The first is to sign the CSSTA with the mainland so that it can enjoy priority treatment over other WTO members in the mainland market. In the meantime, it must open its service industry to the mainland.

Even if Taiwan does not sign the CSSTA with the mainland, it will nonetheless have to open the service industry to the mainland after the latter enters the GATS, and the openness of the Taiwanese market will be required to be higher than it would be under the CSSTA. In this eventuality, Taiwan will then enjoy merely the same treatment as other WTO members in the mainland market.

The third option is that Taiwan neither signs the CSSTA with the mainland, nor opens its service industry to the mainland. After the latter enters the GATS, in order to avoid opening its service sector to the mainland, Taiwan would be forced to quit the GATS, and then choose to lose access to the service sector of major world economies.

To Taiwan, it should be clear which option is the best.

The author is an op-ed contributor to Beijing Review and a researcher with the Chinese Academy of International Trade and Economic Cooperation

Email us at: yushujun@bjreview.com