Yesterday evening saw a much-heralded meeting between the leaders of the two main pan-Blue parties KMT Chairman Ma Ying-jeou (馬英九) and PFP Chairman James Soong (宋楚瑜), at which many analysts were expecting talk of a merger. As it turned out there was little of any substance to announce:

Emerging from their closed-door meeting at the Armed Forces Hall of Heroes, the two chairmen said they exchanged views on problems of mutual concern in a “very friendly atmosphere” and reached agreement on better cooperation.

The areas of cooperation were nothing new (investigating DPP scandals, opposing various DPP proposals, work towards direct links with China), but the most interesting point was the failure to talk at all about a merger (Ma briefly mentioned that a merger was ‘a possibility’ while Soong didn’t say anything). Indeed, there was talk about coordinating nominations for elections in 2006 and 2007, which implies the two parties may stay separate for the next couple of years. To see why this is important, you need to consider the parlous state the PFP is in.

A brief history of the PFP

The PFP was founded in 2000 in the aftermath of the presidential elections – James Soong ran as an independent in that election, and after massively out-performing the KMT incumbent Lien Chan founded the PFP as a pro-China alternative to the KMT. An impressive showing in the legislative elections the following year confirmed its position as a serious political party. The KMT were forced to work with the PFP to ensure an overall majority in the legislature, and for a while the PFP was considered an equal partner to the KMT. However, things went badly wrong in 2004 – the presidential election loss was followed by a disasterous failure in the legislative election. Add to that an almost anonymous showing in the recent local elections, and suddenly a rising power in Taiwanese politics had turned into a fading party with an over-the-hill leader.

However, the killer blow for the PFP was the constitutional reform which passed in June. The new way that the legislature will be elected in 2007 – with only one candidate elected in each district – will make it almost impossible for a small party like the PFP to gain many seats (especially since there is no substantive difference between the PFP and the KMT platforms).

As a party, the PFP only has one thing going in its favour: it holds the balance of power in the legislature. Although it naturally allies with the KMT to give the pan-Blue side a majority, a combined DPP-PFP would also have a majority. So as long as the PFP can threaten to vote with the DPP on their KMT asset stripping bill, the KMT can’t afford to ignore Soong’s party.

An interesting challenge for Ma

So Soong, armed with his one trump card, is trying to negotiate his (and possibly his parties) political future. How Ma Ying-jeou handles this will be informative, as it’s his first real political challenge as KMT head[*] – and one of the biggest question marks over Ma is whether he’s smart enough to handle tough negotiations like this one. Handle it well, and he’ll convince more people that he’s got what it takes to lead a country, but muck it up and people may start questioning how much substance there is behind all his style.

The sensible course for the KMT to take over the PFP is just to wait for them to fade away: support a couple of their pet issues (a few more unconstitutional ‘truth commissions’, a bit more obstruction over the arms budget) to ensure there’s no outright war between the two camps, and just wait until the next legislative elections – at which point the PFP can almost be guaranteed to disappear.

The results from this meeting certainly implies that this is Ma’s strategy: rumblings over the last few months that Soong wants a run at Taipei mayor were explicitly ignored at this meeting (“We’re not discussing matters regarding our personal interests” was the official line), and the lack of serious outcome from this meeting means that the KMT have ensured PFP cooperation for a bit longer without any concessions.

Time is running out for the PFP – each day that passes moves them a little bit closer to becoming the ‘new New Party’.

* By ‘political’ I mean the negotiation, deal-making, and policy side of things. The whole ‘electioneering’ thing is something that noone has ever doubted Ma’s ability in – as confirmed by recent election results.