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Trade deal boosts Taiwan ties with China

By Robin Kwong in Taipei

Published: June 13 2010 20:14 | Last updated: June 13 2010 20:14

China and Taiwan have reached agreement on a wide-ranging trade deal that would be an important milestone for the warming of relations between the two cold war rivals.

The deal, called the Economic Co-operation Framework Agreement, or Ecfa, would also pave the way for Taiwan to join in the flurry of free trade deals being made by other Asian countries. China had previously blocked such efforts by Taiwan as it claims sovereignty over the democratically ruled island, but that opposition is expected to fade with the signing of the new agreement.

Without the opportunity to participate in trade deals, Ma Ying-jeou, Taiwan president, said last week that his country would be “sure to lag behind, to be forced out of the global economic sphere and to be marginalised”.

Negotiators from both sides said they had made key breakthroughs after a third round of talks held in Beijing on Sunday, particularly in the “early harvest list” of what sectors would be included in the initial round of opening. The contents of that list had been the main sticking point in previous negotiations.

The breakthroughs allow the deal to be formally signed at the next semi-annual talks between the two sides. It also secures the centrepiece of Mr Ma’s policy of rapprochement with China, which is by far Taiwan’s biggest export market and where more than 1m Taiwanese already live and work.

The agreement, however, is facing strong political opposition within Taiwan, amid fears that economic integration could lead to political reunification and that the economic benefits of the deal will not be as great as Mr Ma has indicated.

Ecfa was “an Eventual Colonisation Framework Agreement that would cause Taiwan to be dominated by China”, Lee Teng-hui, former president, who belongs to the ruling Kuomintang party, said on Saturday. Mr Lee also said he would participate in a protest rally on June 26 organised by the main opposition Democratic Progressive party that is expected to attract more than 100,000 people.

In an effort to pacify the political opposition in Taiwan, Beijing has agreed to do most of the opening during the first stages of Ecfa, which is designed to set up a framework for future economic liberalisation rather than be a comprehensive trade agreement.

China would lower tariffs or otherwise further open its markets to some 500 categories of goods and services from Taiwan, while Taipei would only open about 200 categories, the negotiators said on Sunday.

Mr Ma had earlier wrested a pledge from China to not ask Taiwan to open its markets to Chinese workers or agricultural goods, items that are particularly politically sensitive.

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