By Frank Ching
Journalist, Commentator in Hong Kong
Soon, possibly within days, Taiwan and China will sign a controversial agreement that Taipei sees as vital for its economic well-being and that the mainland sees as another step to bring the island closer to political reunification.
That agreement, known as ECFA, the Economic Cooperation Framework Agreement, was proposed by President Ma Ying-jeou and clearly favors Taiwan over the mainland, although both sides should benefit.
In a briefing to the Legislative Yuan, or parliament, after agreement was reached on June 13, Taiwan's minister of economic affairs, Shih Yen-shiang, stressed that the benefits for Taiwan will far outweigh those for the mainland.
He said that total sales value of eligible Taiwan products that will gain wider access to the Chinese market on an ``early harvest" list would be four times that for Chinese products on the Taiwan market.
Taiwan already enjoys a favorable balance of trade, with exports to China last year reaching $62 billion while imports from the mainland amounted to $24.5 billion.
While the mainland is currently Taiwan's biggest investment destination and trading partner, the island's position in the mainland market is in danger of being eroded by Chinese free trade agreements (FTAs) with other trading partners.
From Taiwan's standpoint, the ECFA is vital for its continued economic viability since it would strengthen Taiwan's position in the mainland, which now accounts for 40 percent of Taiwan's exports.
But Taiwan's trade with the mainland is a two-edged sword. Increased trade also means increased Taiwan dependence on the mainland and there are fears that this will make the island vulnerable to Chinese political pressure.
While on the surface the agreement is about trade, politics plays a crucial role. The opposition Democratic Progressive Party, which favors Taiwan's permanent separation from China, fears that the accord will indirectly pave the way for unification with the mainland. It is planning a large-scale protest on Wednesday (June 23) against the accord.
President Ma has insisted that his government is looking after the interests of the 23 million people of Taiwan and explained that the ECFA was necessary not only to promote cross-strait trade and investment but also to prevent the island from being marginalized as its major trading partners sign FTAs with each other that exclude Taiwan.
An FTA between China and the 10 countries of the Association of Southeast Asian Nations (ASEAN) came into effect this year. Other trading powerhouses, such as Japan and South Korea, are negotiating accords with their trading partners ― but not with Taiwan.
President Ma has said that once the ECFA is signed with China, Taiwan will be able to sign FTA accords with other countries.
Beijing, however, has publicly said that it is opposed to any official agreement between Taiwan and other countries. Even though China has allowed Taiwan increased international space, such as being an observer in the World Health Assembly, it has been careful to see to it that the island is not treated as a sovereign state.
China's position remains that, one day, Taiwan will be politically reunified with the mainland even if it has to use force to achieve this objective.
President Ma, unlike his predecessor Chen Shui-bian, is not pressing for de jure independence for Taiwan and has also stopped the campaign to rejoin the United Nations. However, he faces a re-election challenge in 2012 and his party, the Kuomintang (KMT), has been faring poorly in local elections over the last two years.
While Beijing may want to stick to its formal position that Taiwan should not sign official agreements with foreign countries, it should make clear as soon as possible that it is not opposed to FTAs that take the form of nongovernmental agreements.
The Ma government is pragmatic and is interested only in results rather than claims of sovereignty. It is entirely possible for Taiwan to sign agreements with other countries that are nongovernmental in form but that function like genuine free trade agreements.
A declaration by Beijing that it will not oppose such accords will strengthen President Ma's position while weakening that of the opposition and, since Beijing wants him to remain in power, it would be in its interests as well.
Reiterating opposition to official agreements between any foreign government and Taiwan depicts China in a negative light, weakens the KMT government and provides ammunition to the opposition DPP.
China should stress the positive by making it clear that it will not stand in the way of Taiwan. Such a stand will help the Ma administration. It will also enhance the Chinese government's image in the world.
Frank Ching is a journalist and commentator in Hong Kong. He can be reached at Frank.ching@gmail.com.
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