Trade Pact Under Fire

Analysts wonder what the payoff is.

ECFA-305.jpg Chen Yunlin (R) shakes hands with his Taiwan counterpart Chiang Ping-kun (L) after they sign the ECFA in Chongqing, June 29, 2010.

HONG KONG—Critics are lashing out at a recent economic and trade agreement inked by Beijing and Taipei, saying it doesn’t serve the interests of the island’s 23 million people.

The Economic Cooperation Framework Agreement (ECFA) signed Tuesday in the southwestern Chinese city of Chongqing is largely a trade and commercial agreement, but many in Taiwan fear it could undermine their hard-won de facto independence.

Others said the pact focuses too heavily on Taiwan’s presence in Chinese markets, and takes too little account of its own economic development.

“In the tourist industry it’s possible to get the impression that tourists from mainland China are everywhere,” said Li Xunyong, chairman of the U.K.-based Union of European Taiwanese Associations.

“But actually this has been damaging to some of the tourist spots in Taiwan, and no thought has been given to how to improve these places in order to attract larger numbers of richer consumers to Taiwan,” Li said.

He said the same was true of other industries on the island, which has been ruled separately from mainland China since the Kuomintang (KMT) Nationalist government fled there after losing a civil war to Mao Zedong’s communists in 1949.

Li said the trade pact takes no account of the fact that Taiwan’s industries, especially in the areas of hi-tech and innovation, are much more developed than China’s.

Susie Chiang, former Taiwan trade and cultural envoy to Hong Kong and founder of the CS Culture Foundation, said Taiwanese people resist comparisons between the cross-straits deal and one signed with Hong Kong in 2003.

“Most people in Taiwan don’t want to use [Hong Kong’s economic cooperation agreement] to describe the ECFA,” Chiang said.

“They also don’t want to bring this into the same category as Hong Kong and its ‘one country, two systems’ arrangement [with China],” Chiang said.

However, she said it is “inevitable” that economic ties across the Taiwan Straits would get closer and closer.

Zhang Zilin, a member of China’s pro-KMT Pan-Blue Alliance, said his organization opposes the agreement.

“We don’t think this should be limited to economic exchange,” Zhang said.

“We think that only exchanges in the areas of human rights and democracy—the most important topics—would represent a true advance for future cross-straits relations.”

Closer connections

However, former Beijing University media professor Jiao Guobiao said the agreement represents connectivity as opposed to isolation.

“This isn’t just about the mainland and Taiwan; it’s also about better communication and openness between people, between two nations, and between two countries and political parties which are still in a standoff.”

“How much risk it contains is another matter,” Jiao said.

Taipei-based economics author Tung Chen-yuan said in an interview with Agence France-Presse that Taipei already enjoys a huge trade surplus with Beijing.

Such an imbalance of interests would lead people to fear ulterior political motives behind the deal, which was trumpeted as a breakthrough in cross-Straits ties throughout China’s official media Tuesday.

Taiwan’s trade surplus with China was U.S. $37.6 billion dollars in 2009. Analysts say the ECFA is unlikely to narrow it.

The ECFA provides for lower tariffs for more than 500 categories of Taiwanese products sold in China, but for only half as many Chinese-made goods sold in Taiwan.

Taiwan’s main opposition Democratic Progressive Party (DPP) has warned that the deal will mean that Taiwan is treated as a local government like Hong Kong and Macau in future dealings with Beijing.

Taiwan’s Liberty Times said in an editorial Tuesday that “China is the happiest about the signing, because its goal of annexing Taiwan is moving smoothly ahead.”

Zhang Baohui, an expert on China-Taiwan ties at Hong Kong’s Lingnan University, said China is used to buying political gains with economic concessions, but may have misunderstood the mood in Taiwan.

Analysts said any talk of political ties should be muted, warning that Taiwanese voters could kick back at the deal in presidential elections in 2012.

Currently, President Ma Ying-jeou heads a China-friendly government in Taipei, but the opposition DPP is committed to seeking independent statehood for Taiwan, a move which Beijing says will prompt an invasion.

Original reporting in Mandarin by Zhang An An and Xin Yu. Mandarin service director: Jennifer Chou. Translated from the Chinese and written for the Web in English by Luisetta Mudie. Edited by Sarah Jackson-Han.


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