20100211 ECFA should not be taken lightly

ECFA should not be taken lightly

By Tien Li-jen 田立仁
Thursday, Feb 11, 2010, Page 8

Negotiations on an economic cooperation framework agreement (ECFA), which will affect the development of Taiwanese industry, started in Beijing on Jan. 26. There was little transparency in the process, however, and the opposition, media and, consequently, the public, were not privy to what happened at the negotiating table.

They — we — had to wait until after the meeting, when the participants each presented a fragmentary picture of what had been discussed, all put in a rather positive light. At a press conference held by the Taiwan Affairs Office (TAO) the next day, Chinese officials revealed more details, details that might even make it possible to extrapolate what their negotiating strategy might be. They also incidentally gave us some insight on why there was less information forthcoming from the Taiwanese contingent upon its return to Taiwan.

First, TAO spokesman Yang Yi (楊毅) said China had agreed to “speed up the ECFA negotiations process,” meaning that in future we can expect them to start with the relatively straightforward issues and deal with the more complex ones later, to seek out areas of agreement and work on any differences and to proceed with caution.

China will be wanting to give the impression that it is doing its best to cater to what Taiwan needs, and one can predict that Beijing may well compromise on signing an ECFA in the first half of this year, the Chinese and English title of the agreement and points such as the “two noes and two wants” raised by the Taiwanese side.

The question-and-answer session during the TAO press conference revealed other things about China’s tactics. For example, one reporter asked whether US arms sales to Taiwan, or Taiwan’s high-level exchanges with the US, would have any impact on the progress of ECFA talks. Yang just gave a form reply, expounding the official Chinese position and repeating, almost verbatim, the response given by the Chinese Ministry of Foreign Affairs to a similar question. He neither elaborated nor clarified Beijing’s position.

When China addressed the arms sales issue, it went as far as to reprimand the US, but said nothing of whether Taiwan was in the wrong for its involvement, preferring not to complicate the issue. This is an example of how China has tried to divorce economic considerations from politics in its dealings with Taiwan to speed up the process. This seems to indicate that China will strive to put politics on the back burner for the duration of the talks, and make sure nothing gets in the way. For this reason, it seems likely that an ECFA will be signed in the first half of this year.

A reporter then asked what name Taiwan was to use in dealings with the WTO and whether Beijing would stand in its way if it wanted to sign free-trade agreements (FTA) with other countries following the signing of an ECFA. To these very pertinent questions Yang simply replied that it was still too early to say. Perhaps we can deduce something else of China’s strategy from this exchange: Beijing might attempt to split up different aspects of the agreement and deal with each separately. It will first try to deal with the signing of an ECFA itself, and then address Taiwan’s signing of trade pacts with other countries and its participation in global trade organizations later.

Does Taiwan stand to lose anything by agreeing to this approach? Actually, yes. If by signing the agreement Taiwan only achieves the normalization of cross-strait trade exchanges, it would only have achieved part of what it could do. A better outcome would be to get Beijing to allow Taiwan the international space to sign FTAs with other countries, which would enable Taiwan to successfully integrate with the Asia-Pacific trade network. If Taiwan were to sign an ECFA first, would it dare take the risk of unilaterally scrapping the deal sometime down the road if talks with China about more freedom on the international stage come to nothing?

While the government seems positive about the progress and shape of an ECFA, it is important to consider what actual, concrete advantage signing the agreement would have. To achieve the best outcome for Taiwan, the government needs to adopt a basket approach to the negotiations and include the FTA and international organization participation issues. It will have to secure a memorandum of understanding or at least a clause providing the right of revocation as a last resort.

Otherwise, Taiwan will be left with an agreement valid only between China and Taiwan that comes no closer to dealing with the issue of international trade. This would mean that Taiwan has lost the chance to secure its ultimate goal of increasing involvement in international trade networks.

Tien Li-jen holds a doctorate of diplomacy from Peking University.