Other Nations Will Seek FTAs with Taiwan after ECFA Inked

Other Nations Will Seek FTAs with Taiwan after ECFA Inked

(Commentary)

Source: United Daily News

Author: Chuang Yih-Chyi, Economics Professor of National Chengchi University

April 28, 2010

In this era of globalization and regional economic integration, there is no doubt that it would be in Taiwan’s best interest to conclude free trade agreements (FTA) with other countries, especially those in the East Asian region.

The April 25 debate between President Ma Ying-jeou and DPP Chairperson Tsai Ing-wen revealed the different approaches that the ruling and opposition parties advocate and/or employ on Taiwan’s route of development in the age of globalization. The KMT is using Mainland China to march toward the world, but the DPP advocates marching through the world to enter the Mainland.

Only five countries, including Panama and Guatemala, have signed the FTAs with Taiwan in the past, and the total trade volume is a mere 0.18% of Taiwan’s total foreign trade. Obviously, the approach of “marching toward the world to enter Mainland China” faces a great challenge, and, of course, the key is Mainland China. Therefore, whether Taiwan can freely negotiate FTAs with other countries after concluding a cross-Strait ECFA is not only a focal point for the ruling and opposition parties, but also the main argument behind their different stances on the ECFA.

There is no doubt that Taiwan would be economically integrated with the Chinese Mainland economy and be marginalized if Taiwan were only able to conclude a cross-Strait ECFA and unable to sign FTAs with other countries. This is the precise reason that a downgrading of Taiwan’s status would be detrimental to the security and stability of the Asia-Pacific region, as well as the national interests of the US and Japan. Therefore, even though Beijing will lodge strong objections, the US and Japan will conclude FTAs with Taiwan and not sit idly by while Taiwan becomes marginalized by Mainland China.

Currently, the most successful model of regional economic integration in Asia is “ASEAN +N;” i.e., ASEAN +1, ASEAN +3, or ASEAN +6. If the ECFA were to become Taiwan’s only free trade agreement, Mainland China would undoubtedly gain added strength. If this happened, ASEAN might fear being downgraded to the status of a regional sphere. Therefore, ASEAN member states would definitely do their utmost to seek FTAs with Taiwan out of their individual interests and the interests of Asia as a whole.

Since the ECFA is the key for Taiwan to open up its international economic and trade space, the ruling and opposition parties should have a genuine discussion in the face of Mainland China’s peaceful rise. All political parties should work together to strive to secure the greatest advantages and safeguard the interests for Taiwan’s industries under the ECFA.

Attachment : none