Economic Framework Cooperation Agreement was concluded 10 years ago

China-Taiwan trade pact fails to deliver

A decade after the signing of what amounts to a free trade agreement between Taiwan and China, the economic integration it was meant to accelerate remains a long way off. It is mainly Taipei’s growing wariness toward Beijing that has stalled implementation of the deal.

The Economic Framework Cooperation Agreement was concluded 10 years ago Monday under then-Taiwanese President Ma Ying-jeou and his pro-Beijing Kuomintang.

The two sides agreed to implement an "early harvest" phaseout of tariffs on 539 Taiwanese products and 237 from China, including agricultural goods, machinery and plastics. These terms favored Taiwan, in an apparent effort to nudge Taipei toward Beijing's end goal of unification.

Items covered by this deal accounted for 21.6% of Taiwan's exports to China in 2019, according to the Taiwanese Finance Ministry, resulting in $900 million in savings. "Tariffs of around 12% on fruit have gone to zero," said a source in the agriculture industry.

But cross-strait economic exchanges have stalled since around 2015. Though China remains Taiwan's largest export market, with the mainland and Hong Kong together accounting for 40.1% of the total last year, its share has fallen 2 percentage points since 2010.

ECFA includes provisions on future expansion, written with an eye toward future economic integration. But as fears grew in Taiwan about assimilation by Beijing, a proposed 2014 agreement on trade in services under the ECFA umbrella sparked what came to be known as the Sunflower Student Movement, in which young protesters occupied the legislature in Taipei for weeks. Talks on the deal broke down.

Source: asia.nikkei.com


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