Taiwan, China Negotiating a Landmark Free-Trade Agreement

By Ariana Eunjung Cha
Washington Post Foreign Service
Saturday, February 21, 2009

BEIJING, Feb. 20 -- Taiwan and China are negotiating a wide-ranging free-trade agreement that represents an important step toward the possibility of unification of the longtime adversaries.

The Comprehensive Economic Cooperation Agreement would allow the free flow of goods, services and capital across the Taiwan Strait at a time when the economies of the mainland and the democratic self-ruled island are increasingly interdependent. While Taiwanese groups have tried to play down the political implications of the economic pact, those on the mainland are already talking about the eventual union of the two.

Li Fei, deputy director of the Taiwan Studies Center at Xiamen University on the mainland, said the agreement would be a significant milestone in gradually warming relations between the antagonists. "It's a start toward full cross-strait economic integration and a necessary condition for marching forward toward final unification," Li said.

Taiwan and China have been governed separately since 1949, when Nationalist forces fled the communist takeover. China insists that Taiwan has and always will be an inseparable extension of the mainland, while Taiwan has maintained that it is a self-governing democracy.

The United States, under the 1979 Taiwan Relations Act, has pledged to defend the island if China launches a military attack, but the nature of that commitment is vague. The U.S. sale of military equipment to Taiwan has long angered China, which has more than 1,000 missiles pointed toward the island. Analysts are paying careful attention to Chinese statements and maneuvers that involve the missile program for indications of a genuine easing of tensions.

Taiwanese President Ma Ying-jeou took office in May on a platform of improved relations with China, which was a turnabout from his predecessor, Chen Shui-bian, a strong backer of Taiwan's independence who routinely provoked China and irritated the United States.

Ma quickly delivered on his campaign promises: beginning regularly scheduled direct flights for passengers, shipments and mail between China and Taiwan and committing to high-level talks with counterparts on the mainland every six months. Although many business and industry groups in Taiwan have enthusiastically backed Ma's approach, it has drawn passionate criticism from opposition parties and some scholars.

Kenneth Lin, an economics professor at National Taiwan University, said the agreement would be tantamount to "de facto unification" despite its name. Hong Tsai-lung, an associate research fellow at the Taiwan Institute of Economic Research, describes the agreement as "a rose with thorns" that "will deepen Taiwan's dependence on China."

In an interview with the Taipei Times published Friday, Ma seemed to imply that the agreement is a certainty, but he hesitated to respond directly to questions about whether signing it would be tantamount to acknowledging that Taiwan belongs to China.

"As to how the international community perceives the issue, it depends on the stances of different countries," Ma said. "Some countries agree with us, and our allies won't think Taiwan becomes part of communist China when it signs an agreement."

Pressed by the reporter, Ma responded: "We will take economic measures to solve economic problems with less politics and ideology. So far we have not seen any attempts by communist China to force Taiwan to do things we cannot accept, and we wouldn't have to accept it if they did so."

While Ma and other officials have spoken in recent days as if the agreement is a done deal, Hsu Chun-fang, a spokeswoman for the Bureau of Foreign Trade in Taiwan's Ministry of Economic Affairs, was more cautious in a telephone interview.

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