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Hungdah Su 蘇宏達 on No need for China to oppose EU-Taiwan trade deal

10th February 2012

Hungdah Su is a professor and Jean Monnet chair of the department of political science at National Taiwan University and the director-general of the EU Center in Taiwan. This article was also published in the Taipei Times.

The EU-South Korea free-trade agreement (FTA) came into effect in July 2011. Within five years, import tariffs on industrial products between the EU and South Korea will be reduced to zero. In seven years, all service sectors will be open to cross-border competition. According to the South Korean government, EU-South Korean trade is expected to increase by about 20 percent within the coming years.

Because Taiwanese products compete with their South Korean counterparts in many sectors, the Republic of China government initiated FTA talks with the EU two years ago. Although implementation of the Economic Cooperation Framework Agreement (ECFA) with China accelerated this trend, the Greek debt crisis, ongoing FTA negotiations between the EU and other countries, and Beijing’s ambiguity on this subject have all slowed down the process. The EU and Taiwan have failed to even establish a joint study group, the first step toward FTA negotiations.

Beijing should immediately deny rumors that it opposes Taiwan-EU talks on free trade, which are in its own interest.

First, Taiwan’s initiative for FTA negotiations falls entirely under the framework of the WTO while the nation uses the designation “Special Customs Union of Taiwan, Penghu, Kinmen and Matsu” or “Chinese Taipei” when conducting talks.

Trade talks have nothing to do with sovereignty and are fully compatible with the so-called “1992 consensus” formula. Furthermore, Taipei and Brussels adopted the wording “Trade Enhancing Measures” (TEM) to replace the term FTA to avoid the issue of sovereignty.

Second, the EU and China began negotiating a new agreement on economic and trade cooperation as early as January 2007. Even following the model on accession to the WTO in 2001 and 2002, Beijing now has no reason to oppose similar negotiations between the EU and Taiwan.

Third, Beijing’s opposition or hindrance to Taiwan-EU TEM talks will harm the ECFA, which Taiwan’s opposition condemned as a conspiracy by Beijing to isolate Taiwan.

An explicit stance by Beijing that it does not oppose Taiwan-EU trade talks would show opposition condemnation of the ECFA to be false and confirm the positive correlation between rapprochement in the Taiwan Strait and Taiwan’s inclusion in the international community.

Fourth, constrained by the Greek debt crisis and a heavy load of ongoing FTA negotiations, the EU will not begin negotiations on a TEM with Taiwan even if Beijing announced that it did not oppose such talks.

Fifth, Chinese fears that a richer Taiwan could cut off ties with China are groundless. The wealthier Taiwan is, the more reluctant Taiwanese are to unilaterally change the “status quo.” More importantly, increased international networking would encourage Taiwanese to be more open to China.

Last but not least, the rise of China and cross-strait economic integration could mitigate the Taiwanese independence movement, but it will never accelerate the trend toward unification, as Beijing had wished.

Political integration or unification must be based upon common identity, which can never be achieved by trade and economics alone.

From this viewpoint, Beijing should immediately make it clear that it does not oppose Taiwan-EU TEM talks, which will benefit Taiwan, cross-strait relations and China.

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