ECFA: The Price of letting Taiwan Down

The Economic Cooperation Framework Agreement signed by Taiwan and China in Chongqing yesterday is a serious threat, Singapore’s Beijing-leaning United Morning News (联合早报) quotes South Korean media and experts. The Korea International Trade Association (KITA) released an “After-ECFA Response Program” on June 29, pointing out that tariff reductions on more than 500 Taiwanese products, among them machinery, petrochemicals, and automotive spare parts with a value of about twelve billion US dollars, were a big blow to South Korean exporters. Apparently in cooperation with the Korea Institute for International Economic Policy (KIEP), the response program finds that among the twenty top products exported to China by Taiwanese and South Korean companies, liquid crystal displays, petrochemicals, semiconductors, and office equipment, there are fourteen items among them which rank high both in Taiwan’s and South Korea’s exports to China. The preferential treatment of Taiwanese products would immediately weaken South Korean competitiveness, United Morning News quotes KITA.

East Asia Daily (this name apparently refers to donga ilbo, a South Korean paper which also runs an English, a Japanese and a Chinese language edition), is quoted by United Morning News as commenting that, facing Taiwan taking away the Chinese market, South Korea should sign a free-trade agreement with China. Also, as relations with Taiwan had been distant since South Korea’s establishment of diplomatic relations with China in 1992, South Korea should, by improving relations with Taiwan, seek a common approach with Taiwan to enter the Chinese market.

Taiwan News writes that

It should come as no surprise that the country most impacted by changes in cross-strait relations is Japan, which is seriously concerned that any excessive “‘leaning to one side” by Taiwan toward the PRC will tilt the balance of power in East Asia in Beijing’s favor. […]

In particular, Japanese analysts are concerned that the reversal of the previous administration of the Taiwan – centric Democratic Progressive Party’s pro-Japan and anti-PRC stance toward the restored KMT government’s adoption of a “pro-China and anti-Japan” stance could have serious implications for Japan’s substantive interests in the Taiwan Strait and may add weight to the “China factor” in Tokyo’s policy – making regarding Taiwan.

In a commentary Kyodo News Service highlights a statement reportedly made by Chen Yunlin (陈云林), chairman of China’s Association for Relations Across the Taiwan Strait (ARATS), that ECFA had strategic significance in enhancing the international competitiveness of the Chinese race – nation.

Even if Chen should be misquoted here, this statement certainly reflects Beijing’s position. And it may reflect a irreversible trend of Taiwan moving into China’s orbit. But this isn’t only up to China.

So far, Japan’s, America’s, and probably everyone’s main concern seems to have been not to displease Beijing. ECFA should be read as a signal that letting Taiwan down would come at a price, just as well. Standing by some moral principles will be costly. But in the end, the costs of mere opportunism would be much greater.


The Primacy of Politics, June 13, 2010

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