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In early 2009, the Ma administration in Taipei and the Chinese government in Beijing began seriously discussing the possibility of signing a free trade agreement between the two. The stakes are quite large and so is the controversy around any such deal. Ever since 1949, when nationalists fled the mainland, China considers Taiwan a breakaway province that should fall under Beijing’s rule. Taiwan, on the other hand, has been trying to build and maintain its autonomy as a sovereign democratic state. Military tensions have surrounded this antagonistic relationship for 60 years, while China has been quite successful in asserting its "one China" policy among the world’s governments and alienating Taiwan diplomatically.

The new urge to sign an FTA comes after the nationalists lost power in Taiwan’s 2008 elections. China is, in fact, Taiwan’s top trading partner. Taiwanese businesses have built up strong investments in the mainland and the island’s political leadership is particularly concerned about losing economic strength in Asia once the China-ASEAN FTA starts coming into force in 2010.

The big question is whether a China-Taiwan FTA would trigger the start of Taiwan’s transition toward effective economic and political control by Beijing ("reunification"). In this regard, people have even been fighting over the possible name of the FTA. Taiwanese opposition forces insist that it should not be called a Comprehensive Economic Partnership Agreement, as originally proposed, because that is what China’s FTAs with Macao and Hong Kong are called. (Therefore, calling it a CEPA would insinuate that Taiwan has the same political status as these two special administrative regions of China.)

In June 2010, the governments of China and Taiwan signed an Economic Cooperation Framework Agreement (ECFA) which took effect in September 2010. The two governments intend to complete negotiations under this agreement by 2014. There have been major protests and much criticism of the deal in Taiwan.

last update: May 2012
Photo: WaDaNaBe / CC BY-NC-SA 2.0

Cross-strait pacts may violate WTO rules: Taiwan’s ex-envoy
Taiwan’s former permanent representative to the World Trade Organization (WTO) Yen Ching-chang said yesterday that the signing of a Comprehensive Economic Cooperation Agreement (CECA) between Taiwan and China may not be consistent with WTO principles.
Taiwan Solidarity Union rejects China’s latest olive branch as ‘old trick’
The proposed signing of a Comprehensive Economic Cooperation Agreement with China will force Taiwan to follow the Hong Kong and Macau model, which will ultimately downgrade Taiwan to the level of a local government, subordinate to Beijing, says the pro-independence Taiwan Solidarity Union
MAC chairwoman says Taiwan should not sign CEPA with China
Taiwan and China should not be signing a Closer Economic Partnership Agreement such as the one between Beijing and Hong Kong, Mainland Affairs Council chairwoman Lai Shin-yuan said yesterday.
Hong Kong shows CEPA bad for Taiwan
In the wake of the resumption of cross-strait dialogue, officials of both Taiwan’s restored right-wing Chinese Nationalist Party (Kuomintang) government and the Chinese Communist Party-ruled People’s Republic of China have touted plans for the signing of a "closer economic partnership agreement" between the two sides. Largely absent from the debate has been concrete discussion of the experience of Hong Kong.
Ma Ying-jeou proposes signing cross-Strait economic agreement
President-elect Ma Ying-jeou has proposed signing a general cross-Taiwan Strait economic agreement to address cross-Strait economic issues, including investments by Taiwanese financial institutions in China, investments protection, and avoidance of double taxation.
Taiwan’s Ma seeks FTA with China
Taiwan presidential candidate Ma Ying-jeou wants closer economic ties with political rival China, including a free-trade deal and the removal of investment caps on businesses that operate on the mainland, a spokesman said on Monday.
Lien plugs FTA, promises closer ties with Beijing
Capping off his tour of China, Chinese Nationalist Party (KMT) Chairman Lien Chan yesterday said he had encouraged Beijing to support a free-trade agreement (FTA) between Taiwan and ASEAN, while elaborating on the role of cross-party communications between the KMT and the Chinese Communist Party.
Chen: Taiwan and China should sign FTA, not CEPA
Meetings for the first time in 56 years between leaders of the KMT and Chinese Communist Party, were staged on Friday. President Chen Shui-bian closely monitored the proceeding of such a meeting, worried that the KMT will ignore the government’s opposition against signing a Closer Economic Partnership Arrangement with China.