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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

Calls for safeguards surge as Taiwan enters post-ECFA era
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ECFA to widen income disparity: forum
Experts at a forum on economics yesterday said the Economic Cooperation Framework Agreement (ECFA), which came into force yesterday, would exacerbate income disparity and unemployment in Taiwan.
ECFA heralds cross-strait government-to-government links: MAC
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Details of China-Taiwan Economic Cooperation Agreement released
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Ma can no longer rely on gloomy economics
On Thursday, the Taiwan Economic News reported that Taiwan’s export growth in the second quarter of this year was the highest of “Asia’s Four Dragons.” With year-on-year export growth at 46.2 percent for the quarter, along with 12.5 percent overall economic growth and a 1.1 percent inflation rate, Taiwan’s economic recovery seems certain.
ECFA to help with Taiwan’s FTA efforts: Japanese expert
The economic cooperation framework agreement (ECFA) Taiwan signed with China in June is expected to spur interest among other countries in the region in forging free trade agreements (FTAs) with Taiwan, a former Japanese economics official said in an article published Thursday in the Nihon Keizai Shimbun, a Japanese daily.
ECFA overlooks human rights: watchdog group
A watchdog organization yesterday accused the Taiwanese government of overlooking human rights and environmental issues while developing closer economic ties with China.
English version of trade pact with China to be posted online
Taiwan’s Ministry of Economic Affairs decided Monday to make a virtue of necessity by granting a request by the opposition Democratic Progressive Party to make public the English version of Taiwan’s economic cooperation framework agreement (ECFA) with China.
Dancing Around the WTO
Whether possessing formal statehood or not, Taiwan like all other 152 members of the World Trade Organization has to elbow its way through foreign trade disputes. Sometimes it loses, sometimes it wins. But it has to abide by WTO regulations, one of which requires the reporting of trade agreements.
Taiwan government faces challenges after ECFA: scholars
The signing of a historic trade pact between Taiwan and China was just the start of a wide range of economic and political tasks for the Taiwanese government to overcome and cautiously review, scholars said.