The ECFA – where next for China and Taiwan?
It is hard at this point to be sure of who will benefit the most from it economically. There are concerns in Taiwan that there will be a net loss of jobs as a result of the agreement. Whilst Taiwan will be able to ship goods to China with fewer trade barriers, this does not mean that increased trade will employ more Taiwanese than lose their jobs due to an increase in Chinese imports. After all, some Taiwanese bosses may just pocket increased profit, though others will see increased demand and need to employ more workers. It will be easier to consider the impact of the agreement after it has been in place for a year or two.
But now that the ECFA has been agreed upon, where do Sino-Taiwanese relations go from here? The Wall Street Journal has a suggestion.
Leaders from both sides have wagered their personal legacies on the outcome of the trade talks. For Taiwan President Ma Ying-jeou, whose approval ratings have slumped over the past several months, it is a chance to integrate Taiwan more deeply into the regional economy and accelerate the island’s lackluster growth. For Chinese President Hu Jintao, the pact could be a stepping stone for political dialogue, and even a peace accord, with Taiwan before he retires in 2012.
China clearly will want to launch into political discussions at the first opportunity. Ma Ying-jeou is less worried about his legacy and is more concerned about getting re-elected in 2012. But Hu Jintao wants to be remembered for doing something that none of his predecessors could – firmly putting Taiwan on the path of unifying with China, even if this will require further agreements to take place. A “peace agreement” is possible before 2012, even if it is currently not likely.
There is a question as to whether such a new agreement would be suitable. The Chinese Civil War was between the CCP and KMT, not China and Taiwan. The skirmishes between China and Taiwan after 1950 were not a formal declaration of war. If the respective political parties wanted to, they could formally sign a peace agreement between themselves and leave their respective countries out of it. Of course China wants the agreement to include China and Taiwan in some way as a means of making Taiwanese unification more likely.
However, even if a “peace agreement” between China and Taiwan would be suitable, Ma will be reluctant to force one through before the 2012 presidential election, unless it’s clear it would be very popular. Even if Taiwanese would clearly welcome it, most would want a referendum on it – especially as Ma previously promised not to sign political agreements with China before 2012.
But there is one very important question that needs to be considered. After the ECFA, what are China and Taiwan going to do next? As hard as it was to get the ECFA agreed, it was relatively easy compared to the sorts of political agreements that will need to be considered to resolve once and for all Taiwan’s status in a way that is acceptable to both China and Taiwan. Even a “peace agreement” would be highly controversial due to how it referred to Taiwan, but even that would not do much to resolve the China-Taiwan divide. Coming up with ways to bring China and Taiwan together politically and legally, as Beijing wants, would be a horribly complex and divisive process even if it took place over decades. Most Taiwanese do not want unification, and as older Taiwanese who were born in China die off there will be even less support for it. Many Taiwanese will still vote KMT, but as an alternative to other political parties like the DPP, TSU and PFP. They will not do so out of a desire to see unification. China also cannot rely on the KMT staying in power definitely, short of the current ruling party sabotaging the electoral system and ending democracy in Taiwan. The DPP will at some point form a government, which would put the breaks on unification (assuming the process had already started), if not necessarily political rapproachment.
On top of all of that there will be further demands from Taiwan for China to give it more international space, with greater meaningful representation in international bodies, dropping its opposition to Taiwan signing free trade agreements with other countries, agreeing to other economic changes such as fifth freedom rights, etc. Beijing may be reluctant to do this for fear that this will make Taiwan more economically and diplomatically independent and then have no reason to want to unify with China. However, Taiwan will say that economic and other matters cannot rest with the ECFA, especially if political agreements are pushed by China.
Hu should be glad that he is retiring in 2012 – all these headaches will have to be dealt with by his successor.
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