ECFA could secure lasting peace

A Taiwan official said 22 members of the World Trade Organization have asked Taiwan for briefings on the agreement, formally known as the Economic Cooperation Framework Agreement, or ECFA.

Ironically, while Taiwan sought the accord in an attempt to avoid being isolated, other economic heavyweights, such as Japan and South Korea, are now wary that the island may have stolen a march on them in terms of exports to the mainland.

The Asahi Shimbun newspaper, for example, wrote on July 1, the day after the pact was signed, that it “could reshape the trade environment in Asia, forcing Japan to shift its strategy in trade talks while prompting companies to form new ties.”

The South Korean news agency Yonhap quoted a report by the Korea International Trade Association that called for Seoul to sign a free trade pact with China quickly to offset the “significant damage” to South Korean exports to China.

According to Asahi, of the 20 biggest South Korean exports to China, 14, including liquid crystal displays, semiconductors and petrochemical products, compete against Taiwanese products. And these 14 account for 60 percent of all South Korean exports to China.

A free trade agreement between China and the Association of Southeast Asian Nations came into effect in January, excluding Taiwan. Meanwhile, China, Japan and South Korea have been seeking greater economic integration

There was a fear that the island could become increasingly sidelined as all its major trading partners sign FTAs with one another.

By signing ECFA, Taiwan at one stroke cemented its trade relationship with China and also put itself in a position to negotiate similar agreements with its other trading partners.

President Ma Ying-jeou, while acknowledging that the government could not “guarantee that many FTAs will be signed immediately,” declared that Taiwan now “will stand a better chance.”

And, judging from the media reaction, he is likely to be right. The Nihon Keizai Shimbun, for example, urged Japan to follow China's example and negotiate a free trade agreement with Taiwan, even though it acknowledged that the Chinese hoped to use ECFA as a stepping stone towards a political agreement with Taiwan.

While Beijing has made public its opposition to governmental agreements between Taiwan and other countries, Wang Yi, director of the Taiwan Affairs Office under the Chinese State Council, said the day the ECFA agreement was signed that the Chinese government would “reasonably, practically and adequately” deal with Taiwan's efforts to forge FTAs with other countries.

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