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June 28, 2017

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Normalizing cross-strait economic relations is vital

Taiwan is now all set to leap over the last hurdle to normalize its economic relations with China. Negotiations will get under way shortly between the two sides of the Taiwan Strait to sign a Comprehensive Economic Cooperation Arrangement (CECA), for which Chinese President Hu Jintao promised support in a New Year message on Wednesday.

Talks may take a long time, of course. There are differences to be ironed out before CECA can be inked. For instance, Taipei insists the arrangement be called an agreement, an allusion to a "treaty" between two independent, sovereign states. A fair and mutually satisfactory trade and investment framework isn't easy to establish, too. But regardless of the hurdles, Taiwan must get the CECA signed so that Taipei may better weather the economic crisis that has already reduced 2009 GDP growth estimates from 4.11% to just 0.89%.

In fact, CECA is important enough that Taiwan should eliminate all political overtones during negotiations. After all, is there a tangible difference between an "arrangement" and a "treaty" or an "agreement?" CECA is but a contract between two parties to regulate their economic relations. But assuming semantics do matter, will signing the CECA be akin to selling out Taiwan as a province of the People's Republic and belittling the dignity and sovereignty of the Republic of China on Taiwan?

Consider the implications: The People's Republic is taking the lead in ushering in what is known as a Ten-plus-One area of free trade, arguably one of the most far-reaching economic cooperatives since the formation of the European Union. The "Ten" are the members of the Association of Southeast Asian Nations (ASEAN) and the "One" is China. Taiwan has tried valiantly in the past years to sign free trade agreements (FTAs) with ASEAN states. Of course, Taiwan's efforts were all in vain. No ASEAN state in its right mind would cuddle up with Taiwan at the risk of irking the 3rd largest economy in the world. Remember that negotiations were almost completed between Taiwan and Singapore for an FTA in fact but not in name? Singapore balked at the last minute simply because Taiwan insisted on using a politically sensitive name.

The reality is this: without participation in a regional tax free trade zone, Taiwan's economy, whose mainstay is foreign trade, will wither. CECA will not only improve economic opportunities across the strait, but also indicate to our ASEAN friends that Taiwan is ready to join and contribute positively to the Asian free trade zone. It is thus by normalizing economic relations with China that Taiwan can improve relations with other nations and strengthen its place in the world, which in turn (surprise surprise) bolsters ROC's dignity and sovereignty.

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