On March 18, the US-China Economic and Security Review Commission (USCC) held a hearing on recent economic, political and military developments between Taiwan and China and their implications for the US. A broad range of important issues was raised, but one is of utmost interest: the proposed economic cooperation framework agreement (ECFA) between Taiwan and China.
While trade agreements between countries are commonplace, this one has some complex elements: It will be an agreement between two “entities” (for lack of a better term) which officially do not recognize each other’s sovereignty.
Much has changed since the days of the Chinese Civil War. Taiwan made a momentous transition to democracy in the early 1990s, and China experienced its rise as a major economic and political power. Some things, however, have stayed the same: China still claims Taiwan as part of its territory and vows to take military action against it if it moves toward de jure independence.
Now an ECFA enters the picture. While under “normal” circumstances such an agreement would be a good thing, there are, in the present context, ample reasons to have serious doubts.
At the USCC hearing, several witnesses argued in favor of an ECFA, seemingly implying that it would be good for US relations with Taiwan and China. This, as US Senator Sherrod Brown and Commissioner Dennis Shea stated, is by no means certain.
Brown expressed reservations on both the content and the process for approval in Taiwan. He noted that the two parties in the negotiations were rather unequal in size and felt that Taiwan was “giving too much away with too little in return.” He also criticized the lack of transparency in the negotiations and the fact that the legislative branch was not consulted in the process. He advised the administration of US President Barack Obama to urge Taiwan to make the process fully transparent and adhere to the basic principles of checks and balances within the political system.
Shea said that Taiwan and China have very different motivations and expectations for going into such an agreement. The Chinese Nationalist Party (KMT) government wants to get out of the economic doldrums and sees closer economic association with China as the only way out. For China, it is much more political: Chinese officials and analysts see it as a stepping stone toward unification.
So what are the implications for the US and other countries in the region? It is beyond doubt that such an agreement between China and Taiwan will move Taiwan further under the Chinese umbrella. A closer link between the two economies will lead to a distancing between Taiwan and the US. Over time, this will also mean that Taiwan will drift away from the US politically. Is this what we want?
During the past decades, Taiwan’s economy and political system have thrived because of its close ties with the US and the West in general. Freedom and democracy became an integral part of the political, economic and social system in Taiwan, in part because of frequent and close interactions with the West.
The big questions policymakers in Taipei, Washington and Europe should grapple with are these: If Taiwan becomes more economically integrated with China, what will this do to its flourishing democracy? If Taiwan shines less brightly as a beacon for democracy, what does this do to our support for democracy in Asia as a whole and the confidence people in East Asia will have in the US?