Taiwan can terminate the Economic Cooperation Framework Agreement (ECFA) 180 days after notifying China should bilateral negotiations break down, the Mainland Affairs Council (MAC) said yesterday.
In a statement, the MAC said Article 1 of the ECFA states that if either party wishes to terminate the agreement, it must notify the other in writing.
Both contracting parties should then begin negotiations 30 days after a notification of termination is issued. The agreement will be terminated 180 days after the notification is issued should those negotiations fail, the statement said.
PHOTO: LIN CHENG-KUNG, TAIPEI TIMES
The statement said the spirit of the clause is that both sides would begin negotiations first before any party rushes into reckless action. The agreement can be unilaterally annulled at the request of either party 180 days after a notice is issued and bilateral negotiations have failed, without having to obtain the consent of the other party.
The statement said the term was one of the provisions the Taiwanese team fought hard to include in the accord.
“It is the ultimate safety net,” the statement said.
“It is improper to describe it as a bargaining chip that China will use to threaten Taiwan or to demand that it toe the line,” it added.
The statement was made in response to a Chinese-language Liberty Times (the Taipei Times’ sister newspaper) report that warned Beijing could use the termination clause to demand that Taiwan behave.
Commenting on the termination clause yesterday, the Democratic Progressive Party’s (DPP) spokesperson on ECFA related issues, Julian Kuo (郭正亮), said: “It doesn’t matter either way ... the Chinese Nationalist Party (KMT) government doesn’t have the courage to activate this exit clause anyway.”
He said DPP headquarters would, along with the DPP legislative caucus, look into a proposal to table a bill that would force the KMT government to invoke the exit clause of the agreement if it were not able to sign free-trade agreements (FTA) with other countries within a year.
DPP lawmakers would also consider attempting to force the government to terminate the agreement if GDP growth did not reach government estimates, unemployment continued to increase or if average salaries remained stagnant, Kuo added.
Commenting on the DPP caucus’ reported proposal, KMT Legislator Alex Tsai (蔡正元) said setting a timetable to sign FTAs with other countries would only place Taiwan in a disadvantageous position during negotiations.
KMT Legislator Lai Shyh-bao (賴士葆) said that while the DPP caucus has the right to table such a bill, activating the “termination clause” would only reverse the country’s development and restrict Taiwan from reaching out to the world.
“The DPP should ask businesses and farmers that will benefit from the ECFA if they agree that the ECFA and the FTA issue should be linked,” Lai said.
Legislative Speaker Wang Jyn-ping (王金平) said the proposal “did not make any sense” as it usually “takes about two years or more” for a country to complete negotiations on an FTA with a major trading partner.
Meanwhile, Wang said he would call a meeting this week so that lawmakers could decide the dates and the format of a provisional session to review the ECFA.
The DPP caucus has called for the ECFA to be screened “article by article.”
DPP spokesperson Lin Yu-chang (林右昌) said it was important that lawmakers carefully screened the ECFA before it became valid, based on public concerns that the controversial trade pact could impact Taiwan’s more fragile industries and the labor market because of competition from cheaper Chinese products.
“We are going to stand with the Taiwanese public and demand that the legislature conducts a thorough review of the ECFA,” Lin said.
The KMT caucus, however, is of the view that the legislature can only vote to accept or reject the agreement as a whole.
Noting the caucuses’ different stances on the issue, Wang said lawmakers needed to find a consensus on how to review the ECFA before deliberations begin because of the lack of a precedent in screening cross-strait agreements.
At a separate setting yesterday, Premier Wu Den-yih (吳敦義) said he would lead a group of officials that would defend the ECFA.
Wu was reluctant to put a figure on how much the trade deal would boost the economy, saying “much depends on the global economy and an individual country’s diligence.”
“The world is still feeling the aftermath of the global economic tsunami, but the ECFA helps to remove many obstacles, such as the unfair tariff terms, and therefore it increases Taiwan’s competitiveness,” Wu said.
Wu did not specify when he would appear at the legislature, but said he believed a second provisional session would be held in mid-to-late August.
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