Straits Exchange Foundation (SEF) Deputy Chairman Kao Koong-lian (高孔廉) said on Wednesday that it was more pragmatic for Taiwan to sign a Trade and Investment Framework Agreement with China (TIFA) than a Comprehensive Economic Cooperation Agreement (CECA) at the present time.
“At the present stage of cross-strait economic relations development, it would be more pragmatic and beneficial for Taiwan to sign a TIFA with China,” said Kao, adding that such an agreement could pave the way for the much more complex and politically sensitive CECA between the two sides of the Taiwan Strait.
Despite the fact that the tariff rate needs to be resolved before both sides can sign a TIFA, the difference in tariff rates might create business opportunities for Taiwanese investors in China. As foreign products are subject to lower tariffs in Taiwan than in China, they could be sold to China for a higher price, said Kao, who also doubles as SEF secretary-general.
Asked about recent criticism of the proposal for signing a CECA with China, Kao said the true meaning of such an agreement was to reduce the tariff rates and trade barriers in bilateral trade between Taiwan and China. He said that some critics placed too much importance on the name of the agreement.
Some members of the Democratic Progressive Party have expressed concern that a CECA with China would follow the Hong Kong model, downgrading Taiwan to the level of a local government and falling into China’s “one country, two systems” arrangement.
“The name of the agreement is insignificant compared to its function,” Kao said. “I am sure the bright minds of both sides of the Taiwan Strait will be able to find a name that can be accepted by both sides.”
Turning to the recent forum between the Chinese Nationalist Party (KMT) and the Chinese Communist Party (CCP) held in Shanghai, China, Kao said the SEF hoped to establish multiple channels of communications with China through NGOs.
The meeting between the KMT and the CCP has not and will not contradict nor influence the existence and functions of the two quasi-official intermediary bodies — Taiwan’s SEF and China’s Association for Relations Across the Taiwan Strait (ARATS), he said.