A leading US expert on China said that despite widespread fears, Beijing would not interfere with Taiwan’s efforts to negotiate new preferential trade agreements with other countries in the wake of the signing of the Economic Cooperation Framework Agreement (ECFA) last month.
Charles Freeman, an academic at the Center for Strategic and International Studies in Washington, said on Tuesday that authorities at “the highest levels within China” had assured him that Taiwan would be free to enter into whatever free-trade agreements it wanted.
A strong supporter of the ECFA, he said, however, that “on a very basic level” it was imperative for Taiwan “to take advantage of the fact that it has the fastest growing economy in the world across the [Taiwan] Strait.”
And being part of that economy, having preferential access to the Chinese market, was “key to Taiwan’s need to grow.”
After Singapore, he said, Taiwan was probably the world’s most trade-dependent economy.
“There are those who say that because of the political difficulties and political concerns about too close an integration with [China], Taiwan should first pursue preferential trade agreements with other economies, like the United States,” Freeman said.
However, “The sad fact is that without China signing off on any of those agreements, they would never get to the bargaining table — not without China’s tacit agreement. We all pretend that there is no elephant in the room, but there is an elephant in the room and if we ignore it, it will hit us with its trunk,” he said.
Freeman said that after the ECFA comes into effect, “any preferential trade agreements that Taiwan wants to negotiate with third parties are going to be allowed as long as there is not some simultaneous push for international space that will compromise what Beijing sees as its interests.”
Speaking at a roundtable discussion on “Taiwan-China Economic Relations: ECFA and Beyond,” Freeman acknowledged there were “challenges” to becoming more integrated with the “behemoth” across the Taiwan Strait and that exposing Taiwan’s economy to Beijing created internal pressures at home.
However, he said at the event organized by George Washington University’s Sigur Center for Asian Studies, having a “positive, productive and peaceful” relationship not only with the biggest neighbor, but also with “the biggest source of potential threat” was very important.
“Clearly, the United States has for years been sending signals to Taiwan that it would prefer greater economic integration between [China] and Taiwan for reasons of its own,” Freeman said.
“Peace and security are fundamental to the United States because we don’t need another theater of war. So having that kind of peaceful and productive relationship across the Strait is good for Taiwan’s relationship with the United States,” he said.
However, he said, becoming more integrated with a country like China does create problems.
“When increasingly the youth of Taiwan find there is as much or more opportunity to better their incomes and economic future [in China] as in Taiwan, it presents a significant challenge,” he said.
“When you are moving to an all volunteer army in Taiwan and you are drawing from a pool of labor that has as many opportunities with the apparent enemy as they do at home it will be something interesting to watch,” he said.
Asked if the differences between Taiwan and China — principally Taiwan’s democracy — didn’t make closer integration of any kind unworkable, Freeman said: “You can sleep in the same bed and have different dreams.”
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