The recently signed cross-strait trade pact could boost the chances of a Taiwan-EU free-trade agreement (FTA), but the proposal would have to first move past the drawing board, an economic expert said on the sidelines of an international conference on China’s rise in Taipei yesterday.
“It will give a stronger political logic for the EU to sign an FTA with Taiwan,” said Razeen Sally, a director at the European Centre of International Political Economy (ECIPE), a Brussels-based research group.
“Simply signing an FTA with Taiwan by [itself] would not work for the EU, because Taiwan is too small of an economy and it will hardly make any difference to the EU,” he said. “Of course, it might risk upsetting Beijing in the process.”
The government signed the Economic Cooperation Framework Agreement (ECFA) with China late last month, saying that it hoped other trading partners would follow suit and sign FTAs with Taiwan in the face of improving cross-strait ties.
However, recent comments by Chinese officials on the issue have sent mixed signals on whether Beijing would relax its staunch opposition to Taiwan engaging in trade talks with other countries.
Late last month, Taiwan Affairs Office director Wang Yi (王毅) reportedly said that China could understand Taiwan’s need to sign FTAs with other countries on the basis of economic expansion.
However, a few weeks earlier, Ma Zhaoxu (馬朝旭), a Chinese Foreign Ministry spokesman, told a press conference that China would continue to stand against Taiwanese efforts to develop any type of official economic agreement along with other countries.
“Taiwan wants FTAs with other trading partners — [but] it isn’t going to happen without a Chinese green light ... The ECFA is this green light, and in this sense perhaps ECFA and other FTAs are linked,” Sally said.
However, he said that for the moment, a Taiwan-EU trade deal was “not even on the radar screen.”
The EU needed to be satisfied on two fronts before it would consider signing an FTA with Taiwan, he said.
“Firstly that it won’t upset Beijing — this is where the ECFA comes into play. Second is that the ECFA will become a foundation for Taiwan to be more integrated into the greater China supply chain,” Sally said. “Then there might be a stronger commercial reason to sign an FTA with Taiwan.”
Following the ECFA, Taiwan could be used as a hub for high-value trade and investment for both the Chinese market and the wider East Asian market, he said, adding that this would give EU businesses more incentive to set up in Taiwan.
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