- The Washington Times - Sunday, July 4, 2010

Taiwan and China recently signed a new economic agreement, but on the island across the 100-mile Taiwan Strait from the mainland, a political debate is under way over just how close is too close for comfort.

The Economic Cooperation Framework Agreement (ECFA), signed last week in Chongqing, China, will improve economic ties between the longtime rivals. However, many in Taiwan are protesting the potential political impact of the deal and are calling for a referendum to be held on what both Beijing and Taipei do not formally recognize is an international pact.

The ECFA focuses China-Taiwan interaction on economic issues and has been debated in Taiwan for months. If approved, it will take effect in 2012.

Business supporters of the agreement in Taiwan say it will help firms gain access to the mainland’s booming economy. The ECFA will remove tariffs on $14 billion of Taiwan’s exports and $3 billion of Chinese imports.

Taiwan’s opposition Democratic Progressive Party (DPP) and some Taiwanese labor organizations are protesting the deal that the ruling Kuomintang Party (KMT) is working to implement after approval by the legislature.

Bi-khim Hsiao, director of the DPP’s department of international affairs said the economic agreement will draw Taiwan deeper into China’s circle, putting it closer to China politically.

“It’s never just economic for China,” she said during a Skype interview last week.

On June 26, the DPP held a street protest in Taipei that included 30,000 to 40,000 people who called for a nationwide referendum on ECFA.

The KMT and DPP are currently negotiating the terms of ECFA’s formal approval, which will be further reviewed during a special session of the legislature July 7. If a referendum is approved, it would require a majority of registered voters to approve the agreement.

“Not only parliament, but the public should be allowed to have a say in this,” Ms. Hsiao said.

However, Frank Wang, director of the Taipei Economic and Cultural Representative Office’s (TECRO) press division, said the KMT “is determined to ratify ECFA during the special session.” TECRO is the Taiwan government office in Washington.

Ratifying the agreement presents political problems. Both China and Taiwan do not formally recognize each other and thus do not regard the ECFA as an international treaty.

According to Drew Thompson, the director of China Studies at the Nixon Center, the agreement has not been signed by either head of state, and is being handled by quasi-governmental organizations affiliated with their respective political parties.

Indeed, according to Parris Chang, president and CEO of the Taiwan Institute of Political, Economic, and Strategic Studies and former DPP official, President Ma Ying-jeou is not allowing parliament to modify ECFA, as it would an international treaty, but has limited its response to a “yes” or “no.”

Similarly, China is treating the ECFA as it would a domestic trade deal with Hong Kong, said Patrick Chovanec, a professor in China and former businessman, over a Skype interview from China.

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