Taiwan, China pursue closer ties with free trade talks
Updated
In the latest cross-strait overture - China has signalled willingness to begin negotiations that may ultimately lead to a free trade agreement with Taiwan.
Relations between China and Taiwan have been warming since the election of President Ma Ying-jeou in Taiwan last year. Both sides say such a deal would be purely economics, although wherever China and Taiwan are involved, politics always follows.
Presenter: Beverley Wang
Speaker: Bruce Jacobs of Monash University, Philip Chao, the Director of international tourism for Taiwan's tourism bureau
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JACOBS: The critical question here in taiwan is whether these economic agreements also include political aspects. Do they touch on Taiwan sovereignty, for example.
WANG: Bruce Jacobs, director of Monash University's Taiwan Research Unit, is on the phone from Taipei.
He says his Government contacts in Taiwan have been talking about the proposed Economic Co-operation Framework Agreement, or ECFA, with China.
Recently, the head of China's Taiwan Affairs Office has said talks on the proposal will go ahead at a cross-strait meeting later this year in Taiwan.
China doesn't recognise Taiwan's independence - and uses its political strength to pressure other nations to do the same.
Despite this, Taiwan is one of China's biggest investors. Bruce Jacobs again:
JACOBS: There is some evidence that taiwan would be the largest investor in China. A lot of the Taiwan capital has gone in as American capital or as Japanese capital or as Hong Kong capital, but it's actually Taiwan capital.
WANG: The passage of ECFA would formalise economic ties between China and Taiwan, and provide tax breaks and freer access to investments and trade.
From Taiwan's side, there is hope that earlier, consumer-friendly developments like direct flights and more open tourism policies will help pave the way for such an agreement.
CHAO: I think promote tourism across the Taiwan Strait is like a leading role among other relationships.
WANG: Philip Chao is the director of international tourism for Taiwan's tourism bureau.
Taiwan recently announced the appointment of a tourism representative who will be stationed in China. China in turn, will do the same in Taiwan.
Mr Chao says the arrangement can achieve dual goals:
CHAO: Of course it can build a better backdrop or environment for enhancing bilateral relationships in any other fields.
WANG: Bruce Jacobs says ECFA could have a wider-ranging effect on the region's trade. China recently signed a trade deal with the Association of Southeast Asian Nations.
And Professor Jacobs says Taiwan also wants to make a deal with ASEAN, but:
JACOBS: There is some feeling the Chinese government has said to the other countries such as as the ASEAN countries - "You can't negotiate a free trade agreement with Taiwan until we give you permission" and the feeling is that Taiwan needs to set up this Economic Cooperation Framework Agreement before they can then deal with ASEAN countries. And this is important because several of the products that Taiwan produces, like petrochemicals, would be at a disadvantage without that sort of an agreement.
WANG: The Institute of Southeast Asian Studies' ASEAN trade expert, -- Dr Aekapol Chongdilaivai - says once again, it comes down to politics:
CHONGDILAIVAI: It's completely impossible for south-east Asian countries to conclude FTA (free trade agreement) with Taiwan because China is one of the most prominent trading partners with south east Asia, and so doing will send the political signal to China that we accept the political sovereignty of Taiwan, which will promote the conflicts.
WANG: Discussion of ECFA won't begin until December. Bruce Jacobs says that in Taiwan, there are already fears that negotiations will move beyond the realm of economics.
JACOBS: The fear here is that things will start to get political. The other thing, and this has been stated by the president of Taiwan as well. The Chinese haven't removed a single missile, in fact they've increased the numbers pointed at Taiwan. Now there's about 1,500 missiles pointed at Taiwan and I think many people would argue that's not an indication of friendship. Clearly as taiwan is divided on how to approach China, I think china is divided on how to approach Taiwan
