Multiplexor Características

Taiwan’s President Ma Ying-jeou verified this strategic dilemma in 2014 when he said:

“Taiwan has long performed well in external trade, but in the past 10 years or so, countries around the world have signed free trade agreements. Many countries want to do business with Taiwan, but when it comes to signing a FTA with us, they become hesitant, because of our diplomatic

predicament.”217

This is most evident in Taiwan’s stagnant negotiations in the early 2000s with Singapore and New Zealand over FTAs, as Beijing’s opposition directly resulted in

216 _{Tanner, Chinese Economic Coercion Against Taiwan, 48-71.}

217 _{The Economist, “Straight from Mr. Ma’s Mouth”, The Economist, March 28, 2014, accessed}

the suspension of these negotiations until 2012.218

In order to overcome the China factor, President Ma took the initiative to improve cross-Strait relations as the first step towards expanding Taiwan’s “international space”.219 Specifically, after improving bilateral relations with China, Ma’s administration further expects Beijing to support its regional policy in the post-ECFA era.220 In this regard, instead of solely focusing on obtaining Washington’s support, the key element of President Ma’s regional strategy is now seemingly the attempt to improve Taiwan’s regionally marginalized position by “seesawing” between China and the US. Despite the fierce opposition to this tactic, evidenced by the 2014 Sunflower Movement mentioned in chapter 1, President Ma’s “seesawing strategy” is in fact based on rational concerns.

From an economic perspective, as several scholars point out, Taiwan could probably make use of the ECFA to decrease the negative economic impacts generated by TPP and RCEP.221 Firstly, according to Taiwan’s Ministry of Economic Affairs, China’s share of Taiwan’s total trade was 21.1% in 2013.222 This ratio is stunning because it is equivalent to two-thirds of TPP’s and a half of RCEP’s share of Taiwan’s total trade. Therefore, promoting cross-Strait economic integration is indeed the most feasible and efficient scenario to cope with the negative economic impacts from TPP and RCEP, despite the fact that Taiwan cannot join these economic mechanisms. Besides, after the improvement of cross-Strait relations, Taiwan was

218 _{Magcamit and Tan, “Crouching Tiger, Lurking Dragon”, 96-99.} 219 _{The Economist, “Straight from Mr. Ma’s Mouth”.}

220 _Ibid.

221 _{Tung and Yeh, “Development of a Cross-Strait Economic Cooperation Framework Agreement”,}

43-44.

also able to commence FTA negotiations with Japan, Singapore and New Zealand, which could not only decrease economic impacts on Taiwan caused by regional trade liberalization but also lay foundations for Taiwan to participate in TPP and RCEP.223

Additionally, all the commodities contained in ECFA’s early harvest list upon which Beijing promised to impose tariff reductions, are from those Taiwanese manufacturers that suffered economic loss following the establishment of the APT. Specifically, the “Product List Under the Early Harvest on the Mainland Side” encompasses the products of petrochemical manufacturers from No.26 to No.75, and the products of textile manufacturer from No.132 to No.264.224 Moreover, in order to decrease negative economic impacts on Taiwan’s electronic and ICT industries caused by the APT, Taiwan has also successfully convinced Beijing to expand the scope of ITA, as the machinery and electronic products are listed between No.344 and No.482, and from No.530 to No.539.225 Notwithstanding this contribution, the ECFA has still become the topic of intense debate among Taiwanese elites due to the limited benefits for Taiwan’s economic development, as well as the increasing degree of Taiwan’s economic dependence on China.226 Chapter 6 will explore these issues in more detail.

Aside from Taiwan’s economic strategy concerns, the ECFA can also be deemed as the byproduct of Taiwan’s “seesawing strategy”. Before the 1997 Asian financial crisis, support from the US and its allies in the Asia-Pacific region were vital in

223 _Ibid.

224 _{For full text of the ECFA, please check: Bureau of Foreign Trade, MOEA, ROC, “The Economic}

Cooperation Framework Agreement”.

225 _Ibid.

226 _{Tung and Yeh, “Development of a Cross-Strait Economic Cooperation Framework Agreement”,}

allowing Taiwan to counter Beijing’s opposition against Taiwan’s membership in regional organizations. 227 However, as the US is now absent from the ASEAN-centered regional economic integration frameworks, it is not practical to keep adopting the strategy of jumping on the bandwagon with the US to counter China’s influence. In contrast, while China plays an indispensable role in the formative process of RCEP, Taiwan needs to improve its relations with China in order to access this regional economic integration mechanism.

Moreover, as mentioned before, although these is a possibility for Taiwan to improve its regional position following the establishment of the US-led TPP, good relations with China remains the precondition of Taiwan’s accession.228 This is due to these unique accession rules of TPP. As stipulated in Chapter 30 of the TPP agreement, an economy that wishes to be a new member of TPP has to obtain consent from all the incumbent TPP members through bilateral negotiations.229 This regulation has created leeway for China to intervene in the negotiation between Taiwan and the TPP members, as has been the case for the FTA negotiations between Taiwan and Singapore, and with New Zealand.230 As such, Taiwan has to improve relations with China in order to ensure the smooth negotiation process with TPP members. Thus far, Taiwan has successfully signed FTAs with Singapore and New Zealand after signing the ECFA with China, which seems to push Taiwan closer to the goal of participating in TPP. Yet in the aftermath of the Sunflower Movement in 2014, the pending ECFA sub-agreements motivated Beijing to pressure Malaysia to

227 _{Cheung, “APEC as a Regime”, 28-33.}

228 _{Kuo-Hsin Liang, interviewed by author, March 14, 2014; Tsao-Shan Cho, interviewed by author,}

April 15, 2014.

229 _{Office of the United States Trade Representative, “The Trans-Pacific Partnership”.} 230 _{Magcamit and Tan, “Crouching Tiger, Lurking Dragon”, 96-99.}

suspend FTA negotiations with Taiwan.231 In this regard, Taiwan seems to be passive when implementing its regional strategy; chapter 5 and 6 will explore this issue in more details.

Most significantly, despite the fact that the development of cross-Strait relations is an important determinant of Taiwan’s regional strategy, Washington still plays an important role. In fact, Taiwan’s strategy for tackling regional economic integration is similar to most developed East Asian countries’ regional strategies. As several scholars have noted, while TPP and RCEP may co-exist in the Asia-Pacific region, most East Asian developed economies, such as Japan and Singapore, has made use of its accession of RCEP to increase their bargaining chips in negotiating TPP, or vice

versa.232 In the same vein, Taiwan also intends to take advantage of its close

economic relations with China to leverage Washington’s support for its membership of the TPP and vice versa. The effectiveness of Taiwan’s seesawing strategy will be further examined in chapter 6 by drawing on interviews with Taiwanese elites.

3.6 Conclusion

In the summary, this chapter confirms that the ECFA represents Taiwan’s contingency plan in response to Beijing’s containment on Taipei’s regional strategy in the context of the establishment of TPP and RCEP. Specifically, this chapter studied the roles of Taiwan and China in the context of regionalization and regionalism in the Asia-Pacific, and it found that China’s economic rise is the major

231 _{Singh, “Can Taiwan Talk ‘Political’ with the Mainland?”, 260-61.} 232 _{Hamanaka, “TPP Versus RCEP”, 163-64.}

cause of Taiwan’s isolation and strategic predicaments in relation to regional economic integration. These phenomena emerged in the late 1990s when China began to play a pivotal role in the process of regionalization, which allowed it to integrate East Asian RPNs into its economy. The result has been asymmetric economic interdependence between China and most East Asian economies. As such, China’s regional influence has been enhanced, which has allowed Beijing to rival Washington for regional leadership by taking the initiative to shape East Asian regionalism.233

Beijing then pressed its economic advantage to marginalize Taiwan in the process of regional economic integration, which has been detrimental for Taiwan’s sovereignty interests. Notably, China’s rise has overshadowed Taiwan’s economic importance in East Asia. Since East Asian RPNs are centered around the Chinese market, China has served as an ‘engine’ in boosting regional economic growth.234 Therefore, unlike the case of supporting Taiwan’s enrolment in APEC in the early 1990s, East Asian countries must take Beijing’s concerns into account when engaging with Taiwan, because tense relations with China may endanger their economic interests. As a result, the effectiveness of Taipei’s commercial diplomacy is limited with regards to its participation in regional economic integration mechanisms.

Most significantly, the increasing degree of Taiwan’s economic dependence on China has also constrained Taiwan’s ability to counterbalance China’s political agenda. China has not only integrated East Asian RPNs but also Taiwan’s

233 _{Frost, Asia’s New Regionalism, 112-19.}

manufacturing supply chains into its economy. In addition to signing FTAs with important regional trading partners, strengthening economic ties with the Mainland is also an essential task for Taiwan to cope with the negative economic impacts generated by the establishment of TPP and RCEP. As such, instead of balancing China, Taiwan has seemingly chosen to seesaw between Beijing and Washington to improve its regional position. Thus the ECFA can be seen as the result of Taiwan’s seesawing strategy, which is also an outcome of both Taipei’s and Beijing’s efforts to reconcile their economic interests and political agendas.

In the context of the above arguments, in terms of improving its marginalized position in the process of regional economic integration, Taiwan had no alternative but to sign the ECFA with Beijing. Nonetheless, China’s effort to exclude Taiwan from regional economic integration frameworks was not the only reason that Taipei to signed the ECFA. In order to promote its agenda of peaceful reunification with Taiwan, Beijing has endeavored to provide preferential treatment for Taiwanese businessmen since the 1980s.235 However, promoting cross-Strait economic integration has not been a smooth process for Beijing. In fact, between 1993 and 2008, the “Go South” strategy was Taiwan’s key strategy for countering Beijing’s one-China principle at the regional level. By carrying out this strategy, Taipei expected to strengthen its economic ties with ASEAN economies, and it also aimed to decrease its economic dependence on the Chinese market.236 Only when cross-Strait relations became nervous would Taipei make concessions on China’s proposals for bilateral economic cooperation. The next chapter will study these issues in more detail.

235 _{Kastner, Political Conflict and Economic Interdependence across the Taiwan Strait and Beyond,}

85-95.

Chapter 4 Cross-Strait Relations between 1990 and 2008: Reconciling