Tuesday, January 26, 2010

Taiwan urged to diversify trade to avoid coercion by China

Taipei, Jan. 26 (CNA) Taiwan should diversify its trade relations with other countries to prevent China from using closer cross-Taiwan Strait relations as a political tool for non-military coercion, Washington-based U.S. scholars said Tuesday.

While Taiwan, China and the international community are generally pleased with the easing of cross-strait tensions and closer economic ties in the 19 months since President Ma Ying-jeou took office, there are still concerns over Taiwan-China relations, they said.

Even as Taiwan is negotiating an economic cooperation framework agreement (ECFA) with China, it should also try to diversify its trade and investment to avoid "handing China a potent tool for non-military coercion," said Richard Fontaine, a senior fellow at the Center for a New American Security.

Taiwan is therefore urged to develop closer economic ties with the U.S. as well as with the 10 member countries of the Association of Southeast Asian Nations (ASEAN) , he said in a digital video conference organized by the American Cultural Center to discuss recent cross-Taiwan Strait developments and U.S.-Taiwan-China relations.

Strangely enough, Fontaine said, Taiwan-China trade relations will be freer than Taiwan-U.S. trade relations after the ECFA is signed. He called for the U.S. to "lend some diplomatic muscle, or at least encouragement, to Taiwan's efforts to strike trade deals with other countries, including those in ASEAN and elsewhere."

Fontaine noted that China has showed in the past year that it could unilaterally dictate Taiwan-China relations by restricting tourists, reducing investment flows and establishing new trade barriers, which he said poses a threat and increases Taiwan's vulnerability.

The scholars offered a range of opinions on the key question of whether China will block Taiwan's attempts to ink free trade agreements (FTAs) with other countries.

Bonnie Glaser, a senior fellow at the Center for Strategic and International Studies (CSIS), said that, assuming the ECFA is signed, she would be optimistic about China's goodwill, as the "real issue" is which name Taiwan uses in signing those FTAs.

She said China will not interfere with Taiwan's efforts in this regard because Chinese President Hu Jintao mentioned in his Six Points that China offered to assist Taiwan on its participation in regional integration. China will also be careful about any negative impact on President Ma's presidential campaign in 2012, she added.

Alan Romberg, a senior fellow at Stimson Center, argued that Beijing wants to make sure the Taiwan sovereignty issue will not be raised in Taiwan's negotiations with other countries. In fear of the opposition Democratic Progressive Party's (DPP's) return to power in 2012 and a resurfacing of the Taiwan independence issue, China is expected to keep a tight rein, he said.

"Beijing should encourage Taiwan's international participation, as long as the sovereignty issue is off the table, " instead of reviewing the issue on a case-by-case basis as it is doing currently, he said.

In any case, Romberg said, the ECFA is not easy to negotiate because it has become a domestic "political football, " and even without China's obstruction, negotiations for FTAs with ASEAN countries will not be an easy task, he said.

One thing is sure -- China will not push for political dialogue with Taiwan after the ECFA is signed because it realizes that "President Ma's situation does not permit rapid movement in that area... so it's not seeking to press the pace," Romberg added.

On the issue of U.S. arms sales to Taiwan, Romberg said that China needs to realize that such sales "will give President Ma more confidence and public backing in his handling of the cross-strait issue."