Johnny Chi-Chen Chiang said the “momentous” deal will tighten the bonds between Taiwan’s high-tech economy and China’s lucrative markets, but he stressed it is “not the end goal.” The government now plans to hold talks with Taiwan’s other trading partners in a push for other trade deal to become more integrated into the Asian and global economy, he said.
“Trade is Taiwan’s lifeline,” Chiang told a luncheon sponsored by the Carnegie Council and the Overseas Press Club of America. “So we cannot allow ourselves to become economically marginalized.” The threat of military conflict has lingered since Taiwan and China split amid civil war in 1949, but in recent years, the tensions have eased under the policy of rapprochement taken by Taiwanese President Ma Ying-jeou.
China maintains that Taiwan is still part of the mainland.
The trade deal slashes tariffs on a wide range of products and Ma has said the agreement is necessary for Taiwan to avoid economic isolation amid the emergence of regional trading blocs, particularly after a free trade agreement between China and southeast Asian countries went into effect earlier this year.
China’s President Hu Jintao hailed the pact as historic, saying it signals progress on their deepening ties. But Taiwan’s pro-independence opposition charges the pact will hurt the island’s economy by making it overly dependent on China and ultimately pave the way for political unification, its greatest fear.
China is Taiwan’s largest trading partner, with two-way trade accounting for nearly 29 percent of Taiwan’s total external trade in 2009 — and 41 percent of its exports, Chiang said.
But he insisted that Taiwan was not putting “all its eggs in one basket” and has put the other 49 percent into India and other emerging markets “to diversify our trade and exports.” Asked about the opposition’s concerns that the trade deal will lead to political integration, Chiang said Ma has stated that his administration will not deal with the issues of unification, independence or the use of force across the Taiwan Strait.
He said Ma’s policies and the trade deal “have reduced uncertainties in one of Asia’s traditional flashpoints.” The trade pact “represents three giant steps forward,” Chiang said.
“Number one is one giant step for overcoming Taiwan’s economic isolation,” he said. “Number two, it is also one giant step toward mutually beneficial cross-Strait trade and cooperation, and finally it is one giant step for speeding up integration of Asia.” Chiang stressed the importance of Taiwan as a major economic player in Asia’s growing economy and said “an attempt at regional economic integration that fails to include Taiwan in a meaningful way would hold the entire Asia-Pacific region back.” “In short, Taiwan needs regional economic integration, and regional economic integration needs Taiwan,” he said.
Chiang said Asia is in the first stage of economic integration and is now trying to achieve a “free trade area” which could be possible — but European Union-type integration will be “very difficult.”
