The signing of the ECFA

2.2 Balancing the United States

Since the end of the Cold War and the emergence of a “unipolar world,” experts have been warning against great-power coalitions that would balance the United States. That the “greatest superpower ever” has not provoked such a balancing coalition is widely regarded as a puzzle for balance of power theory.³⁹ Despite the unprecedented concentration of U.S. power, G. John Ikenberry asks why “other great powers have not yet responded in a way anticipated by balance of power theory?”⁴⁰ To explain the absence of balancing against the United States, some argue that it is just a matter of time before such a coalition arises, while others believe that such a coa-lition will not arise because the United States is too strong and balancing is too risky.⁴¹

Is this just a matter of time? Kenneth Waltz first predicted that balancing against the United States will occur and content that that it is just a matter of time before it happens.⁴² To support his prediction, Waltz refers to the unprecedented power of the United States, its aggressive be-havior and the logic of the balance of power theory.

“ The expectation that following victory in a great war a new balance of power will form is firmly grounded in both history and theory. […] Theory enables one to say that a new balance of power will form but not to say how long it will take. National and international conditions determine that. Those who refer to the unipolar moment are right. In our perspective, the balance is emerging slowly; in historical perspective, it will come in the blink of an eye.”⁴³

2.3 The signing of the ECFA

One week after Chinese President Hu Jintao (胡錦濤) and Taiwan’s ruling party chief Wu Pu-Hsiung (吳伯雄) agreed in Beijing to discuss the proposed trade deal in June 2009, the Ameri-can Chamber of Commerce in Taipei (AmCham) released its annual White Paper, urging Tai-wan authorities to sign a broad trade agreement with Beijing to avoid falling behind other over-seas markets.⁴⁴

39 Paul Kennedy, “The Greatest Superpower Ever,” New Perspectives Quarterly, Vol. 19, No. 2 (Spring 2002), pp. 8-18.

40 G. John Ikenberry, “Introduction,” in Ikenberry, ed., America Unrivaled: The Future of the Balance of Power (Ithaca, N. Y.: Cornell University Press, 2002), p. 3.

41 Samuel P. Huntington, Op. Cit., p. 37.

42 Kenneth N. Waltz, Op. Cit., pp. 5-41.

43 Ibid., p. 54.

44 Dimitri Bruyas, “Get ready for recovery: US business group,” The China Post (2010/6/3), p. 20. [Accessed Online]

http://www.chinapost.com.tw/taiwan/t-business/2009/06/03/210640/Get-ready.htm

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The U.S. business group stressed at that time that the “Cross-Strait Economic Cooperation Framework Agreement,” a.k.a. ECFA, would cut tariffs and lay the groundwork for more spe-cific trade pacts between the two sides of the strait.⁴⁵

“Taiwan-made products may lose their market competitiveness in China because of the emerg-ing ASEAN plus One, Two or Three trade blocs,” AmCham Chairman Alan T. Eusden said dur-ing the event held for the release of the chamber’s 2009 Taiwan White Paper.

“We therefore appreciate the importance of Taiwan’s negotiating a trade agreement with the mainland such as the ECFA now being discussed. We believe that this is an economic matter that should not be overly politicized,” he added.

With ASEAN, China, Japan and Korea preparing to dismantle trade barriers with one another, the chamber’s annual White Paper points out that without an agreement, important Taiwanese export industries such as petrochemicals and textiles stand to be priced out of the China market by tariff differentials.

Despite several breakthrough achievements in 2009, including the start of regular direct flights between Taiwan and China, Taiwan’s accession to the Government Procurement Agreement (GPA) under the WTO and the Legislative passage of the Internet Service Provider (ISP) bill, Eusden also remarked that “it is crucial that Taiwan take the right steps now to strengthen itself, so that when the recession lifts, this economy can move ahead with renewed vitality.”

According to Foreign Minister Timothy Chin-tien Yang (楊進添), the ECFA between Taiwan and China will definitively help Taiwan become part of the Asian economic integration and avoid marginalization in the region, while creating a win-win-win situation that eventually boosts Taiwan’s international image. During an interview on May 21, 2010, Yang remarked that the reason why Taiwan is negotiating an Economic Cooperation Framework Agreement (ECFA) with China is because the country has strong economic relations with the mainland.⁴⁶

“It has become our number one trading partner; we have so many people doing business and investing in mainland China, so we have to normalize those economic trade relations,” he said.

45 Established in 1951, AmCham, which consists of more than 900 individuals representing more than 500 companies, is one of the oldest and largest foreign business organizations in Taiwan.

46 Interview with Timothy Chin-tien Yang (2010/5/23). Dimitri Bruyas, “ECFA could help with trade deals, Taiwan int’l image: MOFA head,” Discover Taiwan (2010/7/1), p. 8.

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With other countries growing interest in what is going on between Taipei and Beijing, Yang added that after the ECFA is in place, Taiwan will be able to start negotiating similar agree-ments with other major trading partners. “If we don’t join this economic regional integration process Taiwan will be further marginalized,” he pointed out.

Although the opposition Democratic Progressive Party (DPP) and other organizations promot-ing Taiwan independence have been pointpromot-ing to the possible misgivpromot-ings and negative impacts on Taiwan from the ECFA, Yang declined to put to much political consideration on the cross-strait negotiation process.

“Certainly, Taiwan’s international image will be further boosted. And our overall national inter-est will also benefit from those trade arrangements,” he said. If Taiwan signs an ECFA with mainland China, and the United States has a similar agreement with Taiwan, then a “win-win-win situation” will follow, the foreign minister noted. “Taiwan “win-win-wins, the United States “win-win-wins and mainland China wins.”

Thanks to Taiwan’s “flexible diplomacy” with China, Yang remarked that both sides of the Taiwan Strait have also stopped their “tug-of-war” to win over diplomatic allies. “We have al-ready seen the bitter fighting in winning diplomatic allies,” he said.

“If these countries have economic interests to pursue in mainland China … as long as our dip-lomatic relations remain unchanged, they can conduct business with mainland China without changing their diplomatic ties with Taiwan,” he added.

President Ma Ying-jeou has insisted in his two years in office that a “flexible diplomatic” strat-egy could help Taiwan break free from the stigma of checkbook diplomacy and project a new image and status in the international community.

According to Minister Yang, the fundamental principles of Ma Ying-jeou’s diplomacy are pragmatism and dignity. “You have to put yourself in other countries positions and look at the issues we have been looking at.” He went on. “We have been using Chinese Taipei at a number of international organizations, such as the Olympic Games, the World Trade Organization (WTO), the World Health Assembly (WHA) and the Asia-Pacific Economic Cooperation (APEC), the main question is whether we are treated equally as other members.”

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Regarding Taiwan’s recent participation in the WHA, the foreign minister stressed that Taiwan authorities received their invitation at the same time as other observers. “Our treatment at the WHA was the same as other observers received. Our delegates, including the minister of health, could speak at the plenary session of the WHA as well as other important meetings. We also obtained without any difficulties all the necessary documents and information given by the WHO and WHA,” he remarked.

Asked whether such participation is conditional to further improvements in cross-strait relations, he explained that Taiwan was invited as an observer last year and this year, and “all observers get an annual invitation.”

“Our participation in the WHA comes from a number of facts: First, our own efforts and deter-mination – this policy is supported by our own people, in other words we have strong determi-nation and have great interests and efforts to achieve this goal. Second, we gathered strong in-ternational support from the United States, Japan, from the European Union and many other countries as well as professional organizations. Third, we understand that the improvements of relations across the Taiwan Strait are also helpful in the whole situation.”

In this respect, Minister Yang believes that these efforts benefit Taiwanese people, such as the visa free treatment Taiwanese passport holders can now enjoy in the several countries. “Better relations in the Taiwan Strait also benefit our foreign relations,” he said. “When our participa-tion in internaparticipa-tional organizaparticipa-tions improves, and we improve our diplomatic status in the com-munity of nations, this also benefits our cross-strait relations because our people will be more willing to improve our relations with China. This part I would call a ‘Virtuous Cycle,’” he add-ed.

Richard C. Bush, former AIT chairman and director of the Brookings Institution’s Center for Northeast Asian Policy Studies, also acknowledge that the ECFA will further help Taiwan be-come part of the Asian economic integration and avoid marginalization in the region.⁴⁷ The U.S.

scholar anticipates that “increasing power in China could affect Taiwan’s economic develop-ment;” he noted that “seeking to join international economic and trade organizations could be a feasible approach for Taiwan to maintain its economic momentum.”

47 CNA staff writer, “ECFA could help with trade deals: ex-AIT chair,” The China Post (2010/5/31), p. 20. [Accessed Online]

http://www.chinapost.com.tw/taiwan/national/national-news/2010/05/31/258738/ECFA-could.htm

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Since China and the Association of Southeast Asian Nations (ASEAN) established a regional free trade area in January this year, Bush remarked that Taiwan has been at risk of marginaliza-tion if it fails to sign free trade agreements (FTAs) with key trading partners. Although the ECFA could bring possible benefits and disadvantages for Taiwan, Bush stressed that “it cannot be ignored that the pact would enable Taiwan to join regional economic integration.”

Also attending the aforesaid seminar in company of Richard C. Bush, Su Chi (蘇起), former secretary-general of Taiwan’s National Security Council (國家安全會議), cited various opinion polls to support his argument that most Taiwanese people do not support Taiwan independence or unification with China. Instead he noted that most people want to maintain the status quo and hope that pragmatic engagement with China will create more benefits for Taiwan.