Economic Cooperation Framework Agreement
Encyclopedia
The Economic Cooperation Framework Agreement (ECFA) is a preferential trade agreement between the governments of the People's Republic of China
(mainland China
) and the Republic of China
(Taiwan
) that aims to reduce tariffs and commercial barriers between the two sides. The pact, signed on June 29, 2010, in Chongqing
, was seen as the most significant agreement since the two sides split after the Chinese Civil War
in 1949. It will boost the current US$ bilateral trade between both sides.
to prevent them from signing free-trade agreements (FTAs) with Taiwan. Instead, under the leadership of the Kuomintang
, Taipei
was motivated to sign the ECFA with mainland China partly in hope that once it has this agreement the PRC will stop pressuring other countries to avoid such agreements with Taiwan. The ECFA has been compared with the Closer Economic Partnership Arrangement
s mainland China signed with the Special Administrative Region
s: Hong Kong
and Macau.
The deal is thought to be structured to benefit Taiwan far more than mainland China. The "early harvest" list of tariff concessions covers 539 Taiwanese products and 267 mainland Chinese goods. The advantage to Taiwan would amount to , while mainland China would receive benefits estimated at . Mainland China will also open markets in 11 service sectors such as banking, securities, insurance, hospitals and accounting, while Taiwan agreed to offer wider access in seven areas, including banking and movies.
(SEF), led the 13 member Taiwanese delegation while Zheng Lizhong, Vice President of the Association for Relations Across the Taiwan Straits
(ARATS), represented China's interests. Subsequent rounds of ECFA talks took place on March 31, 2010 in Taipei and June 13, 2010 in Beijing. The final agreement was signed during the 5th round of SEF-ARATS talks on June 29, 2010 in Chongqing
. Chiang Pin-kung
, the chairman of Taiwan's SEF represented Taiwan. Chen Yunlin
, the President of ARATS, represented mainland China. Taiwan's Executive Yuan
approved the ECFA on July 2, 2010 and the Legislative Yuan
(parliament) approved the deal on August 17th, meaning the deal became law on January 1, 2011. The ECFA came into effect on September 12, 2010.
(DPP) and other pro independence
groups believe the ECFA is a cover for unification with China
. It neither accord the same rights as a Free Trade Agreement which will reduce manufacturing jobs and average salary, nor accelerate capital outflow
and brain drain
of management and technology expertise. The opponents of the ECFA also indicated concerns about allowing the influx of mainland Chinese white-collar worker
s or professionals to work in Taiwan which could put the job security
of locals at risk. A debate was held and televised on April 25, 2010.
, Taiwan just 3 days before the signing of the agreement on June 26, 2010. The protest originally estimated a turnout of 100,000 people. The DPP said 100,000 took part in the protest, while the police said there were 32,000 people. The crowd began on the streets at 3pm and were dismissed by 7pm.
meeting was held. The DPP insisted the ECFA agreement be reviewed article by article. That demand was rejected by the KMT caucus. A six minute fight then broke out among the legislators. Wang Jin-pyng
was at the podium surrounded by other KMT legislators. Liu Chien-kuo (劉建國), Chen-ching (蘇震清) and Kuo Wen-chen (郭玟成) attempted to get to him and failed. Lawmakers threw paper, water and trash at each other. KMT legislator Wu Yu-sheng (吳育昇) was hit in the head by a clock. He had to be transported to National Taiwan University Hospital
. A number of other people were involved in the scuffle. Two KMT legislators held DPP chairwoman Tsai Ing-wen
responsible for the clash.
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
(mainland China
Mainland China
Mainland China, the Chinese mainland or simply the mainland, is a geopolitical term that refers to the area under the jurisdiction of the People's Republic of China . According to the Taipei-based Mainland Affairs Council, the term excludes the PRC Special Administrative Regions of Hong Kong and...
) and the Republic of China
Republic of China
The Republic of China , commonly known as Taiwan , is a unitary sovereign state located in East Asia. Originally based in mainland China, the Republic of China currently governs the island of Taiwan , which forms over 99% of its current territory, as well as Penghu, Kinmen, Matsu and other minor...
(Taiwan
Taiwan
Taiwan , also known, especially in the past, as Formosa , is the largest island of the same-named island group of East Asia in the western Pacific Ocean and located off the southeastern coast of mainland China. The island forms over 99% of the current territory of the Republic of China following...
) that aims to reduce tariffs and commercial barriers between the two sides. The pact, signed on June 29, 2010, in Chongqing
Chongqing
Chongqing is a major city in Southwest China and one of the five national central cities of China. Administratively, it is one of the PRC's four direct-controlled municipalities , and the only such municipality in inland China.The municipality was created on 14 March 1997, succeeding the...
, was seen as the most significant agreement since the two sides split after the Chinese Civil War
Chinese Civil War
The Chinese Civil War was a civil war fought between the Kuomintang , the governing party of the Republic of China, and the Communist Party of China , for the control of China which eventually led to China's division into two Chinas, Republic of China and People's Republic of...
in 1949. It will boost the current US$ bilateral trade between both sides.
Background
The government of the People's Republic of China uses its influence on neighboring economic powersEconomy of Asia
The economy of Asia comprises more than 4 billion people living in 46 different states. Six further states lie partly in Asia, but are considered to belong to another region economically and politically...
to prevent them from signing free-trade agreements (FTAs) with Taiwan. Instead, under the leadership of the Kuomintang
Kuomintang
The Kuomintang of China , sometimes romanized as Guomindang via the Pinyin transcription system or GMD for short, and translated as the Chinese Nationalist Party is a founding and ruling political party of the Republic of China . Its guiding ideology is the Three Principles of the People, espoused...
, Taipei
Government of the Republic of China
The Republic of China was formally established by Dr. Sun Yat-sen in 1912 in Nanjing under the Provisional Constitution of the Republic of China but this government was moved to Beijing in the same year and continued as the internationally recognized government of China until 1928. In the history...
was motivated to sign the ECFA with mainland China partly in hope that once it has this agreement the PRC will stop pressuring other countries to avoid such agreements with Taiwan. The ECFA has been compared with the Closer Economic Partnership Arrangement
Closer Economic Partnership Arrangement
Closer Economic Partnership Arrangement are economic and trade agreement between the separate customs territories within the People's Republic of China....
s mainland China signed with the Special Administrative Region
Special administrative region
A special administrative region, or SAR may be:People's Republic of China* Special Administrative Region of the People's Republic of China, self-governing country subdivision in Hong Kong and Macau...
s: Hong Kong
Mainland and Hong Kong Closer Economic Partnership Arrangement
The Mainland and Hong Kong Closer Economic Partnership Arrangement, or Closer Economic Partnership Arrangement for short, is an economic agreement between the Government of the Hong Kong Special Administrative Region and the Central People's Government of the People's Republic of China, signed on...
and Macau.
The deal is thought to be structured to benefit Taiwan far more than mainland China. The "early harvest" list of tariff concessions covers 539 Taiwanese products and 267 mainland Chinese goods. The advantage to Taiwan would amount to , while mainland China would receive benefits estimated at . Mainland China will also open markets in 11 service sectors such as banking, securities, insurance, hospitals and accounting, while Taiwan agreed to offer wider access in seven areas, including banking and movies.
Signing and review
The negotiation process took place over several rounds. Substantive yet informal discussions regarding the ECFA initially took place during the 4th round of SEF-ARATS discussions in December 2009. During this time the delegates for China and Taiwan laid down the framework for the first round of ECFA talks which took place on January 26, 2010 in Beijing. Kao Koong-lian, secretary general and vice chairman of the Straits Exchange FoundationStraits Exchange Foundation
The Straits Exchange Foundation is a semi-official organization set up by the Republic of China government to handle technical or business matters with the People's Republic of China...
(SEF), led the 13 member Taiwanese delegation while Zheng Lizhong, Vice President of the Association for Relations Across the Taiwan Straits
Association for Relations Across the Taiwan Straits
The Association for Relations Across the Taiwan Straits is an organization set up by the People's Republic of China for handling technical or business matters with the Republic of China ....
(ARATS), represented China's interests. Subsequent rounds of ECFA talks took place on March 31, 2010 in Taipei and June 13, 2010 in Beijing. The final agreement was signed during the 5th round of SEF-ARATS talks on June 29, 2010 in Chongqing
Chongqing
Chongqing is a major city in Southwest China and one of the five national central cities of China. Administratively, it is one of the PRC's four direct-controlled municipalities , and the only such municipality in inland China.The municipality was created on 14 March 1997, succeeding the...
. Chiang Pin-kung
Chiang Pin-kung
Chiang Pin-kung is a politician in the Republic of China on Taiwan. He is currently vice-chairman of the Kuomintang , and chairman of Straits Exchange Foundation .-Biography:...
, the chairman of Taiwan's SEF represented Taiwan. Chen Yunlin
Chen Yunlin
Chen Yunlin is the current chairman of the Association for Relations Across the Taiwan Straits , the body responsible for negotiations with Taiwan in the People's Republic of China.-Biography:...
, the President of ARATS, represented mainland China. Taiwan's Executive Yuan
Executive Yuan
The Executive Yuan is the executive branch of the government of the Republic of China , commonly known as "Taiwan".-Organization and structure:...
approved the ECFA on July 2, 2010 and the Legislative Yuan
Legislative Yuan
The Legislative Yuan is the unicameral legislature of the Republic of China .The Legislative Yuan is one of the five branches of government stipulated by the Constitution of the Republic of China, which follows Sun Yat-sen's Three Principles of the People...
(parliament) approved the deal on August 17th, meaning the deal became law on January 1, 2011. The ECFA came into effect on September 12, 2010.
Debate
There is currently much controversy in Taiwan over the ECFA, including over potential effects on local Taiwanese businesses, as well as on how the government has presented it to the public. The opposition Democratic Progressive PartyDemocratic Progressive Party
The Democratic Progressive Party is a political party in Taiwan, and the dominant party in the Pan-Green Coalition. Founded in 1986, DPP is the first meaningful opposition party in Taiwan. It has traditionally been associated with strong advocacy of human rights and a distinct Taiwanese identity,...
(DPP) and other pro independence
Taiwan independence
Taiwan independence is a political movement whose goals are primarily to formally establish the Republic of Taiwan by renaming or replacing the Republic of China , form a Taiwanese national identity, reject unification and One country, two systems with the People's Republic of China and a Chinese...
groups believe the ECFA is a cover for unification with China
Chinese reunification
Chinese reunification refers to the bringing together of all of the territories controlled by the People's Republic of China and the Republic of China under a single political entity...
. It neither accord the same rights as a Free Trade Agreement which will reduce manufacturing jobs and average salary, nor accelerate capital outflow
Capital Outflow
Capital outflow is an economic term describing capital flowing out of a particular economy. Outflowing capital can be caused by any number of economic or political reasons but can often originate from instability in either sphere....
and brain drain
Brain drain
Human capital flight, more commonly referred to as "brain drain", is the large-scale emigration of a large group of individuals with technical skills or knowledge. The reasons usually include two aspects which respectively come from countries and individuals...
of management and technology expertise. The opponents of the ECFA also indicated concerns about allowing the influx of mainland Chinese white-collar worker
White-collar worker
The term white-collar worker refers to a person who performs professional, managerial, or administrative work, in contrast with a blue-collar worker, whose job requires manual labor...
s or professionals to work in Taiwan which could put the job security
Job security
Job security is the probability that an individual will keep his or her job; a job with a high level of job security is such that a person with the job would have a small chance of becoming unemployed.-Factors affecting job security:...
of locals at risk. A debate was held and televised on April 25, 2010.
Protest
An Anti-ECFA protest was held in TaipeiTaipei
Taipei City is the capital of the Republic of China and the central city of the largest metropolitan area of Taiwan. Situated at the northern tip of the island, Taipei is located on the Tamsui River, and is about 25 km southwest of Keelung, its port on the Pacific Ocean...
, Taiwan just 3 days before the signing of the agreement on June 26, 2010. The protest originally estimated a turnout of 100,000 people. The DPP said 100,000 took part in the protest, while the police said there were 32,000 people. The crowd began on the streets at 3pm and were dismissed by 7pm.
Clash in the legislature
On July 8, 2010 a Legislative YuanLegislative Yuan
The Legislative Yuan is the unicameral legislature of the Republic of China .The Legislative Yuan is one of the five branches of government stipulated by the Constitution of the Republic of China, which follows Sun Yat-sen's Three Principles of the People...
meeting was held. The DPP insisted the ECFA agreement be reviewed article by article. That demand was rejected by the KMT caucus. A six minute fight then broke out among the legislators. Wang Jin-pyng
Wang Jin-pyng
Wang Jin-pyng , Taiwan, Empire of Japan), Taiwanese politician, is the President of the Legislative Yuan. As one of the leading figures of the Kuomintang, Wang is considered to be soft-spoken and a conciliatory figure.-Early life:...
was at the podium surrounded by other KMT legislators. Liu Chien-kuo (劉建國), Chen-ching (蘇震清) and Kuo Wen-chen (郭玟成) attempted to get to him and failed. Lawmakers threw paper, water and trash at each other. KMT legislator Wu Yu-sheng (吳育昇) was hit in the head by a clock. He had to be transported to National Taiwan University Hospital
National Taiwan University Hospital
National Taiwan University Hospital started operations under Japanese rule in Dadaocheng on June 18, 1895, and moved to its present location in 1898. The Hospital was later annexed to the Medical School of Taipei Imperial University and renamed Taipei Imperial University Medical School Affiliated...
. A number of other people were involved in the scuffle. Two KMT legislators held DPP chairwoman Tsai Ing-wen
Tsai Ing-wen
Tsai Ing-wen is the current chairperson of the Democratic Progressive Party in Taiwan. Studying in Taiwan, the U.S and the U.K. Tsai earned an LL.B. from National Taiwan University, an LL.M. from Cornell University Law School and a Ph.D. from the London School of Economics....
responsible for the clash.
See also
- Cross-Strait relationsCross-Strait relationsCross-Strait relations refers to the relations between People's Republic of China and the Republic of China , which lie to the west and east, repectively, of the Taiwan Strait in the west Pacific Ocean....
- Political status of TaiwanPolitical status of TaiwanThe controversy regarding the political status of Taiwan hinges on whether Taiwan, Penghu, Kinmen, and Matsu should remain effectively independent as territory of the Republic of China , become unified with the territories now governed by the People's Republic of China , or formally declare...
- Closer Economic Partnership ArrangementCloser Economic Partnership ArrangementCloser Economic Partnership Arrangement are economic and trade agreement between the separate customs territories within the People's Republic of China....
External links
- English translation of the Economic Cooperation Framework Agreement Ministry of Economic Affairs, Republic of China
- Taiwan Affairs Office of the State Council
- Straits Exchange Foundation