The recent Taiwan regional leadership election has set the stage for a more turbulent future in cross-Straits economic relations. As Taiwan authorities navigate the aftermath, the path forward faces increased challenges and uncertainties.
At the heart of the tension lies the Economic Cooperation Framework Agreement (ECFA), a cornerstone for trade between Taiwan and the Chinese mainland. Since its inception, the economic exchanges under ECFA have been markedly uneven. The mainland reduced tariffs on 539 Taiwanese products, while Taiwan reciprocated with reductions on just 267 mainland products.
As of 2022, Taiwan reaped substantial benefits from ECFA, enjoying tariff preferences worth approximately $134.53 billion for its exports to the mainland, compared to the mainland's $25.1 billion for its exports to Taiwan. This disparity highlights the unequal advantages within the agreement.
Compounding the issue, Taiwan has not fully honored its commitments under ECFA. Instead, authorities have imposed restrictions on over 2,500 types of mainland imports, creating significant trade barriers. This move has disrupted the initial intent of fostering normalized and liberalized economic relations.
In response, the Chinese mainland has taken decisive action. Starting with the suspension of tariff concessions for 12 ECFA-listed products at the end of last year, the mainland has recently announced further suspensions, signaling a firm stance against unilateral measures.
Looking ahead, while tariff concessions represent a fraction of cross-Straits trade, shifts in Taiwan's investment strategies could have profound implications for future economic interactions. The mainland remains committed to maintaining fairness and rule-based exchanges, navigating the evolving landscape with strategic countermeasures.
Reference(s):
Cross-Straits economic cooperation suppressed after Taiwan election
cgtn.com
