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China; Taiwan: Three Economic Cooperation Agreements Signed

(Dec. 31, 2009) On December 22, 2009, China and Taiwan signed three agreements to further bilateral economic cooperation — on fishing crew cooperation; agricultural quarantine inspection; and industrial product standards, inspection, and certification. Representatives of the two sides also agreed to hold discussions in the first half of 2010 on a proposed economic cooperation framework agreement (ECFA) and on intellectual property rights issues. The scheduled signing of a fourth cooperative pact, on avoidance of double taxation, was postponed until 2010, due to unresolved disputes over certain details. (Yu-Tzu Chiu, Taiwan, China Sign Additional Agreements to Boost Economic Ties, BNA DAILY REPORT FOR EXECUTIVES, Dec. 24, 2009, available at

The signing took place at the fourth meeting on cross-Strait negotiations held since June 12, 2008, following the return to power in May of that year of Taiwan's Kuomintang (Nationalist Party). Before that time, the talks had been suspended for about a decade. The first three meetings saw nine agreements signed, on such matters as tourism to Taiwan, airline flights, direct shipping, postal services, financial services, and anti-crime cooperation. (Id.) The three new agreements will take effect within 90 days of the signing. (Crystal Hsu & Alex Pevzner, Taiwan, China Sign 3 Accords, THE WALL STREET JOURNAL, Dec. 23, 2009, available at

Taiwan reportedly hopes that the conclusion of a broad-based ECFA, to which the December negotiations may lead, “will mitigate the impact of closer integration between China and Southeast Asian economies in 2010,” especially because “China is Taiwan's largest export destination … .” (Id.) While the ECFA would bring about the removal of tariffs on a number of cross-Strait traded goods, a large inflow of inexpensive agricultural and other products from China (e.g., shoes, garments, and automobile parts) engendered by the agreement might undermine Taiwan's economy. (Id.; Chiu, supra.)

Nevertheless, Taiwan Premier Wu Den-yih has reiterated that the government will adhere to three preconditions it has set for the signing of the ECFA: that it be consistent with Taiwan's needs, meet with public favor, and be subject to the legislature's supervision. The government is opposed to holding a referendum on the ECFA, Wu stated, “because if it is rejected at the polls, no other referendum on the same issue will be allowed for three years.” (Lee Ming-chung & Y.F. Low, ECFA to Be Signed Under Three Preconditions: Premier,CNA, Dec. 29, 2009, available at