Business, Finance & Economics

Strait of confusion: China-Taiwan trade

Updated:

TAIPEI, Taiwan —  It may sound like an infectious disease. But for Taiwan's government, ECFA is the tonic the island's economy desperately needs.

ECFA is a proposed trade deal — or economic cooperation framework agreement — between China and Taiwan. First mooted last year, it was in the news again in recent days as more talks were held at a swank resort south of Taipei. Taiwan hopes to ink the deal by June.

Too bad most Taiwanese can't figure out what it's all about.

"I don't really understand ECFA," said Julia Hsieh, 32, who works in the hotel industry in Taipei.

"I don't know what the real impact on Taiwan will be after we sign it. We already have a lot of economic exchanges now, so what difference will ECFA make? There's an advantage for the government, but not necessarily for normal people."

She's not the only one in the dark. According to a recent poll by Taiwan's pro-independence opposition party, 78 percent of Taiwanese are stumped by the deal.

That puzzlement is a problem for Taiwan's China-friendly president, Ma Ying-jeou. He wants the economic pact in order to seal his record as a peacemaker in the Taiwan Strait ahead of a 2012 re-election bid. But Taiwan being a democracy, he also wants the public on board.

So the government has launched a PR campaign to boost support for the deal, complete with hip ads shown on TV and the web. Last December it was a rap-techno video that put lyrics about banned Chinese agricultural imports to a throbbing dance beat.


A couple weeks ago the government released another ad, this one with a foreigner dressed as the God of Fortune, trying to get into Taiwan's locked doors.

Inside, a young man tries to convince an elder to support ECFA, saying that otherwise Taiwan could become an economic pariah like North Korea.

After much brow-knitting, the elder finally says "yes," the family cheers, the doors are thrown open and the Caucasian god of fortune strides in.

"The god of fortune means foreign investors," said a government official who was not authorized to talk to the media. "That's why we got a foreigner to play that part."

ECFA would lay out rules of the road for further cross-strait economic cooperation and tariff cuts. It's also expected to include an "early harvest" list of trade items to see the first cuts.

According to a government-backed study, the deal could help bring in nearly $9 billion in foreign investment and boost Taiwan's GDP. Pro-ECFA economists say the deal is Taiwan's ticket to the Asian free trade party.

"Every other country has signed agreements with other East Asian countries," said Liu Bih Jane, vice president of the Chung-hua Institution for Economic Research, which conducted the ECFA impact study for the government. "Only Taiwan and North Korea have been left out."

But the government's slick PR efforts don't seem to be paying off. According to the most recent poll from the pro-government TV channel TVBS, only 35 percent supported ECFA, down 11 percent from six months ago. Meanwhile, 32 percent opposed ECFA and the rest had no view.

The government's up against two big hurdles in selling the deal.

First is the distrust many Taiwanese feel about China. Despite its recent goodwill gestures, Beijing still has hundreds of missiles pointed at the island and an explicit goal of political unification. In a recent poll, 53 percent of Taiwanese listed Japan as their favorite country, with only 5 percent choosing China. 

Mistrust of China was on display last week, as a small group of protesters scuffled with police outside the trade talks venue, and held up banners calling for a referendum on the deal.

The second hurdle is that talking seriously about ECFA involves mind-numbing jargon about rules of origin, WTO obligations, even the "Heckscher–Ohlin model" of international trade.

No wonder a lot of Taiwanese can't be bothered to figure it all out.

"It's a subject for professionals, most laobaixing [regular people] don't really understand it," said cab driver Chen Ji-hsin. "We don't know what it has to do with our lives, and whether it's good for us or bad."