Major and Classification
East Asian Area Studies
- Daniel Lynch, Ph.D.
- International Relations
McNair ProjectEvaluating the Cross-Strait Economic Cooperation Framework Agreement (ECFA) on Taiwan's International Representation
Signing the 2010 Cross-Straits Economic Cooperation Framework Agreement (ECFA) showed not only how vital the Chinese economy is to Taiwan, but it also showed how Chinese approval greatly affected Taiwan's international standing in economic cooperation agreements and intergovernmental organizations (IGOs). After the ECFA was signed, Taiwan's economy rebounded after the 2008 financial crisis. Taiwan's Legislative Yuan passed legislation which made its economy incredibly attractive for foreign investment, yet, Taiwan's international representation and economic agreements only grew with two new bilateral free trade agreements (FTAs) in 2013. Two new FTAs are not enough for Taiwan's international representation. Taiwan has not been able to join any multilateral economic agreements or IGOs since 2010; Taiwan has been stagnant. Taiwan should consider a few policy options so it can maintain its economic growth while also increasing its international standing. Taiwan could (1) maintain the status quo, (2) preserve the ECFA while focusing on bilateral FTAs, (3) along with the ECFA, shift its focus to multilateral agreements or (4) terminate the ECFA. The first three options would continue to support Taiwan's economy; however maintaining the status quo and bilateral FTA policies would only bring minimal economic benefits. A multilateral agreement focus would allow Taiwan more political freedom, along with greater economic benefits all while maintaining good relations with China. The last option would give Taiwan much more political and economic freedom and improve public opinion of the Taiwanese government, but it would endanger Taiwan's security while losing international opportunities. After examining the policy options, this paper recommends that the Taiwanese government pursue the third policy option, sustain the ECFA while focusing on multilateral agreements and IGOs because it will reap the most economic benefits and foreign direct investments, while keeping good relations with China, so Taiwan can cultivate other international relationships.