Background Information No.083
The international press recently reported that the signing of an economic cooperation agreement (ECA) between the Republic of China (Taiwan) and New Zealand on July 10, 2013 was highly significant. The agreement has continued to receive coverage from such media outlets as the UK’s The Economist and the Asian edition of Financial Times, Singapore’s Lianhe Zaobao, and Australia Network News.
In a July 13 report, The Economist pointed out that the trade pact concluded on July 10 was the ROC’s “first with a country that recognizes China,” noting that “given that China did not frustrate the deal, and that New Zealand is a developed western democracy, it is a notable diplomatic coup.” It also observed that Taiwan hopes “the New Zealand deal and a similar one due with Singapore will persuade others, such as India, to do the same” and it may “one day join regional blocks, such as the growing Trans-Pacific Partnership.”
Financial Times reported in its July 12 Asian edition that “in the past month, Taiwan has struck two major foreign investment agreements. The first, an agreement with [mainland] China to liberalize trade in many services. The second, a free trade agreement with New Zealand lifting nearly all tariffs on bilateral trade.” The article called the latter “an important precedent as Taiwan’s first-ever free trade agreement with a nation without formal diplomatic ties with Taiwan,” adding that ROC economists and officials believe it could open the way to more such agreements, including one with Singapore soon.
In a July 11 news report, Lianhe Zaobao quoted ROC Minister of Foreign Affairs David Y. L. Lin as saying that the pact would encourage other countries to sign ECAs with the ROC. It was, he said, a declaration of the ROC’s commitment to free trade and would create conditions for its accession to the TPP and Regional Comprehensive Economic Partnership (RCEP). The report also quoted Minister of Economic Affairs Chang Chia-juch as saying that the ROC-New Zealand ECA carried strategic significance and its signing set a major precedent for future efforts.
Australia Network News also noted in a July 12 report that the ROC-New Zealand ECA was the ROC’s “first accord with a developed economy.” It quoted Phil Goff, a former trade minister of New Zealand, as saying that trade with Taiwan will have immediate effects, and that “tariffs will be removed off nearly half of all of our exports to Taiwan, and after four years that’ll be up around 98-99 percent.”(E)