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Jul 06, 2010, 07.15 PM IST | Source: Reuters

China signals nod for Taiwan FTAs: Policymaker

China has signalled that it will let Taiwan sign free trade agreements with major trading partners via the World Trade Organisation, removing an obstacle to a plank in the USD 390 billion island economy's long-term growth strategy.

China signals nod for Taiwan FTAs: Policymaker

China has signalled that it will let Taiwan sign free trade agreements with major trading partners via the World Trade Organisation, removing an obstacle to a plank in the USD 390 billion island economy's long-term growth strategy.

Chinese officials told Taiwan counterparts last week, close to the signing their own historic trade deal, that the island as a WTO member could pursue pacts with other member economies, sidestepping sensitive issues of sovereignty, a senior policymaker told Reuters on Tuesday.

China, which claims the self-ruled island as its own and seeks to stop it from doing any official business with foreign governments, had previously used its diplomatic clout to block FTAs that would lift Taiwan's export-led economy.

But Beijing, keen to charm Taiwan into eventual political unification, would relent if deals were signed under the WTO framework. Taiwan had already begun moving ahead with that understanding, Kao Charng, vice-chairman of Taiwan's Mainland Affairs Council, said in an interview.

"Taiwan as a WTO member already has the right to sign economic deals, and the meaning of those is not the same as an official agreement," Kao said. "As long as it doesn't apply to political sovereignty, mainland China shouldn't oppose it."

"I believe they won't oppose it," he said. "They will look at it according to the situation and what's fair."

Some of Taiwan's Asian trading partners have expressed strong interest in pursuing FTAs in light of the economic cooperation framework agreement (ECFA) signed last week between China and Taiwan, local officials say.

Taiwan wants FTAs with Japan and major Southeast Asian nations to stay competitive with regional rivals. Prospects for FTAs have played well with Taiwan's public as it hopes the deals will diversify the economy while avoiding over-reliance on political rival China.

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