When Taiwan and China signed the Economic Cooperation Framework Agreement (ECFA) in June 2010, it meant opening the door for deeper economic ties across the Taiwan Strait but it was also a significant milestone after decades of hostilities and confrontation.
When Taiwanese President Ma Ying-jeou took office two years ago, he wanted to improve on relations which, for more than a decade, had soured to the point of several mini-crises. China reciprocated accordingly.
Travel for business or pleasure has never been easier. More than 370 direct flights go between Taiwan and China each week, both ways. The flight from Taipei to Shanghai takes only 90 minutes and last year, 5.5 million visits took place across the Strait. Three million of them were the direct result of a ban that was lifted on direct flights.
Among the 14 cross-strait agreements signed between Taiwan and China under President Ma’s administration, ECFA is the most significant one. The key to its speedy negotiations and effective implementation in the future is the “early harvest” mechanism, which sets out the elimination of tariffs on products ranging from petrochemical, steel and iron, textiles, machinery and auto parts, to even the most sensitive agricultural items. Tariffs on 539 Taiwanese products worth CAD$460 million and 267 Chinese goods worth CAD$95 million are expected to be phased out in two years.
While ECFA is economically beneficial to Taiwan and China, windows of opportunity open for Canada at the same time. I have discussed this with Canadian government and business leaders and they are extremely interested in the implications of this new trade era.
Taiwan has been a major, active trading country and known powerhouse of information and communication technologies internationally for decades while Canada has been equally competitive in the same areas. Collaboration between the two countries has been steady. After the global economic meltdown in 2008, the world economy is gradually reshaping itself with the robust growth in the BRIC (Brazil, Russia, India and China) countries, most notably China. Today, China is no longer just a factory to the world but a consumer market with formidable potential. Needless to say, access to this market with Taiwan in the post-ECFA era is strategically important for Canada.
Last year, when I was invited to testify before the Canadian Senate, I cited three examples of successful partnerships in which Canadian businesses worked with Taiwanese counterparts to access the Greater China market.
Vancouver’s Intrinsyc developed a software package to accelerate logistic information integration between Taiwan’s Quata Computer, the world’s No. 1 notebook manufacturer, and its plants in China. And Taiwan’s TSMC, the world’s largest semi-conductor foundry, acquired Kanata’s Emerging Memory Technologies Inc. (EMT) to support its design capabilities around the world, including China. Finally, after its successful acquisition of Taiwan’s Ulead Systems, Ottawa’s Corel transformed Ulead into an R&D and marketing hub for its Greater China market which includes the 1.2 billion Chinese-speaking people in Taiwan, Singapore, Hong Kong, Macau and China and is a driving engine of the global economy. The connection of the three countries in the global supply chains such as this demonstrates the “triple-win model to prosperity” I like to emphasize.
Speaking the same language, sharing a common heritage, having a deep understanding of the nuances of the Chinese business and political culture and, above all, accumulating two decades of both positive and negative experiences, all constitute advantages behind Taiwan’s success stories.
Just like many multinationals that made Canada their gateway to North America at the birth of NAFTA, Canada should make Taiwan Canada’s gateway to Greater China in the post-ECFA era. With more liberalized trade, investment, transportation and travel across the Strait, Taiwan can serve as a springboard for Canadian companies wishing to build up their footprint in Greater China.
David T. Lee is the representative of the Taipei Economic and Cultural Office in Ottawa. Contact him at tecoinfo@taiwan-canada.org 613-231-4203.
