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Erixon, Fredrik
Krol, Michal
Macyra, Natalia
ECIPE Occasional Paper 3/2012
Taiwan is not part of the group of countries with whom the European Union is negotiating Free Trade Agreements (FTAs), or equivalent accords to free up bilateral trade. This paper, which builds on a 2010 study by ECIPE scholars on the potential gains from a EU-Taiwan free trade accord, argues that the EU should revisit its approach towards Taiwan and take account of recent developments as regards cross-Strait rapprochement. In mid 2010, Taiwan and China signed an Economic Cooperation Framework Agreement (ECFA) that progressively will open up for trade and investments between them. It is difficult to exaggerate the political and economic significance of the ECFA. After decades of charged commercial-policy relations, the relation is now defrosting. If ECFA delivers on its promises, Taiwan will especially benefit by obtaining access to one of the biggest markets in the world. Taiwanese businesses have been active in China for a long time, but predominantly through investments. Now more direct trade and commercial relations can be agreed. An estimate by the Peterson Institute suggests that Taiwan could benefit from ECFA to the tune of a 4.5% increase of Gross Domestic Product by 2020. (...)
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