China Programme • Volume 12 • Number 37 • 6th November 2008

Taiwan, China Lower Trade Barriers in Ground-Breaking Pact

Discuss this articleShare your views with other visitors, and read what they have to say

In a landmark deal signed on Tuesday, leaders from China and Taiwan agreed to open up their sea ports and dramatically increase air traffic between the two countries.

The agreement puts on hold sovereignty disputes that have prevented such cooperation for nearly six decades. China has considered Taiwan a breakaway province since the two countries split amid a civil war in 1949. Beijing has since declared that it will bring Taiwan back under mainland control, even if that means using military force.

But tensions have eased since the election in March of Taiwanese President Ma Ying-jeou, whose Nationalist Party supports eventual reunification with the mainland. Ma has promised to build closer economic ties with China and work to de-fuse military tensions between the two countries.

The agreement, which will take effect in 40 days, will allow cargo ships to travel directly between 63 seaports in China and 11 in Taiwan. Such shipments have long been routed through the Japanese island of Okinawa, at significant additional cost.

Indeed, Taipei prohibited direct shipping and flights with the mainland for more than half a century out of fear that ostensibly civilian boats or planes might be Chinese war vessels in disguise.

“The direct shipping will finally help Taiwan become a transport hub in Asia and better explore the mainland market,” the Taiwanese envoy Chiang Pin-kung told journalists after the meeting, AP reported. “With each cruise, they won’t have to go to Okinawa, and they save about 16 hours and cut costs by between 15 and 30 percent,” he said.

The agreement also opens up airways between the two countries, allowing 60 cargo flights per month and 108 charter flights per week. Commercial flights will be able to operate seven days per week, as opposed to only four, once the deal takes effect.

The two countries also said they would set up systems to resolve trade disputes, streamline postal service and increase cooperation on food safety.

ICTSD reporting; “Taiwan, China envoys sign historic trade pact,” AP, 4 November 2008; “Taiwan and China sign trade deals,” REUTERS, 4 November 2008.