Space for Taiwan in regional economic integration

Abstract

Taiwan businesses and policymakers recognise the importance of actively participating in regional economic integration agreements in the Asia-Pacific to avoid marginalisation from the emerging economic community. This has been a challenge due to Taiwan’s position in the international system and Beijing’s opposition to Taipei negotiating state-to-state agreements. The signing of the economic cooperation agreement with New Zealand (Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Cooperation, July 2013) and the economic partnership agreement with Singapore (Agreement between Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Partnership, November 2013) shows that an alternative pathway for participating in regional economic integration is possible. Based on extensive interviews in Taipei, the article identifies a framework for this pathway with three enablers and constraints: first, the use of the World Trade Organization nomenclature (Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu); second, improved cross-strait relations and the signing of the Cross-Strait Economic Cooperation Framework Agreement (2010); and, third, growth in the number of countries with existing preferential economic agreements and good relations with the People’s Republic of China. This framework is discussed as one of four possible pathways to greater participation in regional integration with reference to potential trade agreements in the region and Beijing’s one China policy.