The FTA Music is Playing in Asia: After ECFA, Will Taiwan Join the Dance?

International Trade Journal 26(1): 61-75, doi 10.1080/08853908.2012.631870

15 Pages Posted: 19 Dec 2012

See all articles by Peter Chow

Peter Chow

City University of New York (CUNY)

Dan Ciuriak

Ciuriak Consulting Inc.; Centre for International Governance Innovation (CIGI); C.D. Howe Institute; Asia Pacific Foundation of Canada; BKP Development Research & Consulting GmbH

Date Written: December 2011

Abstract

In the context of stalled multilateral trade negotiations, major trading economies are seeking free trade agreements (FTAs) to secure their market access objectives. Nowhere is this dynamic stronger than in East Asia, where a web of bilateral and plurilateral agreements is stitching together piecewise an Asian free trade area that could plausibly rival the EU and NAFTA trade blocs, and where the possibility of a formal pan-Asian agreement has been raised. Taiwan has been largely excluded from this dynamic. However, with the June 29, 2010 signing of the Economic Cooperation Framework Agreement (ECFA) with China, the possibility of Taiwan joining the FTA dance in East Asia would appear to have been greatly strengthened as the advocates had anticipated. This paper considers the economic and trade implications of Taiwan’s participation versus non-participation in an emerging East Asian trade bloc. We support our analysis with simulations using the GTAP computable general equilibrium model. The paper finds that the benefits to Taiwan of participating in such a bloc have increased, as have the opportunity costs of exclusion, as the share of East Asian partners’ in its trade has risen.

Keywords: Taiwan, China, free trade agreements, East Asian regionalism

JEL Classification: F14, F15

Suggested Citation

Chow, Peter and Ciuriak, Dan, The FTA Music is Playing in Asia: After ECFA, Will Taiwan Join the Dance? (December 2011). International Trade Journal 26(1): 61-75, doi 10.1080/08853908.2012.631870 , Available at SSRN: https://ssrn.com/abstract=2190972

Peter Chow

City University of New York (CUNY)

695 Park Avenue
New York, NY 10021
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Dan Ciuriak (Contact Author)

Ciuriak Consulting Inc. ( email )

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Canada

Centre for International Governance Innovation (CIGI) ( email )

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C.D. Howe Institute ( email )

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Asia Pacific Foundation of Canada ( email )

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BKP Development Research & Consulting GmbH ( email )

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Germany

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