chapter  1
On spillover effect of the Economic Cooperation Framework Agreement: perspectives from the European model of functional integration
Pages 18

Since May 20, 2008, as many as 16 agreements and three memorandums have

been signed between China and Taiwan. Most of them aim at normalizing eco-

nomic and trade relations across the Taiwan Strait. The trend of cross-Strait

rappro chement continued until June 29, 2010, when the Economic Cooperation

Framework Agreement (ECFA) was signed by the Straits Exchange Foundation

(SEF ) of Taiwan and the Association for Relations across the Taiwan Strait

(ARATS) of China. The ECFA was widely hailed as a landmark achievement

for both Beijing and Taipei, because it signaled to the world that both sides were

ready to bury the hatchet and seek peaceful resolutions for their political dis-

putes (BBC News, 2010). Moreover, since the nature of the ECFA is similar to

that of a free trade agreement, the signing of the ECFA has generated various

speculations that Taiwan and China would engage in serious economic integra-

tion, which may initially include Taiwan in the one-China market and eventually

lead to a political union (or unification) between China and Taiwan. Paradoxi-

cally, the above view is held by strategic planners of the Chinese Communist

Party (CCP) and by independence-aspired politicians of the Democratic Progres-

sive Party (DPP) in Taiwan (The Economist, 2010). While not disputing the possibility that the ECFA may facilitate further cross-

Strait economic integration, others contend that the signing of the ECFA is

driven by economic globalization, which compels economies with complemen-

tary factors to cooperate in order to gain competitive edges in the global market.

From this perspective, cross-Strait economic integration, like it or not, is an