On June 30, Taiwan signed a milestone economic agreement with China. In more than sixty years there has not been such an important a meeting of the minds between the two sides.

Known as the Economic Cooperation Framework Agreement (ECFA), ECFA will afford Taiwan reduced tariffs on 579 products it exports to China, saving Taiwan’s business community nearly US$ one billion annually. China will benefit from Taiwan cutting tariffs on 267 items.

Part of the negotiations also concerned intellectual property rights; Taiwan receives benefits in this area as well. This is important to Taiwan.

The agreements will help Taiwan considerably at a time when it is recovering from a recession. That is not all: the benefits will extend into the future indefinitely.

The reality is Taiwan is export-dependent. China is Taiwan’s biggest export market; more than one-fourth of Taiwan’s foreign sales are to China. And trade has been increasing to the tune of 30 percent or so a year. This must continue.

China’s economic growth this year is projected to be around 11 percent. America, the European Union and Japan are all going to be a third of this or less. The EU may grow at just one-tenth the rate of China. So Taiwan’s economic future is clearly with China.

Taiwan benefits from its commerce with China more than these data suggest. It has a sizeable favorable balance of trade with China. It is reported Taiwan has invested US$150 billion (probably a low estimate, by two or three fold) in China—half of Taiwan’s total foreign investment. This investment is profitable, and enhances Taiwan’s exports.

ECFA has been applauded by the United States, the European Union, and other countries in Asia as good for free trade and for peace in the region. Opinion polls in Taiwan indicate Taiwan’s populace like the deal by a significant margin.

Why then is ECFA being challenged? Taiwan’s opposition contends it will undermine Taiwan’s democracy, has done nothing to resolve the threat of a thousand-plus Chinese missiles aimed at Taiwan, and may endanger Taiwan’s sovereignty.

President Ma has replied to the first charge saying that Taiwan’s democracy is well established and can survive challenges, if this indeed constitutes one. Clearly most observers do not feel Taiwan’s democracy is fragile.

Regarding the second complaint, both sides negotiated the agreement as an economic one and kept political and security issues out of it, so it would be unencumbered and easier to conclude. Most commercial agreements are done this way.

Finally, the fear that Taiwan’s sovereignty is put in peril must be seen in context. In January, the China-ASEAN Free Trade agreement, which created the beginnings of a huge Asian common market, went into force; it was a boon to all of the nations of Southeast Asia but made them more dependent on China. Making such a pact, joining any international organization, or even abiding by international law means some sacrifice of sovereignty.

Anyway, whether Taiwan maintains its sovereignty is not something Taiwan’s citizens can decide. The U.S. is Taiwan’s protector; without a U.S. commitment Taiwan will not keep its sovereignty.

ECFA’s advantages certainly outweigh its disadvantage or its perceived disadvantages.