The inking of an agreement between Japan and Taiwan on 10 April 2013 could only have come as a shock to the People’s Republic of China. The agreement allows for Taiwanese vessels to fish within twelve miles from the disputed Diaoyu Islands – which have been at the centre of a vicious diplomatic conflict between Japan and China for the past few months, and which lie in Japanese waters. What has Taiwan’s stance on the issue of territorial disputes, vis-à-vis China, been? How does this sudden development impact the dynamics of the East China Sea dispute?

The Island Dispute: Taiwan’s Stance vis-à-vis China
Without doubt, the pace of normalization in the relations between the mainland and Taipei, especially at the economic level, has accelerated dramatically since Ma Ying-jeou of the Chinese Nationalist Party (KMT) was elected in 2008 – a process that is expected to continue with Ma securing a second four year term in January 2012.  Trade, economic cooperation, tourism and educational and cultural exchanges dominated the bilateral agenda last year, but Taiwan has always been aware that, economic liberalisation aside, Beijing has always remained committed to the idea of unification. This awareness alone accounts for the ever-present trust deficit between Taipei and Beijing. The East China Sea dispute, which flared up last year, has brought this deficit to the surface. China is showing no signs of abandoning the military option, and continuing to press for widening the balance of power in its favour.

The American ‘pivot’ to Asia under the Obama administration, coupled with the rising tensions in the East China Sea, adds to the atmosphere of uncertainty in which Taipei is currently functioning. When Taiwanese activists were arrested off the controversial coasts in question earlier this year, Beijing tried to give the impression that Taipei was cooperating in the mainland’s territorial claims to the Senkakus. Yet Taiwan has been remarkably clear on the fact that it will not cooperate with China in the dispute in the East China Sea.

The reasons are, of course, historical. Since 1971, when the Chinese seat at the United Nations held by Taiwan was taken over by the People’s Republic of China, Taiwan has faced increasing international isolation. Beijing has long considered Taiwan to be a renegade province of China. Under such circumstances, Taipei has ruled out the question of collaborating with China on territorial disputes.

East China Sea Dispute: Changing Dynamics?
The deal between Japan and Taiwan has been framed as an interim agreement, and this fact alone promises to change the dynamics of what is already a fluid situation in the East China Sea. For one, a deal such as this delays any resolution of claims of ownership. It also removes the main source of friction between Taiwan and Japan. The deal significantly expands the reach of Taiwan’s fishermen, which is a boon for the island’s economy. It is also in line with Taiwan President Ma Ying-jeou’s peace initiative proposal, which calls for putting aside issues of territorial sovereignty and sharing the area’s natural resources.

Meanwhile, the signing of the deal creates a number of diplomatic problems for the Chinese government, which fears both diplomatic isolation on issues of territorial sovereignty as well as a possible revival of Taiwan’s diplomatic status. The immediate reaction from Beijing, therefore, focused directly on the issue of Taiwan’s status vis-à-vis the mainland. The Communist Party-run Global Times criticized Taiwan for what it called ‘neglect’ of the mainland’s ‘feelings’. For Beijing, the signing of this deal is the second time in as many months that Japan has acted to undermine the mainland’s policy regarding Taiwan – the first time being a commemoration of the second anniversary of the Fukushima disaster during which Taiwan’s representative was treated as an ambassador. The agreement also will deprive Beijing of a rare issue on which it can publicly position itself as a defender of Taiwan’s rights. For example, until now, the People’s Liberation Army’s (PLA) navy had stressed its willingness to protect Taiwanese fishermen from the Japanese Coast Guard. But the signing of this deal has put the islands back in the spotlight as bones of contention, with the Taiwanese Coast Guard stating that Taiwanese ships will now help Japan to keep mainland trawlers out of the disputed area.

A Signed Deal: Pragmatic Path to Peace?
Tokyo and Taipei’s deal may raise the prospect of a globally embarrassing China-Taiwan standoff, but may also side-line the mainland in the event of a prospective reasonable solution to the island dispute. In line with President Ma and former Vice President Annette Lu Hsiu-lien’s proposals for peace initiatives based on joint use of natural resources, the deal brokered between Japan and Taiwan sidesteps sensitive claims based on territorial sovereignty. This is a pragmatic way to avoid the kind of turbulence that has been roiling the region for the past few months. There is no shortage of examples of the use of mutual investment as a tool to pacify conflict hotspots across the globe. In 2010, Russia and Norway agreed to jointly drill for oil in a disputed area of the Barents Sea, and in 2013, Mexico and the US agreed to do the same along a common maritime boundary. The bottom line here is that the pact between Japan and Taiwan does, indeed, set a precedent for China to follow, in allowing nationalist passions to cool and letting a common thrust towards development and cooperation between countries grow.