TAIPEI, Aug 17 (Reuters) - Taiwan's parliament passed a
trade deal with Beijing on Tuesday, the most significant
agreement between the political foes of 60 years and one that
binds Taiwan's economy to China while opening doors to other
countries.

Legislators approved all but one sure-to-pass piece of the
economic cooperation framework agreement (ECFA) after a marathon
day of debate and colourful protests, meaning the deal becomes
law on Jan. 1. Negotiators initially signed the pact in June.

Thee deal, which slashes tariffs on some 800 products, is
considered a catalyst for similar pacts with other countries
that could ease Taiwan's diplomatic isolation imposed by China
and raise its competitiveness as an export-dependent economy.

The government has said the deal would create some 260,000
jobs, while one private forecast has put the net effect of ECFA
for Taiwan at a 5.3 percent improvement in GDP by 2020.

China sees the deal as a step in its long-held plan to draw
Taiwan under its rule, charming the island with economic
sweeteners even as it continues a military build up against a
territory it has regarded as its own since the end of the
Chinese civil war in 1949.

As part of that charm offensive, Beijing is unlikely to stop
Taiwan from seeking deals with other trade partners to help its
economy. China's apparent blessing for a future pact with
Singapore, Taiwan's sixth largest trading partner, is a strong
first sign of agreements to come.

Approval of the trade pact following a brawl last month in
the divided legislature also gives Taiwan negotiators a stronger
mandate to go back to the table with China for talks on further
tariff cuts and other economic cooperation deals.

Opponents in Taiwan had feared that China wanted ECFA to
assert its claim of sovereignty over the self-ruled, democratic
island by making the economies more interdependent.

Dozens of those opponents protested outside parliament on
Tuesday, with local television showing some in their underwear,
while opposition legislators yelled and displayed giant placards
during the debate.

"People are clear this isn't going to be good for Taiwan,"
lawmaker Chen Ming-wen told parliament. "It's going to steer our
economy closer to China."