TAIPEI, April 8 (Reuters) – China and Taiwan aim to sign a landmark free trade-style deal by June to stimulate $109 billion in annual trade between the once bitter political rivals by slashing tariffs in hundreds of sectors.

The economic cooperation framework agreement (ECFA) would give a boost to Taiwan’s markets, while China sees it as part of a long-term charm offensive toward self-ruled Taiwan leading eventually to political unification.

But opposition in Taiwan ahead of tense year-end local elections, a possible challenge in the island’s parliament and the agreement’s innate complexity could stall the signing or reduce the number of deliverables that both sides hope to see.

Here are some questions and answers on what happens from June:

WILL THE TRADE AGREEMENT ACTUALLY BE PUT INTO MOTION?

Negotiators appear all but certain to sign the ECFA at formal talks in China before the end of June, but the so far blank document may cover less than a normal trade pact because of the relatively short negotiation time frame for such a complex deal.

Taiwan officials want the pact signed early to avoid getting it tangled up in Nov. 27 local elections, and letting voters see benefits from it before then.

“There’s so much political pressure to get something done,” said Joseph Lau, an economist with Credit Suisse in Hong Kong. “It could be a showpiece document. You’d still need to see more follow-up agreements.”

The island’s divided parliament could stall ratification of the ECFA [ID:nTOE60E05X] by requesting changes, however, while a referendum pledged by the island’s opposition leaders would kill it if most voters cast dissenting ballots.

WHAT DOES IT MEAN POLITICALLY IF THE DEAL IS ON OR OFF?

Taiwan’s China-friendly president Ma Ying-jeou, deal in hand, would face pressure to prove that Communist China’s enormous economy can help the democratic, export-reliant island without risks to business or the political system.

Obvious impacts from the deal such as a stock market rally or new jobs would help Ma’s ruling Nationalist Party win the local election, seen as a bellwether for the 2012 presidential race.

A loss of business in Taiwan following the ECFA could hurt the ruling party, giving ground to the anti-China opposition that is also keen to point out any link between the deal and Taiwan’s political relations with China.

Failure to sign the ECFA by June would make Ma’s policies look ineffective, costing him more popularity points at home. It would not sour overall improved China-Taiwan relations, which were strained for six decades following the Chinese civil war.

HOW LIKELY IS IT THAT CHEAP CHINESE GOODS WOULD FLOOD TAIWAN? Taiwan will face an onslaught of cheap merchandise such as textiles and low-cost appliances produced in bulk by much larger China unless it moves first to limit the inflow.

Island officials could stop a flood, which is the stated fear of island opposition leaders, by imposing quality controls and keeping tariffs high for sectors most likely to be hit.

The ECFA may also cover too little to lead to a palpable flood of Chinese merchandise. The deal covers only the first wave of sectors slated for tariff reductions, leaving most for new talks in the months or years ahead, Taiwan officials say.

WHAT DELIVERABLES WILL TAIWAN SEE BEFORE YEAR-END ELECTIONS?

Taiwan’s stock index is expected to firm on sentiment after the ECFA is signed and sustain gains if Taiwan companies make money on the back of the deal’s provisions. The ECFA is tipped to favour high-tech, petrochemicals, auto parts and financial services sectors.

Lower tariffs could free up money for Taiwanese companies to add workers, easing persistently high unemployment. Cheaper goods from China, even if they out-compete local sellers, would also mean welcome savings for Taiwanese consumers.

Early deliverables would also improve China’s image in Taiwan, a step toward the political tie-up that China hopes to see years down the road.

WILL CHINA LET TAIWAN SIGN TRADE PACTS WITH OTHER COUNTRIES?

China, keen to claim credit for helping Taiwan economically, may agree privately to let the island pursue free trade agreements with major world economies such as the United States and the Association of Southeast Asian Nations.

China, which seeks to limit Taiwan’s international profile, had asked other nations to avoid FTAs with Taiwan at the risk of jeopardising their own ties with the massive Chinese market.

Taiwan has already started discussing FTAs with Japan, Singapore and the United States on the assumption that China will consent after signing the ECFA [ID:nTOE62P03Y].

(For a related factbox, click [ID:nTOE63003J]) (Editing by Chris Lewis and Sugita Katyal)