After 17 rounds of negotiations since August 1996, the Republic of China and Japan signed the Taiwan-Japan Fisheries Agreement on April 10, 2013. The two sides reached a consensus on resource sharing without touching sovereign issues, demonstrating the R.O.C. resolute to peacefully solve the disputes. This article is composed of four parts: introduction to the background of the Fisheries Agreement and related negotiations, analysis of factors contributing to the signing of the Agreement, the strategic implication to the R.O.C., and the impact on the R.O.C. future Diaoyutai policy. The author argues that due to the lack of consensus on fishing activities within 12 nautical miles of the Diaoyutai Islands, there are still possible confrontations between the two sides. Additionally, Mainland China’s assertive actions has extended from to sea to air as demonstrated by dispatching the PLA South China Sea fleet, 8 surveillance ships and more than 40 fighter jets to the Diaoyutai area soon after the Agreement. Mainland China’s assertive actions pose tremendous challenges to the R.O.C.’s northeast air defense as well as to the Coast Guard. It is suggested that the R.O.C. government formulate a strategy responding to Mainland China’s frequent cross-border fishing activities and scenarios of Mainland China’s Coast Guard entering the agreement area.