Economy

Date set for historic deal with Taiwan

(China Daily)
Updated: 2010-06-25 10:04

Taipei - The Chinese mainland and Taiwan will sign a landmark trade deal next Tuesday, cutting import tariffs on hundreds of items and providing a major boost of about $100 billion annually in two-way trade, negotiators said on Thursday.

The deal, which is considered the most significant between the two sides in 60 years, will be signed on June 29 in the southwestern municipality of Chongqing when negotiators from both sides meet for their fifth round of talks.

The free-trade deal, or the Economic Cooperation Framework Agreement (ECFA), will cut tariffs on more than 800 products and open up service industries.

The deal provides Taiwan companies tariff advantages on some 530 categories of goods for mainland export, and mainland companies will receive advantages on some 260 categories in the Taiwan market.

It also protects intellectual property rights for both sides - an important gain for Taiwan's entertainment sector - and regulates cross-Straits banking.

The mainland's Association for Relations Across the Taiwan Straits (ARATS) and Taiwan's Straits Exchange Foundation (SEF) will sign the ECFA and an agreement on intellectual property protection, Xinhua News Agency reported on Thursday.

SEF Vice-Chairman Kao Koong-lian said that negotiators reached the consensus at a preparatory consultation held in Taipei between the ARATS and SEF on Thursday morning to fix the details for the coming talks.

ARATS Executive Vice-President Zheng Lizhong said the ECFA will be a landmark in cross-Straits relations, signaling a new stage in the ARATS-SEF talks.

The ARATS and SEF have held three rounds of expert-level talks on the ECFA since January.

The mainland has not pressured Taiwan to lift trade barriers against imports of its farm produce nor required the island to open its labor market.

The mainland agreed to allow the import of more duty-free farm produce from Taiwan and include preferential treatment for the island's small businesses to enter the mainland market, Zheng said.

The mainland has agreed to open its market for some industries in Taiwan in commodity trade and open some of its service sectors, he said.

The two sides have agreed to reduce the trade and investment barriers under the WTO rules, based on each other's economic conditions, he said.

They also agreed to reduce the duties on some commodities, he said.

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However, Zheng added: "The ECFA is only the first step for economic cooperation and will not settle all the problems the mainland and Taiwan businesses face. More work still needs to be done after the agreement is signed."

Kao Koong-lian, who was heading the Taiwan delegation, said the ECFA and intellectual property protection agreement will be the most important pacts for cross-Straits economic cooperation in the future.

"The ECFA is a comprehensive and complicated pact. That's why it has taken such a long time to discuss. Now the two sides have made concrete progress," Kao said.

The ECFA is of great significance to Taiwan, as it will help sharpen the competitive edge of Taiwan companies, boost exports, attract more investment and promote employment, he said.

It will also set up a systematic mechanism for cross-Straits economic cooperation, he added.

China Daily - Xinhua