Taiwan

Mainland, Taiwan sign landmark economic pact

(Xinhua)
Updated: 2010-06-29 14:43

Chen Yunlin (R), chairman of the mainland's Association for Relations Across the Taiwan Straits (ARATS), shakes hands with Taiwan's Straits Exchange Foundation (SEF) Chairman P.K. Chiang during a cross-Straits meeting for the economic cooperation framework agreement (ECFA), in Chongqing June 29, 2010.[Xinhua]

CHONGQING - Chinese mainland and Taiwan negotiators signed the long-awaited Economic Cooperation Framework Agreement (ECFA) in Chongqing Tuesday afternoon, a move hailed by many as a milestone in cross-Strait relations.

Aiming to establish a systematic mechanism for enhancing cross-Strait economic cooperation, the ECFA was agreed upon by the mainland's Association for Relations Across the Taiwan Straits (ARATS) and Taiwan's Straits Exchange Foundation (SEF).

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The ARATS and SEF handle cross-Strait issues on behalf of their respective authorities.

The ECFA will formally take effect one day after both sides "complete due procedures and notify each other," the agreement said.

Under the 16-article agreement, the two sides agreed to "gradually reduce and remove trade and investment barriers and create a fair environment" in the two areas.

ARATS President Chen Yunlin said in an interview with Xinhua that the agreement would help the mainland and Taiwan jointly deal with increasingly difficult competition in the world economy and see mutual benefits as the economic advantages complement each other.

Chiang Pin-Kung, chairman of the SEF, said that the ECFA would not only be a milestone in the development of cross-Strait economic relations, but also a giant leap for both sides toward economic integration and globalization.

Chinese mainland, the world's third largest economy, has been Taiwan's largest trading partner and export market since 2007, according to statistics released by both sides.

Taiwan has been the sixth largest trading partner of the mainland, with an accumulated cross-Strait trading volume reaching $960 billion by the end of 2009.

The ECFA provides protection for cross-Strait investments to boost two-way capital flows.

A list of items and services to benefit from the pact first with preferential duty cuts and treatment, dubbed the "early harvest program," was agreed on by both sides.

The "early harvest program" will launch within six months of the ECFA taking effect, the agreement said.

The two sides will reach their zero-tariff goal on commodities as outlined in the "early harvest program" within two years after implementation of the program.

Under the agreement, the two sides will continue discussing agreements for commodity trade, service trade and investment for six months after the ECFA takes effect.

Further discussions on commodity trade agreement will include: tariff reduction and removal; rules of origin; customs procedures; and trade remedies.