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Taiwan, China To Restart Trade Talks

by Mary Swire, Tax-News.com, Hong Kong

07 August 2014


Taiwan and China have agreed to proceed with talks on further goods tariff reductions within their economic cooperation framework agreement (ECFA), despite the long-running dispute over the cross-strait agreement for trade in services that was signed in June last year.

The ECFA went into effect at the beginning of 2011, and implemented a three-year program of import duty reductions up to January 1, 2013, reducing the tariffs on all of its listed items to zero. In total, the tariff cuts involved a total of 539 items exported from Taiwan to China, while 267 Chinese products imported into Taiwan were also included in the agreement.

Over the intervening period, it has always been indicated there would be follow-up negotiations in order to expand and deepen all aspects of the ECFA, to add further import tariff reductions over more goods, so as to counteract the increased trade competition being seen in the region.

In particular, Taiwan is concerned that better tariffs will be included in an eventual free trade agreement (FTA) between China and South Korea, one of Taiwan's main competitors, that could be signed before the end of 2014, with a resultant reduction in Taiwanese exports.

As a consequence, following the latest bi-annual meeting of the Cross-strait Economic Cooperation Committee on August 5 in Beijing, Taiwan's Vice Economics Minister Cho Shih-chao announced that it had been agreed to speed up the ECFA negotiations on further tariff reductions. Taiwan and China are to hold the first round of talks before the end of this month.

It has been decided by both sides that the talks should proceed despite the present stand-off over the services treaty, the protest over which was only halted following an agreement to cease debate on it until legislation was passed that would require greater parliamentary oversight over cross-strait pacts.

An upgraded ECFA is intended as the basis for Taiwan's regional economic integration efforts – an agenda to be achieved through an increased number of trade agreements, culminating in bids for accession to the proposed United States-led Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership being negotiated between the Association of Southeast Asian Nations and its current FTA partners.

TAGS: tax | free trade agreement (FTA) | law | tariffs | trade treaty | China | Taiwan | agreements | legislation | import duty | trade | services

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