Cross-Straits trade pact signed

09:13, June 30, 2010      

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The Chinese mainland and Taiwan signed a landmark trade pact Tuesday in the southwestern municipality of Chongqing to slash tariffs on hundreds of categories of goods traded across the Straits.

The Economic Cooperation Framework Agreement (ECFA), deemed as a milestone in relations, is to formally take effect once both sides "complete due procedures" in follow-up talks.

A total of 539 Taiwanese products from 10 industries, including agricultural products, auto parts and machinery, representing 16.1 percent of the is-land's total exports to the mainland, will receive preferential tariffs or zero tariffs within the next two years, according to ECFA.

The package will also allow Taiwan businesses to access 11 service sectors on the mainland, including banking, accounting, insurance and hospitals.

Meanwhile, 267 Chinese mainland products, representing 10.5 percent of the mainland's export value to Taiwan, will receive the same treatment in Taiwan.

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

"The ECFA is a vitamin, not a panacea to cure all ills," Taiwan leader Ma Ying-jeou was quoted by the Taiwan News as saying at the meeting of a business association in Taipei Tuesday.

The signing of the treaty "shows that peace and prosperity between the two sides are not like roses in the sky. We are able to touch them with our hands," Ma said.

Ma said earlier on Monday that 23,000 small and medium-sized businesses in Taiwan would be the key beneficiaries of the agreement. He added that the pact would create 260,000 jobs on the island and boost GDP growth by up to 1.7 percent, AFP reported.

Taiwan appeared to be divided over the effect of the ECFA, amid concerns of being marginalized as result of an FTA accord between the mainland and the Association of Southeast Asian Nations (ASEAN).

The Democratic Progressive Party in Taiwan also insisted that the agreement would lead to Taiwan's dependence on the mainland and reduce Taiwan's political options.
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