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Business
China-Taiwan Trade Agreement Takes Effect
Sunday, September 12, 2010
Taiwan Scene
Tokyo -- Today a historic bilateral trade agreement between mainland China and Taiwan took effect. The pact is called the Economic Cooperation Framework Agreement (ECFA), and it symbolizes the pragmatic accommodation that both sides have made after six decades of political antagonism.
One of the key features of the agreement is that it will allow regular government-to-government contacts to handle pending issues, with a particular eye to removing trade and investment barriers.
Under the terms of the agreement, tariffs on selected goods will drop to 10% or lower in the first year, 5% or lower in the second year, and zero in the third year.
Taiwanese President Ma Ying-jeou and his Kuomintang Party have pursued a policy of friendship and accommodation toward Beijing, and he has promised economic prosperity through tighter links with the mainland. The effectuation of this agreement is thus a personal triumph for Taiwan's leader.
China is Taiwan's largest trading partner and its largest investment destination.
Taiwanese opposition parties, led by the Democratic Progressive Party (DPP), refused to take part in the vote on the pact due to their anti-Beijing stances.
Taiwan has seen robust economic growth rates this year, although there is also a growing gap between rich and poor.
For its part, Japan has yet to advance free trade agreements with either China or Taiwan, largely because Tokyo overprotects its agricultural sector.
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