Conclusion of ECFA with Taiwan on the Horizon
Taiwan’s Mainland Affairs Council (MAC) Chairwoman Lai Shin-yuan revealed in an interview recently that Taiwan (officially the Republic of China) anticipates signing an agreement with mainland China (officially the People’s Republic of China) which, among other factors, will slash import tariffs and permit increased market access in the banking sector. Known as the Economic Cooperation Framework Agreement (ECFA), the proposed agreement between the two countries was drawn up some time ago, but has not yet been signed, and very little detail has been made known to the public.
Although there is much controversy in Taiwan with regard to the ECFA, it is generally agreed that Taiwan’s need to remain globally competitive can be met through strengthened economic and trade ties with China. This is becoming all the more important in light of the increased bilateral Free Trade Area (FTA) between Japan, Korea and China and the ASEAN countries of Burma, Brunei, Myanmar, Indonesia, Malaysia, Laos, Philippines, Singapore, Thailand, and Vietnam. ASEAN was formed in 1967 with a view to encouraging cooperation in a wide range of sectors, including food production, industry, commerce, civil aviation, shipping, tourism and communications.
While details of the ECFA have not been revealed, it is thought to contain similar principles to the agreements signed by the People’s Republic of China with Hong Kong and with Macau, known as Closer Economic Partnership Arrangement. The objective of the agreement between Hong Kong and China includes strengthening trade and investment cooperation between the two parties, while promoting joint development. Some of the measures to be taken to reach this objective include progressively reducing or eliminating tariff barriers on the trade of goods, and the reduction or removal of discriminatory measures hindering liberalization of trade in services.
With regard to the ECFA, Taiwan’s leader Ma Ying-jeou has expressed his confidence that the agreement between the two countries would protect Taiwan’s future economic development. He further went on to assure the public that they would be informed of future developments and any industries that are likely to be negatively impacted by the agreement will be taken into account and provided for.