Taiwan-China eye deal to cut tariffs on Taiwanese products

14 June 2010 03:41  [Source: ICIS news]

SINGAPORE (ICIS news)--Officials from China and Taiwan have agreed over the content and structure of a trade deal that would lower the tariffs for Taiwanese products including petrochemicals, Taipei's semi-official Straits Exchange Foundation (SEF) said late on Sunday.

The agreement would also cover trade, investment, services and the “early-harvest list” of industrial items that would first benefit from reduced tariffs after Taiwan signs the trade pact with the Chinese government, the foundation said in the statement.

"Signing ECFA [Economic Cooperation Framework Agreement] will strengthen the trade and investment relations between the two sides," SEF said adding that the cooperation would benefit the "economies on both sides of the strait".

"The two sides agreed to adopt an even more open policy on certain services," the SEF said, without elaborating.

SEF is an organization set up by the Taiwanese government to handle business matters with China.

The trade pact is part of the ECFA between Taiwan and China, to enhance Taiwan’s exports in the face of competition from the country’s rivals in Southeast Asia, according to media reports.

In January, China’s free trade agreement (FTA) with the 10-member Association of South East Asian Nations (ASEAN) came into force, allowing for zero tariffs on a large number of products including petrochemicals in China-ASEAN trade.

The China-ASEAN FTA could reduce Taiwan’s petrochemical exports to the mainland unless it inks a similar deal with China, industry sources said.

Tariff reductions for petrochemical products could be about 60% and those for textiles 80%, media reports said.

Some 500 Taiwanese petrochemical, machinery, auto parts and textile products will be among the first to benefit from the tariff cuts under the deal, they added.

The reports also cited China's Taiwan affairs head Wang Yi as telling Taiwanese delegates to the third round of ECFA talks on Sunday that the deal was certain to be signed by the end of June.

Together all the items on the initial list for reductions, dubbed the "early harvest list", account for some 15% of Taiwan's exports to China, they said.

China’s official Xinhua news agency said on Sunday that ECFA negotiators would settle on a list of goods and services to benefit from the “early harvest” plan in subsequent discussions.

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By: Nurluqman Suratman



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