What Is the ECFA?

The Economic Cooperation Framework Agreement (ECFA) will cut tariffs on more than 800 categories of products and open up service sectors, giving a major boost to two-way trade across the Taiwan Straits. The tariff cuts will cover about 16 percent of Taiwan's exports to the mainland and 10.5 percent of mainland exports to Taiwan.

Under the 16-article agreement, the Chinese mainland and Taiwan agree to "gradually reduce and remove trade and investment barriers and create a fair environment" in the two areas.

A list of goods and services to benefit from the trade pact, dubbed the "early harvest program," was agreed on by both sides. The "early harvest program" will be launched within six months of the ECFA taking effect, the agreement said. The two sides will reach their zero-tariff goal on goods as outlined in the program within two years after its implementation.

Under the agreement, the two sides will continue discussing agreements for trade in goods and services and investment for six months after the ECFA takes effect.

Further discussions on the trade-in-goods agreement will include: tariff reduction and removal, rules of origin, customs procedures and trade remedies.

Discussions on the trade-in-services agreement will focus on gradually cutting and removing restrictive measures, enlarging the service sectors covered and enhancing cross-Straits cooperation.

Meanwhile, discussions concerning cross-Straits investment aim to establish an investment protection mechanism, enhance transparency of relevant regulations, reduce restrictions on investment and facilitate unhindered investment.

In order to further increase the benefits of the ECFA, the two sides also agreed to enhance cooperation in intellectual property protection, finance, trade facilitation, customs and e-business.

They will also help promote cooperation between small and medium-sized enterprises across the Taiwan Straits, and help economic and trade organizations set up offices on each other's side of the Straits.

In addition, the two sides will jointly set up a committee for cross-Straits economic cooperation to ensure ECFA agreements can be reached and to supervise the implementation of the ECFA. The committee will also interpret the terms of the ECFA and publicize major information concerning cross-Straits economic and trade activities. The committee will hold routine meetings every six months and may have interim meetings upon agreement by the two sides. It will also serve as the authority to deal with ECFA-related disputes until the two sides reach a separate agreement on dispute settlement.

Negotiations for the dispute settlement agreement will start within six months of the ECFA taking effect.

(Source: Xinhua News Agency)