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Mainland, Taiwan jointly reduce import tariffs to implement landmark trade pact

Updated: 2011-01-03 10:57


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BEIJING/TAIPEI - The Chinese mainland and Taiwan Saturday moved the first step in furthering their economic ties by implementing the "early harvest program" of the Economic Cooperation Framework Agreement (ECFA).

Under the program, the Chinese mainland reduces tariffs on 539 Taiwanese goods while Taiwan drops the duties on 267 mainland goods.

Within two years, the duties on those products will be eventually reduced to zero, a move to put Taiwan in a favorable position when competing with imports from Japan or the Republic of Korea in the mainland market, experts say.

Chinese mainland customs in Xiamen City of eastern Fujian province gave the green light on Saturday to the first group of commodities imported from Taiwan under the cross-Straits tariff-reduction trade pact.

The duty of the merchandise -- 4.08 tons of Taiwan fruits worth $2,920 with a Certificate of Origin (CO) issued by commerce officials in Taiwan's Kinmen County -- was reduced from 11 or 12 percent to five percent in line with the early harvest program.

Taiwan exported to the mainland fruits worth $9.74 million in the first 11 months of 2010, a 129.5 percent increase year-on-year, according to Taiwan's trade association statistics.

Customs in Taiwan's Kaohsiung has accepted export applications to the mainland for Taiwan-raised live rockfish, which will be shipped to Fujian on Sunday.

The output of Taiwan's live rockfish made up about 58 percent of the world's total, and its exports to the mainland will enjoy 5.5-percent tax reduction in 2011 and zero tax by 2012.

Also on Saturday, the first batch of the mainland's exports to Taiwan under the trade deal -- 22.6 tons of joss sticks for Buddhist worship that are worth $17,328-- were inspected and permitted through at Xiamen Customs.

Their tariff in Taiwan was reduced from five percent to 2.5 percent, as called for in the ECFA.

To speed up the procedures, Xiamen Customs opened special ECFA counters to give priority to commodities listed in the cross-Straits trade pact.

Also, the General Administration of Customs has ordered local customs to provide ease of movement to products listed in the ECFA agreement, including agricultural and mechanical products, chemicals, electronics, auto parts, textiles, medicine and other sorts of products.

Meanwhile, the Chinese mainland allows Taiwan companies to enter 11 service sectors such as accounting, hospital, banking and securities, while Taiwan opens nine of its services sectors to mainland firms.

The ECFA, signed in June 2010 and becoming effective in September, has been hailed as a milestone for realizing the normalization, institutionalization and liberalization of cross-Straits economic relations.

"The implementation of the early harvest program is only the first step in implementing the ECFA. As negotiations continue, cross-Straits trade will increase and more people will benefit," Yang Yi, the State Council's Taiwan Affairs Office spokesman, said in Beijing Wednesday.

Professor Jang Wu-Yue, an expert of cross-Straits relations at Taiwan's Tamkang University, said he believed the implementation of the ECFA would give an impetus to service sectors on both sides, especially for Taiwan's service sectors which contribute to 70 percent of its GDP.

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"Taiwan's high-quality service industries will provide more choices for customers on the Chinese mainland," he said.

As a result of ECFA, cross-Straits investment will be broadened from the manufacturing industry to others, from low value-added industries to high value-added industries, he added.

The Chinese mainland opened five of its service sectors -- accounting, computer services, conference-providing services, research and development and its film industry -- in October 2010.

Another six mainland service sectors -- design, hospitals, maintenance of civil aviation planes, banking, securities and insurance -- were opened Saturday.

Chinese mainland and Taiwan negotiators signed the landmark ECFA in Chongqing Municipality on June 29, 2010.

It is estimated that about 260,000 new jobs will be created in the island by the ECFA's early harvest program, which will benefit about 23,000 small and medium-sized enterprises in the island.

According to statistics released by both sides, the mainland has been Taiwan's largest trading partner and export market since 2007.


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