The Economic Cooperation Framework Agreement (ECFA) has brought significant benefits to Taiwan region's economy since its implementation, now it has been challenged due to Taiwan authority's violation on trade rules.
Signed in June 2010, the ECFA, based on the 1992 Consensus, promotes normal economic relations between the Chinese mainland and Taiwan. The mainland has cut $6.15 billion in tariffs on Taiwan trade as of the end of 2019, and a lot of financial and non-financial companies have utilized preferential policies to provide services in the mainland, according to data from China's Ministry of Commerce.
The ECFA has brought tangible benefits to both sides. The framework covers a broad range of areas, including trade in goods and services, as well as investments. The agreed-upon tax rates are still being implemented, even after its expiration in 2020.
While achieving zero tariffs for all products in trade will take time, an "early harvest program" was established back in 2010 to provide preferential duty cuts and treatment for select items and services, reducing tariffs to zero much faster than going through normal procedures.
However, Taiwan's restrictions on mainland products are suspected of violating the ECFA's provisions on gradually reducing or eliminating tariffs and non-tariff barriers, said Zhu Fenglian, spokesperson for the State Council Taiwan Affairs Office on Friday.
The unilateral restrictions by Taiwan's Democratic Progressive Party (DPP) authority may also violate World Trade Organization (WTO) principles, such as non-discrimination and eliminating quantitative restrictions, and harm industries and companies both on the mainland and in Taiwan, Zhu added.
The ECFA has played a crucial role in promoting economic cooperation between Taiwan and Chinese mainland. Unfortunately, rather than lifting trade restrictions, the DPP authority has worsened the situation since taking office, increasing prohibited import items from the mainland, said Zhu.
The office supports appropriate measures being taken in response to these violations, she added.
(Cover via CFP)