The Legislative Yuan passed the Economic Cooperation Framework Agreement Aug. 17, paving the way for the trade pact to take effect as early as September 2010.
Officials said Taiwan and mainland China will now proceed to exchange copies of the trade agreement for confirmation, work on its English version and decide on a date for the accord to officially come into force.
“Within six months after the accord takes effect, the two sides will start negotiations on agreements on investment protection, dispute settlement as well as trade in goods and services,” they added.
A cross-strait economic cooperation committee will also be formed to facilitate implementation of the ECFA, the officials said.
According to the agreement, 539 Taiwanese export items to the mainland will enjoy tariff reductions beginning Jan. 1, 2011. Tariffs imposed on these products will be gradually reduced to zero in three stages over the following two years.
Similarly, tariffs that Taiwan imposes on 267 goods from mainland China will be reduced to zero over the next two years.
Some economists have estimated that as a result of the agreement, industries in Taiwan can expect to pay NT$29.5 billion (US$922 million) less in tariffs than before on an annual basis.
“The passage of the ECFA can be seen as a crucial step in helping Taiwan break free from its economic isolation and in preventing the island from becoming marginalized,” Lo Chih-chiang, spokesman of the Presidential Office, said after the bill was passed.
“More business and job opportunities can be expected along the way under this institutional framework,” he added.
The agreement passed its second reading in the Legislature late in the night after a lengthy and contentious debate between legislators from the ruling Kuomintang and the opposition Democratic Progressive Party.
The DPP, which is vehemently opposed to ECFA, strongly insisted that the agreement be reviewed article by article. The KMT, however, was adamant that the agreement could only be accepted or rejected in its entirety.
During the debate the DPP submitted 18 motions to review the bill separately, but each motion was overruled by the KMT, which, with 74 legislators out of a total of 112, has an absolute majority in the Legislature.
In the end, out of the 68 votes cast, every single one was in favor of ratifying ECFA. The DPP, with 33 active legislators, refused to vote either for or against ECFA. It was the party's way of protesting and registering its displeasure with the whole process. (HZW)
Write to Audrey Wang at audrey@mail.gio.gov.tw