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MOEA downplays rumors of CEPA offer from China

The Ministry of Economic Affairs said yesterday that Taiwan and China should conduct trade negotiations under the WTO framework, instead of through a Closer Economic Partnership Arrangement (CEPA) established under the "one China" system.

Fielding lawmakers' questions during a meeting of the Economics Committee yesterday, Vice Minister of Economic Affairs Shih Yen-hsiang (施顏祥) said that the government's trade policy is to support Taiwanese businesspeople in diversifying their interests around the globe.

Regarding the feasibility of inking a CEPA pact with China, Shih said that the ministry hasn't made any assessments on the matter and therefore couldn't offer any comment.

Shih's remarks came after a Chinese-language newspaper on Thursday reported that China may offer Taiwan the same special CEPA trade status as Hong Kong during Chinese Nationalist Party (KMT) Chairman Lien Chan's (連戰) visit in Beijing.

The newspaper didn't say where it had obtained the information.

China signed a CEPA with Hong Kong in June 2003, and with Macau in September 2003.

The special trade pact allows more than 100 categories of products to be shipped into China duty-free from the two territories, while enabling Hong Kong's and Macau's 17 service industries, including banking services, to independently open businesses in China.

The pact took effective on Jan.1 last year.

To enter the Chinese market under the terms of the CEPA, Taiwan's Fubon Financial Holding Co (富邦金控) took over Hong Kong's International Bank of Asia (港基銀行) in February last year.

But an official at the ministry's Bureau of Foreign Trade criticized a potential offer of a CEPA from China as a part of a "united-front gimmick."

"The CEPA proposal is a political trick that aims to degrade Taiwan," said Wang Cheng-fu (王振福), a division head at the ministry's Board of Foreign Trade.

"We should ink such free trade pacts under WTO regulations," Wang said.

According to the bureau's data, the CEPA pact did not bring significant benefits to Hong Kong's and Macau's economies last year.

Hong Kong exported HK$38.3 billion (US$4.9 billion) worth of goods to China last year, but the portion of goods falling under CEPA's tax-break list were only 0.3 percent of the total and valued at HK$1.15 billion, the bureau said, citing statistics from the Hong Kong government.
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