Sat, Jul 30, 2011 - Page 11 News List

ECFA saved local firms US$53m in tariffs: BOFT

FRIENDS WITH BENEFITS?In the first half of this year, exports to China totaled US$61.56 billion; in the same period imports from China added up to US$21.93 billion

By Crystal Hsu  /  Staff Reporter

Local firms saved more than US$50 million in tariffs in the first half stemming from the Economic Cooperation Framework Agreement (ECFA) Taiwan signed with China last year, the Ministry of Economic Affairs said yesterday.

Local machinery makers benefited most from the closer trade ties, the ministry said.

For the first six months, China-bound exports totaled US$61.56 billion, rising 10.5 percent from last year, while US$10.18 billion worth of items qualified for favorable tax rates under the trade pact, saving US$53.71 million in tariffs, said Bill Cho (卓士昭), director---general of the ministry’s Bureau of Foreign Trade (BOFT).

The data were released ahead of the latest round of cross-strait trade talks to be held in China next month to discuss investment protection and other issues.

Imports from China amounted to US$21.93 billion during the January--to-June period, surging 34.2 percent from a year earlier, with tariff cuts valued at US$94.27 million, Cho said.

“The figures show the ECFA benefits Taiwan more six months after the agreement took effect,” Cho told a media briefing.

China’s tariffs are more than double the average rates imposed by Taiwan, which average about 4.5 percent, he said.

EARLY HARVEST

Under the ECFA, the two sides agreed to remove tariffs in three phases over two years on 557 items from Taiwan and 267 items from China on the so-called “early harvest” list.

Cho refused to comment on whether more items would enjoy tariff reductions because of the sensitive and delicate nature of Taiwan’s ties with China.

The first half saw exports of machinery products to China jump 61.9 percent to US$360 million, higher than the gain of 42.6 percent China imported worldwide during the same period, BOFT data indicated.

Exports of agricultural products to China expanded 3.45 times to US$59.97 million in the first six months, the BOFT said.

Favorable terms under the ECFA helped lure foreign investment as 27 multinational corporations from the US, Japan and Europe had signed letters of intent to invest up to NT$108.25 billion (US$3.76 billion) in Taiwan, Cho said.

Optical product manufacturers displayed the most activism, making up 80 percent of the planned investment.

INVESTMENT

The trade agreement also facilitated the return of Taiwanese capital from abroad as the economic ministry processed over 40 investment plans totaling NT$28.3 billion that aim to take advantage of warming cross-strait trade ties, Cho said.

“The investment plans will translate into more job opportunities, which is positive for the overall economy,” Cho said.

The early harvest list’s utilization ratio rose to 23.41 percent in the second quarter, from 13.88 percent three months earlier, according to BOFT data.

The figures suggested some companies need greater incentives to make a move, Cho said.

Items with tariffs of 5 percent to 10 percent will be axed by the end of next year, he said.

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