Talks on ECFA submission ongoing: MOEA

‘BEST TIMING’::The ECFA took effect on Sept. 12 last year, yet the government said it was still consulting Beijing on when to submit the trade document to the WTO

By Ko Shu-ling and J. Michael Cole  /  Staff Reporters

Mon, Jan 31, 2011 - Page 1

Taipei and Beijing are still negotiating the “best timing” to submit the Economic Cooperation Framework Agreement (ECFA) document to the WTO, government officials said.

Chang Chun-fu (張俊福), deputy director of the Ministry of Economic Affairs’ (MOEA) Bureau of Foreign Trade, said both sides had translated the document into English, but had yet to decide when to notify the global trade body on the content of the pact.

“We are taking all things into consideration, but there is no time limit,” he said, adding that some countries took years to complete the process.

Earlier last week, the bureau’s ECFA Task Force told the Taipei Times it “would notify the ECFA to the WTO pursuant to the WTO’s rules and procedures,” adding that “as a usual practice, we will consult the other signatory before making any RTA [regional trade agreement] notifications.”

“Therefore, regarding the ECFA notification, we will discuss it with China and notify the WTO in due course,” it said.

Chang said that while the WTO does not set a time limit for the submission, it was understood that two to three years was not acceptable.

As the two sides have only completed negotiations on the “early harvest” program, more agreements needed to be negotiated after the ECFA was signed, Chang said.

However, he denied that the two sides would wait until a subsequent agreement under the ECFA framework was completed before sending a notification to the WTO.

Bureau of Foreign Trade chief secretary Chiang Wen-juo (江文若) said this approach was a “higher-level” decision and that she was in no position to offer any comment.

On Dec. 14, 2006, the General Council of the WTO established, on a provisional basis, a transparency mechanism for all RTAs that provides for the early announcement of any RTA — such as the ECFA — and notification to the WTO. Member economies are to consider the notified RTAs on the basis of a factual presentation by the WTO Secretariat.

The Committee on Regional Trade Agreements considers RTAs falling under Article XXIV of the General Agreement on Tariffs and Trade (GATT) and, if applicable, Article V of the General Agreement on Trade in Services.

The US government has expressed concerns over the fact that the ECFA documents signed by Taiwan and China in June last year have yet to be submitted to the WTO as promised, especially after the ECFA came into force on Sept. 12 and its early harvest list on Jan. 1.

Asked to comment on whether it was unusual for an RTA to come into force prior to notification to the WTO, Razeen Sally, co-director of the Brussels-based European Centre for International Political Economy and an expert on the WTO and preferential trade agreements, said WTO rules on the matter were not strictly regulated.

“Relevant WTO rules [in GATT Article XXIV] are not that strong, but, more to the point, are weakly policed and often honored in the breach,” Sally said by e-mail. “So if what you say is the case [failure to notify of an RTA prior to its entry into force], it is not that unusual.”

Furthermore, Sally said that in its current form, the ECFA covered less than ordinary RTAs.

“As it stands, [the ECFA] probably does not pass muster with Article XXIV, as it is a very partial agreement, eliminating tariffs on much, much less than the 90 percent of goods trade that is the WTO standard,” he said.

The 539 categories of traded goods included in the early harvest list account for about 16 percent of China-bound exports.

“[The] ECFA might eventually meet this standard, but that is to be decided, since it is a work in progress,” Sally said.

Minister of Economic Affairs Shih Yen-shiang (施顏祥) has said the English version would be sent to the WTO after the “supporting measures” of the Cross-Strait Economic Cooperation Committee (CSECC) were completed.

While the notification process usually takes more than a year, Shih said he hoped this could be accomplished as soon as possible.

The ECFA stipulates that once the trade pact takes effect, the two sides are to set up a cross-strait economic cooperation committee, and within six months initiate discussions on agreements on investment protection, commodity and service trades, as well as a dispute--resolution mechanism.

Taipei and Beijing formed the ad hoc CSECC earlier this month. Aside from negotiations, the purpose of the committee is to handle implementation, application and interpretation of the agreement or disputes resulting from it.

Under early harvest provisions, China has agreed to gradually lower tariffs on 539 categories of imports, with an estimated value of US$13.8 billion a year. Beijing also agreed to open 11 service categories and 18 farming and fishery categories to tariff reductions.

For their part, Chinese exporters will get a reciprocal deal on 267 items, with an estimated value of US$2.9 billion annually.

The administration has said the ECFA would help create 260,000 jobs and boost economic growth by as much as 1.7 percent, adding that the ECFA was crucial to ensure Taiwan was not marginalized following the entry into force of the ASEAN Plus Three (ASEAN plus China, Japan and South Korea).