The Straits Exchange Foundation and the Association for Relations Across the Taiwan Straits (ARATS) yesterday signed a cross-strait service trade agreement in Shanghai during the ninth round of cross-strait talks, opening the service sectors on both sides to further cross-strait exchanges.
Under the pact, which includes four chapters and 24 articles, 64 Taiwanese industries will be opened to Chinese investment, while China will open up 80 industries to Taiwan.
The Taiwanese industries include transportation, tourism and traditional Chinese medicine, while China will open up its finance, retail, electronics, publishing and travel sectors.
Under the agreement, Chinese investors will be allowed to open hotels in Taiwan.
Taiwan will also allow Chinese travel agencies to establish a maximum of three branches in the country and provide services to Taiwanese. However, they will not be allowed to accommodate any foreign tourists, including Chinese.
Taiwanese investors will be allowed to set up travel agencies in China, as well as open restaurants or hotels.
Chinese companies will be allowed to open beauty parlors or hair salons in Taiwan, but would only be allowed to employ Taiwanese.
While China will open its publishing industry to Taiwanese investment, Taiwan will allow Chinese companies to invest in Taiwanese businesses in the printing service industry, with a maximum of 50 percent stock ownership.
On financial services, Taiwanese companies will be allowed to invest security companies in Shanghai, in Shenzhen and Chinese-controlled Fujian Province.
In signing the pact, foundation Chairman Lin Join-sane (林中森) and ARATS Chairman Chen Deming (陳德銘) both lauded the agreement for deepening cross-strait exchanges in the service sector.
Lin said 80 percent of the deal opens the two sides’ service sectors to the same or greater degree as the Closer Economic Partnership Arrangement (CEPA) that was signed between Hong Kong and China in 2003, with 90 percent of financial services covered in the cross-strait agreement opened, just like in the CEPA.
The cross-strait service trade agreement is a major follow-up to the Economic Cooperation Framework Agreement (ECFA) and the General Agreement on Trade in Services under the WTO.
“The service trade agreement is a pact that benefits related sectors across the Taiwan Strait and promotes the interests of the public on both sides. It will result in a win-win situation for both sides,” Lin said.
After signing the pact, Taiwan and China cannot revise or cancel the agreement within the next three years.
The two sides will hold an annual meeting to review the implementation of the pact.
The agreement also includes an emergency negotiation mechanism, which gives related industries from each side the right to demand negotiations and seek solutions if the agreement negatively affects their businesses sectors.