Taiwan and China concluded the third round of negotiations on a proposed economic cooperation framework agreement (ECFA) in Beijing yesterday, but both sides were tight-lipped about when they would meet again to finalize the “early harvest” list.
The early harvest list refers to goods and services that will be subject to immediate tariff concessions or exemptions, which are expected to form the backbone of the proposed deal.
Both sides on Sunday reached a consensus on the text of the planned accord and discussed early harvest items.
Mainland Affairs Council (MAC) Deputy Minister Liu Te-shun (劉德勳) yesterday said council Minister Lai Shin-yuan (賴幸媛) was scheduled to brief Legislative Speaker Wang Jin-pyng (王金平) on the progress of Sunday’s negotiations today.
Wang has invited caucus leaders to attend today’s briefing.
The Democratic Progressive Party (DPP) caucus, which has also declined all previous invitations, said it would not attend.
It said the briefing is meaningless because officials are unwilling to tell them anything other than what they already know from media reports and because lawmakers are not able to question officials during the briefing.
DPP Chairperson Tsai Ing-wen (蔡英文) voiced reservations about China’s motives for giving Taiwan benefits on its early harvest list.
Saying the opposition party had yet to see the proposed agreement because the government has kept it under wraps, Tsai said if an ECFA was as good as the government said, “then we have to wonder why China is willing to give us so much.”
“What is the story behind [China’s willingness] to give us these benefits, what is the reason?” Tsai asked. “The government has to tell us clearly and honestly what China expects from us in return.”
Chinese Nationalist Party (KMT) Secretary-General King Pu-tsung (金溥聰) urged the public to rationally examine the trade deal, rather than engage in “emotional criticism.”
“Many people can see very clearly whether an ECFA is good for Taiwan,” he said. “Some media outlets portray it in such a bad light because they want the public to think it is a trap set by China and that the administration is sacrificing Taiwan’s interests. When Beijing says it is willing to yield benefits to Taiwan, they say Beijing has ulterior motives.”
Meanwhile, KMT Legislator Lai Shyh-bao (賴士葆), a member of the legislature’s Finance Committee, praised moves toward creating a cross-strait economic cooperation committee.
“There is a similar mechanism in the TIFA [Trade and Investment Framework Agreement] for trade officials to hold regular negotiation sessions,” Lai said.
KMT Legislator Ting Shou-chung (丁守中), a member of the Economics Committee, said both sides could review the early harvest list regularly via the committee, which would meet every six months and would be responsible for negotiating, supervising and assessing the implementation of the trade pact and settling disputes concerning the interpretation, implementation and application of the agreement.
Also yesterday, the Ministry of Economic Affairs shed some light on the items to be included on the early harvest list.
“We have reached a consensus on most items, but there are differences to be resolved on a small number of items because of different industrial policies on each sides,” Industrial Development Bureau Director-General Woody Duh (杜紫軍) told a media briefing.
Both countries have reached a consensus to include more than 500 items on Taiwan’s early harvest list — including petrochemicals, machinery, auto parts and textile industries — as well as more than 200 on China’s list.
HARVEST LIST
Other items on Taiwan’s list include plastics, agriculture, stocks and bonds, as well as traditional industries, such as underwear, socks, bags and luggage, Duh said.
Ministry sources said an agreement was reached to scrap a prevailing business model under which Taiwanese firms have to find Chinese partners to offer medical care, PC retailing services and airline cargo services in China.
NO VENTURES
The joint venture model would no longer be necessary, as Taiwanese firms would be allowed to take up a 100 percent stake in businesses across the Strait.
The combined value of Taiwan’s early harvest list would exceed US$10 billion, or more than 10 percent of the nation’s total China-bound exports of US$80 billion last year, the ministry said.
On China’s side, it would account for 6 percent, or US$2 billion, of last year’s exports to Taiwan.
RAW MATERIALS
Items proposed by China include raw materials that are scarce in Taiwan, such as chemicals, Duh said, without elaborating.
The ministry also defended the decision that automobiles, which initially were to be included in the early harvest list proposed by Taiwan, would not be included in the final list.
The transportation sector is partially included in Taiwan’s final list, such as auto components, bicycles and bicycle components, but not automobiles.
“Completing discussions on the automobile sector before an ECFA is signed would be difficult, given the complexity,” the ministry said.
RESERVATIONS
Meanwhile, Premier Wu Den-yih (吳敦義) said Taiwan would continue to work for the inclusion of certain petrochemicals and machinery on a list of products eligible for lower tariffs under an ECFA.
China has reservations about Taiwan’s requests to include polypropylene, polyvinyl chloride and polyethylene, as well as digital control machine tools because of concerns of the impact on key industries, Wu said.
The negotiations over the list were stuck partly because Chinese petrochemical manufacturers — most of which are state-owned enterprises — strongly oppose tariff cuts or waivers for their Taiwanese rivals, Wu said, adding that China also has a strong disinclination to open its markets to Taiwanese digital control machine tools.
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