How will people across the Taiwan Straits benefit from ECFA?



Pineapple growers in the city of Tainan in southern Taiwan are going through hard days over fears that the Economic Cooperation Framework Agreement (ECFA) may end this year, despite not having an exact termination date.

The trade pact was inked on June 29, 2010, and put into effect on September 12 the same year to curtail trade barriers across the Taiwan Straits with a reasonable time limit of 10 years. Under article 16 of the agreement, the Chinese mainland and Taiwan agree to "gradually reduce and remove trade and investment barriers and create a fair environment" in the two areas.

That indicates the trade agreement is about to expire at the end of September this year. Once the deal cannot be renewed, 12 percent additional tariffs will be imposed on pineapples and traditional industrial products exported from Taiwan to the mainland.

Tainan is the second-largest producer of pineapples in Taiwan with a planting area of 1806.47 hectares, second only to Pingtung County's 3,935.58 hectares. Its pineapples are mainly sold to the mainland, which accounts for 97 percent of its export to countries and regions outside Taiwan, according to Tainan City Councillor Wu You-huan.


Tainan's Agriculture Director Hsieh Ya-ch'ing said that this year's output of pineapples in Tainan stands at about 73,000 metric tons. If 5 percent of the fruit goes to the mainland, then 3,358 metric tons would be imposed tariffs, which would cost an additional seven million yuan. At the current price of 16.6 yuan per kilogram, additional tariffs of 1.9 yuan per kilogram will be imposed.

Echoing an early harvest program under the framework of the ECFA in force since January 2011, the mainland cut back on and later eliminated tariffs on 539 items of Taiwan goods, with Taiwan following suit on 267 mainland products.

The early harvest program is designed to accelerate the implementation of ECFA, by reducing the tariffs of some products, agricultural products, in particular, Taiwan can attain early access to the mainland's huge domestic market in advance.

Benefiting from the trade pact, the export of Taiwan's farm produce to the mainland tripled from 2010 through 2018, the mainland then served as the largest export market of farm produce in Taiwan, according to the State Council Taiwan Affairs Office.

The Chinese mainland has lifted 37.53 billion yuan (5.32 billion U.S. dollars) of tariffs from goods of Taiwan as of June 2019 since an early harvest program of the economic pact took effect in 2011, according to Xinhua News Agency.

Small- and medium-sized businesses, farmers, and fishermen in Taiwan have saliently benefited from the early harvest program of the ECFA, denoted Ma Xiaoguang, a spokesperson with the State Council Taiwan Affairs Office at a press briefing last October.

Huang Wei-cher, the Mayor of Tainan, noted in June, "If there is no ECFA, it will be a worry for Taiwan's trade. Calculated based on the total value of Taiwan's foreign sales of 14.8 billion U.S. dollars last year, about 5 percent of or 780 million U.S. dollars goods went to the mainland, and the tariffs saved were up to 23 billion NT dollars."

Buoyed by the ECFA, bilateral trade and Taiwan businessmen's investment in the mainland maintained solid growth in 2019, reaching to the tune of 228 billion U.S. dollars and 1.59 billion U.S. dollars respectively, based on data by China's General Administration of Customs.

(Cover image via VCG)