Cross-Straits Trade Deal to Cut Tariffs, Open Markets

Beijing and Taipei signed a historic trade deal on Tuesday to boost economic ties and further ease political tensions that have haunted cross-Straits ties for most of the past six decades.

The deal, focusing on tariff concession and easier market access, will remove tariffs within two years on 539 Taiwan export items to the mainland worth $13.84 billion as well as 267 mainland export items to Taiwan valued at $2.86 billion.

The pact will also give Taiwan firms access to 11 service sectors on the mainland, including banking, accounting, insurance and hospitals.

Taiwan industries including petrochemical, auto parts and financial firms will be the first to benefit from this deal, together with mainland raw material producers and service sectors like film and computer services, in tariff reduction and market openness.

Negotiators inked the deal in Chongqing, which was the country's wartime capital during the War of Resistance against Japanese Agression from 1937 to 1945.

Zheng Lizhong, vice-chairman of the Beijing-based Association for Relations Across the Taiwan Straits (ARATS), said the talks over the trade pact, namely the Economic Cooperation Framework Agreement (ECFA), is the "most difficult issue" since the mainland and Taiwan restarted semi-official talks in June 2008, after Taiwan leader Ma Ying-jeou of the KMT came to power in May that year.

"It (ECFA) is an unprecedented, wide-ranging, complicated and tough topic. It will inject great momentum in cross-Straits ties," he said.

"This is a critical moment in the development of long-term relations. We should seize the opportunity to work together and build mutual trust," Chiang Pin-kung, chairman of Taiwan's semi-official Straits Exchange Foundation (SEF), said ahead of the signing.

His Beijing counterpart, Chen Yunlin, chairman of ARATS, called it an agreement of "equal consultation and mutual benefits".