Trade Pact Takes Effect on the Mainland and Taiwan

A historic trade pact between the Chinese mainland and Taiwan came into effect on September 12, bringing businesses from the two sides closer together.

The landmark Economic Cooperation Framework Agreement (ECFA), signed in June, is the broadest and most comprehensive trade pact penned by the two sides.

"With ECFA becoming effective, the cross-Strait ties marched into a new era ... Taiwan should better utilize the trend," Taiwan's leader Ma Ying-jeou told reporters.

The Commerce Ministry in Beijing also hailed the hard-won pact.

"We're pleased to see the agreement taking effect ... We believe the implementation of the pact will further promote exchange and cooperation in cross-Straits trade, and help the economies develop together," spokesman Yao Jian said in a statement on the ministry's website.

Ma's administration said the pact would create 260,000 jobs in the island's export-dependent economy, and boost growth by up to 1.7 percentage points.

Chinese mainland is Taiwan's largest trading partner, its largest investment destination, and also home to a growing number of Taiwanese.

Chiang Pin-kung, Taiwan's top mainland negotiator, who signed the ECFA for the island, is expected to travel to Shanghai and meet with his mainland counterpart, Chen Yunlin, this week, Chiang's spokesman said.

The ECFA was passed last month by island lawmakers without a single dissenting vote. But the formal recording of unanimous approval masked a refusal by members of the opposition, centered around the Democratic Progressive Party (DPP), to take part in the vote.

Some economists say that the deal makes it possible for Taiwanese businesses to move their production to the mainland, cutting costs and increasing profits.

However, by doing so they also reduce job opportunities in Taiwan, economists have warned.