Transcript PowerPoint 簡報 - Overseas Office Republic Of China

經濟部
Challenge vs Opportunity -- Tasks and
Prospects in Signing ECFA
Bureau of Foreign Trade, MOEA
Mar.16, 2010
經濟部
Outline
I. Preface
II. Possible Effects of Signing ECFA
III. Most Recent Progress in Promoting ECFA
IV. Early Harvest Program and Government
Measures for Vulnerable Industries
經濟部
I. Preface
1. Change of Cross-Strait Relations before &
after May 20, 2008
2. Challenges to Taiwan’s Trade Development
3. What We Confronted / will Confront
經濟部
I. Preface
1. Change of Cross-Strait Relations before &
after May 20, 2008
From divergence to convergence
From confrontation to negotiation
From antagonism to cooperation
經濟部
I. Preface
1. Change of Cross-Strait Relations before &
after May 20, 2008
Look squarely at reality,
Build mutual trust,
Put aside disputes,
Create a win-win situation
經濟部
Results of the Chiang-Chen talks
The first round of talks :June13 , 2008
Signed the “Minutes of Talks on Cross-Strait
Charter Flights” and “Cross-Strait
Agreement on Travel by Mainland
The second round of talks :NOV. 4 , 2008
Confirmed the content of the four agreements on
cross-strait air transport(2), sea transport(3),
postal services(4), and food safety(5)
Residents to Taiwan”(1)
The talks between Chiang Pin-kung, Chairman of Taiwan’s Straits Exchange
Foundation (SEF), and Chen Yunlin, Chairman of mainland China’s Association
for Relations Across the Taiwan Strait (ARATS)
The third round of talks :April 26 , 2009
The two sides completed and signed agreements on joint
crime-fighting(6) and mutual judicial assistance, crossstrait financial cooperation(7), and regular cross-strait
flights(8). They also reached a consensus on matters
pertaining to promoting mainland investment in
Taiwan(9).
The fourth round of talks :December 22, 2009
Three agreements on agricultural product
inspection and quarantine(10); cross-strait
cooperation on industrial product standards(11),
inspection and certification; as well as on fishing
crew collaboration(12).
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經濟部
I. Preface
2. Challenges to Taiwan’s Trade Development
經濟部
2. Challenges to Taiwan’s Trade Development
Taiwan’s trade performance over the years
Trade Milestones in Taiwan: Taiwan’s foreign trade turned a surplus for the first time in 1971;
Taiwan’s foreign trade value exceeded US$100 billion in 1988 and exceeded US$200 billion in
1995. Total trade value has continued to grow rapidly since 2003, exceeding US$300 billion in
2004, exceeding US$400 billion in 2006 and exceeding US$496 billion in 2008, which was more
than 120 times greater than in 1971, thus becoming the 18th leading exporter in the world.
TAIWAN TOTAL TRADE VALUE
2008 Ranking of Global
Exporters in Merchandise
Country
Ranking
Germany
1
600.0
2
3
4
5
6
12
13
14
15
16
17
18
500.0
400.0
300.0
200.0
100.0
2008
2007
465.9
Rapid Growth in Trade
China
US
496.1
2006
426.7
(Unit: US$ billion)
Japan
Netherlands
France
South Korea
Hong Kong
2009
378.4
Singapore
Saudi Arabia
Mexico
Spain
1995
217.3
Taiwan
1988
110.2
1971
3.9
2004
351.1
0.0
1971
1973
1975
1977
1979
1981
1983
Data Source : DGBAS, R.O.C. ;WTO
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
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經濟部
2. Challenges to Taiwan’s Trade Development
Severe plunge in Taiwan’s exports since Sep. 2008
Due to the rapid slowdown in the international economy caused by the global financial
tsunami, Taiwan’s exports have declined for eleven consecutive months since Sep. 2008.
According to the latest export performance, the worst situation ended in the 4th quarter
of 2009 with exports amounting to US$59.8 billion, an increase of 8% compared with the
previous 3 quarters of consecutive growth; though it hasn’t fallen back to the 2008 level .
30
Unit:
US$ billion;
%
100
Export value
Growth rate
80
25
60
20
40
15
20
0
10
-20
5
-40
0
-60
2008
Aug Sep
2009
Aug Sep
2010
Feb. Mar. Apr. May Jun. Jul.
Oct. Nov. Dec.
Feb. Mar. Apr. May Jun. Jul.
Oct. Nov. Dec.
Jan.
.
.
Jan.
.
.
Jan.
Export value 22.1 17.6 24.2 22.6 23.6 24.3 22.9 25.3 21.9 20.8 16.8 13.6 12.4 12.6 15.6 14.8 16.2
Growth rate
17
17.3
19
19.1 19.8
20
20
21.8
11.8 18.3 22.7 13.9 20.5 21.2 7.9 18.2 -1.6 -8.3 -23.3 -41.9 -44.1 -28.6 -35.8 -34.3 -31.5 -30.4 -24.4 -24.6 -12.7 -4.7 19.3 46.9 75.8
Data source: Taiwan Directorate General of Customs
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經濟部
Taiwan’s major export destinations have shifted to China
1985
US$30.8 billion
1998
US$110.6 billion
US
48.1%
US
26.6%
Europe
17.8%
Others
7.6%
Others
16.6%
ASEAN-6
6.0%
Japan
8.4%
Japan
11.3%
Hong Kong
8.3%
2009
US$203.7 billion
Europe
9.7%
Japan
7.1%
US
11.6%
Europe
11.1%
ASEAN-6
16.4%
Mainland
China & Hong
Kong
41.1%
Mainland
China & Hong
Kong
23.2%
Others
14.3%
Data source: Taiwan Directorate General of Customs;
Compiled by the BOFT
ASEAN-6
14.8%
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經濟部
2. Challenges to Taiwan’s Trade Development
Taiwan's Share of Trade in GDP from 1998 to 2009
Unit :%
140
120
100
80
60
40
20
0
1998
1999
2000
2001
2002
2003
2004
2007
2008
2009
77.9
77.7
89.8
80.3
83.5
91.2
106.1 107.4 117.1 121.6
126.6
99.7
EXPORT
40
40.7
46.2
43.3
45.5
49.3
55.1
55.9
61.5
64.4
65.2
53.7
IMPORT
37.9
37
43.6
37
38.0
41.9
51.0
51.5
55.6
57.2
61.4
46
TOTAL TRADE
2005
2006
Data Source: DGBAS, R.O.C.
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經濟部
2. Challenges to Taiwan’s Trade Development
Trade contribution to Taiwan's economic growth
Taiwan is an export-oriented economy and foreign trade has played a vital role in
Taiwan's economic development over the past years. Taiwan’s trade contribution has
accounted for around 60-70% in recent years, showing the importance of trade in
Taiwan's economic development.
Item
Period
Dom estic Dem and
Econom ic
Grow th
Governm ent Gross Fixed
Increase in
Private Final
Rate
Capital
Final
Sub-total
Stocks
Consum ption
(yoy)
Consum ption Form ation
Dem and of Rest of The World
Sub-total
Exports of
Goods and
Services
Less:
Im ports of
Goods and
Services
Trade
contribution
to Taiwan's
economic
growth
1999
5.97
2.70
3.27
-0.67
0.57
-0.46
3.27
5.70
2.43
54.77
2000
5.80
5.65
3.03
0.19
2.07
0.36
0.15
9.01
8.86
2.59
2001
-1.65
-6.21
0.62
0.27
-5.18
-1.93
4.56
-4.73
-9.29
-----Note
2002
5.26
2.84
2.12
0.24
0.27
0.22
2.42
5.81
3.39
46.01
2003
3.67
2.37
1.85
-0.18
-0.02
0.72
1.30
5.53
4.23
35.42
2004
6.19
7.34
3.27
0.08
3.12
0.88
-1.15
8.86
10.01
-18.58
2005
4.70
1.85
1.81
0.03
0.64
-0.63
2.86
4.86
2.00
60.85
2006
5.44
0.95
0.92
-0.09
0.02
0.10
4.49
7.34
2.85
82.54
2007
5.98
1.34
1.23
0.25
0.12
-0.27
4.65
6.49
1.85
77.76
2008
0.73
-1.54
-0.33
0.08
-2.36
1.07
2.27
0.40
-1.88
310.96
2009
-1.87
-3.34
0.83
0.42
-2.20
-2.39
1.48
-6.47
-7.94
-----Note
Data source：Directorate General of Budget, Accounting and Statistics, Executive Yuan
Note: The economic growth rate in 2001 and 2009 are negative, hence the contribution can not be calculated.
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經濟部
I. Preface
3. What We Confronted / will Confront
經濟部
I. Preface
3. What We Confronted / will Confront
 Taiwan acceded to WTO as a formal & full
member on Jan. 1, 2002
 WTO Rules:
 Standstill
 MFN
 National Treatment
 Transparency
經濟部
I. Preface
3. What We Confronted / will Confront
Turbulence
 FTAs/RTAs Exceptions to MFN Rules
 266 FTAs/RTAs are currently in effect, of
which 41 are signed by Asian countries.
 Taiwan has signed 4 FTAs with 5
countries, which account for only 0.187%
of our global exports.
經濟部
The Trend and Present State of Acceleration of Economic
Integration
Delay in concluding WTO Doha Round has caused the spread of international bilateral
FTAs and accelerated the deepening of regional economic integration in the world.
US-South Korea FTA
EU-Mexico Free
Trade Area
North American
Free Trade Area
（NAFTA）
European
Union (EU)
ASEAN-South Korea Free Trade Area
(set to lower tariffs on most goods to
ASEAN-China Free Trade Area
0% in 2010)
(set to lower tariffs on most
goods to 0% in 2010)
ASEAN-Japan
Comprehensive Economic
EU-South
Partnership Agreement
(set to lower tariffs on most
ASEAN-India Korea
goods to 0% in 2018)
CAFTA－DR
Establishing Free
Trade Area of the
Americas (FTAA)
Southern
Common
Market
(MERCOSUR)
ASEAN Free
Trade Area
(AFTA)
China-Hong Kong-Macao
Closer Economic
Partnership
Arrangement (CEPA)
Japan-Singapore
New Age Economic
Partnership Agreement
ASEAN-Australia + New Zealand Free
Trade Area
Signed Feb. 27, 2009
Entered into force July 1, 2009
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經濟部
Taiwan’s world ranking and share of exports and
imports over this past decade Unit：US$ billion;%
Exports
Amount
Ranking
Imports
Share
Amount
Ranking
Total Trade Amount
Share
Amount
Ranking
1999
121.6
14
2.2
110.7
15
1.9
232.3
15
2000
148.3
14
2.3
140.0
15
2.1
288.3
14
2001
126.3
14
2.0
108.0
16
1.7
234.3
16
2002
135.3
14
2.0
113.2
16
1.7
248.6
15
2003
150.6
15
2.0
128.0
16
1.6
278.6
15
2004
182.4
17
2.0
168.8
16
1.8
351.1
16
2005
198.4
16
1.9
182.6
16
1.7
381.0
16
2006
224.0
16
1.9
202.7
16
1.6
426.7
17
2007
246.7
16
1.8
219.2
17
1.5
465.9
17
2008
256.0
18
1.6
240.0
18
1.5
496.0
17
Data source：WTO International trade statistics annually
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經濟部
I. Preface
3. What We Confronted / will Confront
Impact in 2010
ASEAN + China FTA
1 Jan. 2005, began implanting tariff reductions on
goods.
1 Jan. 2010, zero tariff on most goods.
ASEAN + South Korea FTA
1 July 2007, began implementing tariff reductions
on goods.
1 July 2010, zero tariff on 90% of goods.
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經濟部
I. Preface
3. What We Confronted / will Confront
Impact in the next 10 years
Countries
ASEAN + India
FTA
ASEAN + Japan
EPA
Japan + Vietnam
EPA
ASEAN + Australia
& New Zealand FTA
Dates
Terms
Will enter into force Mar. 2010
Between 2013 and 2016,
mutual reduction of
import tariffs on 80% of
goods.
Dec. 2008
By 2018, zero tariff on
91% of goods
Oct. 2009
By 2019, zero tariff on
92% of total bilateral
trade goods.
Jan. 2010
By 2020, zero tariff on
96% of goods.
經濟部
I. Preface
3. What We Confronted / will Confront
Impact in the next 10 years
Countries
Dates
South Korea + USA
FTA
Signed Jun. 2007.
Pending approval of
respective National
Assemblies.
South Korea + EU
FTA
To be signed in Q1 2010.
(Initialed 15 Oct. 2009)
South Korea + India
FTA
Entered into force
1 Jan. 2010.
Terms
95% of S. Korean and USA
industrial and consumer
goods will be exempt from
tariffs within 3 years of FTA
implementation.
India commits to tariff
cuts/exemptions for 85% of
S. Korean goods.
S. Korea commits to tariff
cuts/exemptions for 93% of
Indian goods.
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經濟部
I. Preface
3. What We Confronted / will Confront
Potential effects of future East Asia FTAs/RTAs
FTAs/RTAs currently under study
 ASEAN+3 (mainland China+Japan+Korea)
 ASEAN+6 (mainland China+Japan+Korea+
India+Australia+New Zealand)
 Mainland China+Japan+Korea
 Korea+China FTA (5 joint studies completed as
of June, 2008)
 Free Trade Area of the Asia Pacific (FTAAP)
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經濟部
I. Preface
3. What We Confronted / will Confront
The future options
 For political reasons, we haven’t yet had
any positive response from “target trading
partners” to our endeavor in promoting
bilateral FTAs.
 Work on the Cross-strait ECFA?
經濟部
II. Possible Effects of Signing
ECFA
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經濟部
Improve Macroeconomic Scale (1/2)
Effects of signing ECFA: Macroeconomy (dynamic analysis)
Scenario
Scenario 1
Scenario 2
GDP (%)
1.65
1.72
Exports (%)
4.87
4.99
Imports (%)
6.95
7.07
Trade condition (%)
1.42
1.41
Social welfare
(US$ million)
7,710.90
7,771.00
Trade balance
(US$ million)
1,757.90
1,779.40
Total production
(US$ million)
28,004.73
28,884.20
Item
Resource: GTAP 7.0 database, “Evaluation on the Impact of ECFA,” CIER, 2009.06
Scenario 1: Maintain current restrictions on agriculture and industry sectors, liberalize items now open to
import, and have zero tariff for all Chinese goods.
Scenario 2: Maintain import restrictions and do not reduce tariffs only in the agriculture sector; eliminate
tariffs and fully liberalize import of industrial items.
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經濟部
Improve Total Employment
(2/2)
Effects of signing ECFA: employment (dynamic analysis)
Simulated
Scenario
Employment
(default)
Scenario 2
Scenario 1
Percent
change
Persons
Percent
change
Persons
10,100,720
2.6
257,286
2.6
263,100
Agriculture
(1-32)
716,218
1.7
12,288
1.7
11,951
Manufactg.
(33-112)
1,890,890
1.4
25,961
1.5
28,105
Services
(113-161)
7,493,612
2.9
219,037
3.0
223,044
Note: The employment numbers in each industry are estimates based on employment table 2006 published by
the Directorate-General of Budget, Accounting and Statistics.
Resource: “Evaluation on the Impact of ECFA,” CIER, 2009.06
25
經濟部
Gain Larger Savings Margin on Tariffs
than China(1/2)
Possible effects of tariffs (based on 2008
performance) (1/2)
Currently:
China sets no special limitation on Taiwan products; its average
tariff on industrial goods is 9%.
– Taiwan’s exports to China (including Hong Kong) have reached
US$100 billion (tariffs amount to US$9 billion)
Taiwan maintains restrictions on 1,300 industrial and 834
agricultural goods with the average tariff on industrial goods at 4%.
– China’s exports to Taiwan are valued at US$35 billion (tariffs amount
to US$1.4 billion)
We ran a US$65 billion trade surplus; Taiwan’s tariff
burden exceeded China’s by US$7.6 billion.
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經濟部
Gain Larger Savings Margin on Tariffs than
China (2/2)
Possible effects of tariffs (based on 2008) (2/2)
 If both sides eliminate tariffs after signing ECFA and exports for both
sides grow by 20%, then:
Export growth
Taiwan:
Exports to China will increase
US$120 billion
China:
Exports to Taiwan will increase
US$42 billion
Taiwan’s trade surplus will
expand US$78 billion
Tariff elimination
Taiwan:
Will save US$10.8 billion in
tariff expenditure
China:
Will save US$10.8 billion in
tariff expenditure
Taiwan gains more!
We will benefit more from the export expansion since China has
larger market scale than we do.
27
經濟部
Deepen Relations b/w Taiwan and
Major Trade Partners Expected
n
•
n n
n
n
nn
nn
n
n
n
nn
n
n
n
n
•
n
n
n
n
n
FTAAP
•
n
China
nn
n
nn
•
nn
nn n n
n
P4
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經濟部
Create Taiwan’s Advantages in
Services Trade
In addition to trade in goods, ECFA can also provide numerous benefits to
Taiwan’s services trade by helping foreign businesses invest in Taiwan as well as
Taiwan businesses investing in China.
In the Early Harvest List, Taiwan would like to request “market access”
commitments from China in the financial and banking sectors for example, by
reducing regulations on Taiwan banks setting up branches in China, restrictions
on asset thresholds, and requirements for 3 consecutive years of profits. This will
not only provide financial services to Taiwan businesses in China, but also help
them resolve financial problems. Financially related domestic peripheral
industries will also benefit while creating more employment opportunities.
The securities industry: Taiwan requests China to reduce restrictions on
investments and investment advisory services by allowing Taiwan trusts to invest
in China. This will enable China to raise capital for investing in Taiwan’s stock
markets, increase business revenues, and enhance professional capabilities,
which will benefit normal cross-strait financial business.
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經濟部
Strengthen Taiwan’s Advantages in
Terms of International Position (1/5)
Taiwan will enter the mainland Chinese market ahead of
its main competitors.
ECFA will help convert the mainland from a production
base to a core market for businesses in Taiwan.
Taiwan will become a priority cooperation partner and
gateway for foreign businesses seeking to enter the
mainland Chinese market.
ECFA will accelerate Taiwan’s development into a
regional industrial operations center.
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經濟部
Strengthen Taiwan’s Advantages in Terms of
International Position(2/5)
Taiwan will enter the mainland Chinese market
ahead of its main competitors.
 Tariffs on most industrial products exported from Taiwan to
China will be reduced to zero.
 By getting in ahead of competitors like South Korea and Japan,
Taiwan will replace their positions in that market.
 Take petrochemical raw materials as an example. In 2007, China
imported approximately US$76.3 billion, of which Taiwan accounted
for 15%, South Korea 20%, and Japan 18%. If China’s average import
tariff ( 6.17%) were reduced to zero, that would help Taiwan to win
over Japan and South Korean’s combined market share (38%), worth
approximately US$38 billion.
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經濟部
Strengthen Taiwan’s Advantages in Terms of
International Position(3/5)
ECFA will help convert the mainland from a production base to a
core market for businesses in Taiwan.
 Once the mainland reduces tariffs on most industrial goods
to zero, it will help businesses to keep Taiwan on their supply
chains and continue supplying their customers through the
three links.
 For instance, when the mainland reduces tariffs on scooter
parts from approximately 10% to zero, the various satellite
factories may choose to ship from Taiwan, since then they
will benefit from the zero tariffs as well as the better quality
of production in Taiwan.
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經濟部
Strengthen Taiwan’s Advantages in Terms of
International Position(4/5)
Taiwan will become a priority cooperation partner and gateway for
foreign businesses seeking to enter the mainland Chinese market.
Taiwan provides:
Ripple effects:
Taiwan provides：
 Preferential tariffs for
goods exported to
China
 Better IPR
protections
 The three links
 Incentives for building
R&D centers in
Taiwan
Ripple effects：
 Help foreign companies
choose Taiwan as gateway
into China’s market
 Set up regional R&D,
production, or operation
centers
 Taiwan will be a first-choice
“global innovation center” and
“Asia-Pacific trading hub” for
multinationals.
33
經濟部
Strengthen Taiwan’s Advantages in Terms of
International Position(5/5)
ECFA will accelerate Taiwan’s development
into a regional industrial operations center.
Effects of trade liberalization (three links, personnel
flows, lowered tariffs, removal of non-tariff barriers,
etc.) will remake Taiwan into a multifunctional
operations center with capabilities in transshipment,
logistics, distribution, end-processing, etc.
Coupled with the relaxation of restrictions on Chinabound investment, measures to encourage the
return of Taiwan businesses to the domestic market
will make Taiwan their “operational HQ.”
34
經濟部
International Views on ECFA
(1/2)
American Chamber of Commerce 2009 Taiwan White
Paper (May 2009)
 We would also hope that the conclusion of this trade agreement
with China would pave the way for Taiwan to participate in regional
trade blocs and enter into bilateral FTAs with additional trading
partners.
Japanese Chamber of Commerce & Industry, Taipei 2009
Taiwan White Paper Issue (October 2009)
 If the ECFA comes into being, it should form a great opportunity for
Taiwan and Japan to discuss signing an FTA. Therefore, this
Chamber sincerely looks forward to progress being made in the
ECFA negotiations.
35
經濟部
International Views on ECFA
(2/2)
European Chamber of Commerce Taipei 2009-2010 Position
Paper Overview (October 2009)
 The sooner Taiwan signs the ECFA with China, the quicker political
impediments to other countries (including the EU) signing economic
agreements with Taiwan will be removed.
 In order to revitalize Taiwan’s economy and increase trade, the ECCT
recommends that the government seeks to sign an Economic
Cooperation Framework Agreement (ECFA) with China and commit to
Trade Enhancement measures with Europe as soon as possible. This will
help to secure Taiwan’s position as an important link between
China and Europe and reintegrate Taiwan into the global and regional
economy.
36
經濟部
Prospects for Cross-Strait
Economic
and Trade Cooperation
Establish a stable
cross-strait economic
and trade cooperation
framework; open a
favorable cross-strait
interaction mechanism.
Improve the basis of
promoting Taiwan’s
opportunities to enter into
bilateral FTAs with other
countries and participate in
regional economic and
trade cooperation.
Make Taiwan a global center of innovation, an AsiaPacific hub of economy and trade, and the
headquarters for Taiwanese businesses.
37
經濟部
Possible Effects of Signing ECFA
Promoting Internationalization of Taiwan’s Economy,
Trade and Investments
Promote dynamic modifications
in cross-strait economic and
trade relations
Cross-strait links will
ease the bottleneck of
participating in regional
cooperation
• Facilitate cross-strait projects and crossstrait industry exchanges
• Expand cross-strait direct flights
• Open Taiwan’s production enterprises to
Chinese investments
• Loosen the 40% ceiling on investments in
China and other industry restrictions
• Promote the ECFA
• Sign FTAs
• Join ASEAN + N
Integration of business
opportunities in global
and mainland markets
Tokyo
Silicon Valley
Shanghai
Shanghai
Dual Golden
Triangles of HighTaipei
Taipei
Tech Industries
38
經濟部
III. Most Recent Progress in
Promoting ECFA
39
經濟部
1.Steps Toward Signing the Agreement
 Individual studies conducted by each side
Joint studies
Signing
Negotiation
Send to legislatures for approval
Take effect
Latest Development: Joint study period is
completed, and the first formal negotiation was
held in Beijing on 26 January 2010.
40
經濟部
2.Achievements of the first round
of formal negotiation (1/3)
Name of agreement
Basic structure of ECFA’s clauses
Rules and positions of “Early Harvest
Lists” on goods and services
Arrangements for the next round of
formal negotiation
41
經濟部
2. Achievements of the first round
of formal negotiation
(2/3)
Name of agreement
 Each side agreed that the tentative Chinese title is「海峽兩
岸經濟合作架構(框架)協議」
 The English title “Economic Cooperation Framework
Agreement” (ECFA) may be used temporarily.
Basic structure of ECFA’s clauses
 Include market access on trade in goods, trade in services,
rules of origin, early harvest lists, trade relief, dispute
settlement, investment and economic cooperation
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2. Achievements of the first round
of formal negotiation
(3/3)
Early Harvest Lists
 The two sides further discussed rules and positions on
the early harvest lists on trade in goods and services;
agreement not yet reached.
Arrangements for the next round
 The two sides agreed in principle to hold the next
round in Taiwan.
 The Taiwan side aims to have ECFA signed at the 5th
Chiang-Chen meeting in late May or early June.
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IV. Early Harvest Program and
Government Measures for
Vulnerable Industries
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1. ECFA’s Effects on Taiwan Industries
Industries likely to benefit more:
Both production and export increases for the
plastics, machinery, textiles, petroleum and coal
products, and steel industries
Industries likely to be more adversely
affected:
Electrical machinery and electronic products: the
negative outcome is due to the low cross-strait
tariff rates (0.71% and 0.58% respectively) for
those sectors, but assumptions in the model do
not necessarily reflect the reality
Other transportation tools, and wooden products
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2. Early Harvest Program (provisional) (1/2)
For trade in goods:
 Selection process:
 The Ministry of Economic Affairs (MOEA) entrusted CIER to compile a
preliminary detailed list by analyzing and screening trade statistical
data and collecting industry opinion through questionnaires. Then, to
reconfirm the opinions and demands from industrial sectors, the
MOEA commissioned the Chinese National Federation of Industries
(CNFI) to hold a public hearing on 8 January 2010 that was attended
by its 152 member associations on the design of the early harvest list.
 Selection principles:
 (1) Agricultural goods would not be included; (2) items for which
opening would be difficult would be excluded; (3) include items for
which tariff reduction is urgent and apply tariff deductions that
correspond to those in the Chinese market, e.g. ASEAN+1.
 Plan:
 Provisionally, we will propose several hundred important product
items in the petrochemical, textile, machinery and components,
automotive, and other industrial sectors.
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2. Early Harvest Program (provisional)
(2/2)
For trade in services:
 Four principles:
 Sectors that match our commercial interests (opportunities) and those in which
Taiwanese companies have expressed demand (urgency)
 Sectors that are unrestricted in FTAs between China and other WTO members
(including the CEPAs) and sectors included in the service opening commitment
list that China submitted to the WTO Doha round.
 Sectors that are on the first stage open list (late June 2009) permitting
mainland Chinese funds to enter Taiwan.
 Sectors for which Taiwan’s degree of opening as pledged in the WTO is
greater than China’s.
 After several cross-sector discussions among services authorities,
approximately ten service items are planned for proposal.
 On 6 January 2010, a public hearing on “ECFA’s Effects on Service
Sector Development,” was held by the MOEA and CNFI, during which
MOEA further explained the above principles and solicited opinions, which
were consulted and used to make revisions.
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3. Possible effects of early harvest
on Taiwan
Trade in goods
Those listed in the early harvest program (e.g.
petro-chemicals, textiles) enjoy tariff exemption
 costs down   profits rise 
However, some less competitive industries will
suffer, so that various government measures will be
implemented.
Trade in services
Strive for better-than-WTO treatment to gain
the advantage of market access in China
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4. Government Response Measures (1/3)
Strive for better terms during negotiation
 Items not yet permitted for import from mainland China and those
that primarily meet domestic demand will not be included on the
Early Harvest list, or they will be included on the list of sensitive
sectors, or the government will try in negotiation to exclude them
from lower tariff or to get a longer period of adjustment for them.
During the negotiation process, they would not be included on the
“Early Harvest” list, or the government would try to get a more
prolonged period of adjustment for them.
 Include anti-dumping and safeguard measures in the negotiations,
so that when domestic industries are affected by imports of large
amounts of inexpensive products, relevant relief measures can
be taken to reduce the impact.
 Include a termination clause. If China does not abide by the
agreement or special situations occur, we may notify China of
termination of the agreement.
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4. Government response measures
(2/3)
Implement a project to support industries’ adjustment to
trade liberalization
 To deal with the possible effects on industries and laborers, three
supportive strategies will be adopted; total budget for the next ten
years will be NT$95 billion.
Stimulus, guidance
Adjustment
Damage relief
Guidance on industrial upgrading
Provision of SME loan guarantees
Support for SME cluster development
Assistance in export promotion
Guidance on industrial upgrading
Low-interest loans for upgrading plants and
equipment
Employment assistance
Assistance for industrial transformation and new
product line development
Assistance for career changes
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4. Government response measures
(3/3)
Implement a project to strengthen guidance for
industries adjusting to trade liberalization
 MOEA has already launched this project for industries that are
domestic demand-oriented, less competitive, and easily affected by
impact of trade liberalization. It includes:
1. Industry surveys,
strategic planning
2. Assistance for
market expansion and
promotion


Surveys to keep tabs on development status and problems faced
Strategic planning on future development based on survey results
 Set up MIT quality mark certification system
 Assist businesses on domestic and foreign market expansion
 Organize joint MIT product fair activities
3. Technical and
management
guidance
 Help businesses improve added-value by introduction of design esthetics
 Use existing tech capabilities to provide timely tech assistance on
upgrades to individual businesses to make them competitive more quickly
4. Improved
occupational training
 Provide training for technical personnel in line with industry needs and
improve quality of personnel
 Based on needs of industrial clusters or systems, provide training for
cross-industry, multifunctional capabilities, to help resolve overall issues
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ECFA
Helping people to make a living, improving
Taiwan’s competitiveness
Please visit the ECFA website
(www.ecfa.org.tw)
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