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Early Harvest List for Trade in Goods and Tariff Reduction Arrangements (Source: Industrial Development Bureau, MOEA)

  • Date:2010-07-05

1. Items and Scale 1. The items and scale of the early harvest goods under the Economic Cooperation Framework Agreement (ECFA) are based on the tax regulations and trade information exchanged between the two sides at the first formal negotiations on January 26, 2010.

2. According to mainland China's 2009 customs data on tariff regulations and trade, Taiwan's total exports to mainland China of the 539 early harvest items on the Taiwan list amounted to US$13.84 billion in 2009, representing 16.1% of Taiwan's total cross-strait exports by value.

3. According to Taiwan's 2009 customs tariff regulations, mainland China's total exports to Taiwan of the 267 early harvest items on the mainland list amounted to US$2.86 billion in 2009, representing 10.5% of the mainland's total cross-strait exports by value.

4. Comparison of the Early Harvest Lists

Mainland List (Mainland Tariff Reductions) Taiwan List (Taiwan Tariff Reductions)
Industry Items Amount (US$1 billion) Industry Items Amount (US$1 billion)
Petrochemical 88 5.944 Petrochemical 42 0.329
Textile 136 1.588 Textile 22 0.116
Machinery 107 1.143 Machinery 69 0.474
Transportation equipment 50 0.148 Transportation equipment 17 0.409
Other 140 4.997 Other 117 1.53
Agriculture 18 0.016      
Total 539 13.838 Total 267 2.858

5. The ratio of the items and values of the Taiwan and mainland China early harvest product lists is 1:2and 1:5, respectively

6. Regarding method of tariff reduction, the two sides have adopted different tariff escalations and will reduce tariffs to zero in three years during the two-year implementation period for the early harvest lists:

Mainland's Planned Tariff Reduction Schedule Taiwan's Planned Tariff Reduction Schedule
Tariff Escalation 1st Year of Early Harvest Plan(2011.1.1) 2nd Year of Early Harvest Plan(2012.1.1) 3rd Year of Early Harvest Plan(2013.1.1) Tariff Escalation 1st Year of Early Harvest Plan(2011.1.1) 2nd Year of Early Harvest Plan(2012.1.1) 3rd Year of Early Harvest Plan(2013.1.1)
0 Zero tariff   0 Zero tariff
5 5% Zero tariff 2.5 2.50% Zero tariff
15 10% 5% Zero tariff 7.5 5% 2.50% Zero tariff

2. Impact of Early Harvest Plan on Taiwan's Industries

1. Softening the competitive threat Taiwan facing in the Mainland market from ASEAN products

One-fifth of the products on the Mainland list (Mainland Tariff Reductions) include Taiwan products that face intense competition from ASEAN products, both strongly competitive and less competitive items, including plastic materials (PC, PP, etc.), synthetic fiber raw materials like p-Xylene, plastic making machinery, instruments parts, and camera modules.

Taiwan has competitive advantages over ASEAN countries, but high tariffs weaken the competitiveness of Taiwanese products: For example, petrochemical raw materials like vinyl chloride (5.5% tariff), butanol (5.5% tariff), lithium ion batteries (12.0% tariff).

2. Opportunity to take market share from Japan and Korea in Taiwan's competitively strong industries

Of the total items on Mainland list (Mainland Tariff Reductions), 17% enjoy a considerable competitive advantage over competing Japanese and Korean products, such as bicycles and components thereof, petrochemical raw materials, machine tools, other polyester non-deformed fabric, and other discharge lamps. Early harvest treatment will make these products more competitive in the mainland market, helping Taiwan to take market share from Japan, Korea and other countries.

3. Early entrant market opportunities for Taiwan's agricultural industry and traditional SMEs

Half of the products on the Mainland list (Mainland Tariff Reductions) are in sensitive traditional industries, products made by SMEs, and agricultural products, including automobile parts, water heaters, filters, small home appliances, hand tools, accessories, underwear, shoes, socks, bags and luggage and other products and orchids, bananas, tea and other agricultural products. These products currently face tariff rates of 10% or higher in the mainland.

Including these products under the early harvest plan will help companies to expand in mainland market, develop new market opportunities, increase the scale of Taiwan's industries, and promote industrial development. It will also create new job opportunities since most of these products are in labor intensive industries.

4. Protecting Taiwan's agricultural and traditional SME industries

Taiwan list (Taiwan tariff reductions) consists mainly of petrochemical products (plastic materials and miscellaneous chemicals) and industrial machinery and parts thereof. In the bicycle and textile sectors, most items on the list are intermediary components and parts. Apart from mainland products already allowed into Taiwan, nearly half of the products are items that both sides have mutually opened up their markets to.

Regarding Taiwan's sensitive traditional industries, SME-intensive industries and agricultural products, import items controlled by the mainland, and products subject to anti-dumping duties will not be included on the Taiwan list (Taiwan tariff reductions).

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