By Bloomberg News June 13 (Bloomberg) — Taiwan and China started a third round of talks today aimed at strengthening economic and trade ties, amid rising speculation that they may sign an agreement this month. Huang Chih-peng , director-general of Taiwan’s Bureau of Foreign Trade met Tang Wei, head of Taiwan, Hong Kong and Macao affairs at China’s Ministry of Commerce, in a Beijing hotel to discuss the Economic Cooperation Framework Agreement, or ECFA. A pact will likely be agreed by the end of June, Taiwan’s Commercial Times reported today, citing a business group. Taiwan President Ma Ying-jeou has been pushing for an accord to bolster export-dependent Taiwan’s economy after a Chinese trade agreement with the Association of Southeast Asian Nations began this year. The two sides have agreed to include goods and services, as well as a so-called early-harvest list of industries that will be the first to enjoy lower tariffs. Ma’s administration has also said an accord may be signed this month. “The preferred-tariff treatment won’t happen at least for the next one to two years,” Tony Phoo , an economist at Standard Chartered Plc, said by phone in Taipei today. Still, any agreement “will boost market sentiment and confidence overall,” said Phoo. Cross-strait ties improved after President Ma took office in May 2008 and abandoned his predecessor’s pro-independence stance. Ma is seeking better ties with the island’s biggest trading partner and No. 1 overseas investment destination. ‘Very Rich Resources’ “We can make use of each other’s advantages,” China’s Tang said in opening remarks today. “Taiwan has abundant capital, advanced production technology, rich enterprise- management experience and international sales channels. On the other hand, the mainland has very rich resources and a lot of labor and huge potential markets.” Taiwan and China may sign the agreement by the end of this month, the Commercial Times reported today, citing Kuo Shan-huei, chairman of the Association of Taiwan Investment Enterprises on the mainland. Wang Yi, director of China’s Taiwan Affairs Office, told Taiwan businessmen last night that the two sides will probably agree to the accord, the newspaper said, citing Kuo. Banking, Insurance Taiwan and China agreed in December to boost cooperation in fishing, agriculture and industrial goods at the fourth cross-strait talks as ties reached their warmest in 60 years. In November, they signed three memoranda of understanding to ease access to each other’s banking, securities and insurance industries. Trade between the mainland and Taiwan increased 68 percent in the first four months of 2010 compared with same period last year, and Taiwan investment rose 44.7 percent, China’s Tang said today. An agreement would be in “both parties’ interests, so we have better resource allocation and cooperation,” Tang said. An agreement with China is “vital to Taiwan’s economy,” Chiang Pin-kung , chairman of the Taipei-based Straits Exchange Foundation, said in February. An agreement would help to ensure Taiwan can compete with regional rivals and may prompt other nations to agree to similar pacts with the island, Chiang said. North Korea and Taiwan are the only two economies in the region that haven’t signed trade accords with China and Asean, which groups Singapore, Thailand, Indonesia, Malaysia, Vietnam, Myanmar, Laos, Cambodia, the Philippines and Brunei. Taiwan has been unable to join the wave of bilateral and multilateral free- trade agreements in recent years because China regards the island as a rebellious province. Taiwan’s Democratic Progressive Party opposes the trade accord and on Dec. 20 rallied 100,000 people in Taichung city to protest against Ma’s China policies. — Henry Sanderson in Beijing and Weiyi Lim in Taipei. Editors: Jake Lloyd-Smith , Jim McDonald To contact Bloomberg News staff on this story: Henry Sanderson in Beijing at 86-10-6649-7548 or hsanderson@bloomberg.net
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Taiwan, China Hold Third-Round Trade Talks Amid Optimism of June Agreement
