Not a done deal but new pact in works
Analysts are hopeful that tariffs could be cut on thousands of products in agreement between Beijing and Taipei - but no one knows when
When Taiwan and old foe mainland China signed a trade liberalisation pact in mid-2010, officials said its tariff cuts were just a start. Now the two sides are hashing out a new agreement for a US$127 billion trade partnership.
Import tariffs could be reduced or axed for potentially thousands more items shipped between the two sides via a slowly evolving deal that the island government's Mainland Affairs Council says has been discussed since March 2011.
Taiwan and the mainland were still exchanging ideas on the scope of products to include and how to divide up tariff cuts, the council said. An agreement should surface at the next formal meeting between negotiators for the two sides, a council official said. No meeting date has been fixed.
When the pact is approved, lower import tariffs are considered all but sure to increase the value of trade between export-reliant Taiwan and its top partner, the mainland.
"We estimate that Taiwan could take a lead over its competitors in terms of advantages in entering the mainland China market and that signing the agreements would help Taiwanese investors on the mainland increase their competitiveness and purchasing in Taiwan," the council said.
In the first nine months of last year, two-way trade came to US$90.5 billion, or 21 per cent of the island's total, after reaching US$127.6 billion for all of 2011, according to Taiwan government figures. In 2010, when the first round of import tariffs fell, the figure was US$112.9 billion and just US$78.7 billion a year earlier.