Backgrounder: ECFA, a cross-Strait economic pact

The Economic Cooperation Framework Agreement (ECFA), a wide-ranging economic pact between the Chinese mainland and Taiwan, is a current priority in work on deepening cross-Strait economic cooperation.

The agreement, still on the stage of negotiations, aims at institutionalizing economic cooperation across the Taiwan Strait and facilitating and regularizing economic and trade exchanges.

It is believed to be conducive to promoting common economic development and the well-being of the people on both sides.

The idea of a cross-Strait economic pact can be dated back to April 2005 when Hu Jintao, general secretary of the Communist Party of China (CPC) Central Committee, and Lien Chan, then chairman of the Kuomintang (KMT) Party in Taiwan, jointly issued in Beijing the "common aspiration and prospects for cross-Strait peace and development."

In the document, the two parties proposed to jointly promote all-round economic exchanges between the mainland and Taiwan and establish a cross-Strait economic cooperation mechanism.

Since then, people of insights on the two sides have constantly called for signing an agreement to set up the mechanism and regularize economic relations.

On Dec. 31, 2008, Hu Jintao delivered a speech at a meeting in commemoration of the 30th anniversary of the "Message to Compatriots in Taiwan." He put it clearly in the speech that the mainland and Taiwan could sign a "comprehensive economic cooperation agreement" and build a unique mechanism to achieve mutual benefit to the largest extent.

To advance the process, academic institutions across the Strait have conducted independent and joint researches, which concluded that signing the ECFA would exert positive impacts on trade and economic growth from a long-term point of view.

They also agreed that negotiations on the agreement should follow a principle of tackling easy topics first and move ahead step by step.

In December 2009, leaders of the mainland-based Association for Relations Across the Taiwan Straits (ARATS) and the island' s Straits Exchange Foundation (SEF) held their fourth round of talks in Taichung of Taiwan and exchanged opinions on negotiating and signing the ECFA. They also agreed to focus on the topic in their fifth round of talks this year.

On Jan. 26, 2010, experts from the mainland and Taiwan held the first round of talks on the ECFA in Beijing. The two sides exchanged ideas and reached consensus on topics including the name and basic structure of the agreement, and setting up a negotiation mechanism.

They agreed that the basic content of the ECFA would cover major economic activities across the Strait, including market access for commodity trade and service trade, Rules of Origin, early harvest program, trade remedy, dispute settlement, investment and economic cooperation.

They also agreed to further negotiate the agreement topic by topic and follow a principle of "easy things first, seeking common ground while reserving differences, proceeding in an orderly way and step by step, and advancing actively but reliably."

During the just-concluded Chinese Lunar New Year festival, Hu Jintao visited Taiwan business people in Fujian, a province facing Taiwan across the Strait.

Hu said to them that the ECFA will help promote cross-Strait economic cooperation and achieve a win-win situation with mutual benefit.

"We will take into full consideration the interests of Taiwan compatriots, especially those of farmers, in the negotiations," Hu said. 

Source: Xinhua