An Introduction on the Economic Cooperation Framework Agreement between Taiwan & China Justin Huang Secretary General Taiwan Textile Federation October 14 th, 2010 1
What is the ECFA? What Benefits resulted from the ECFA? 2
What is the ECFA? After 3 rounds of formal negotiations held in January, March and June 2010, Chairman P.K. Chiang, Ph.D., of the Taipei-based Straits Exchange Foundation completed the signing of the Cross-Strait Economic Cooperation Framework Agreement (ECFA) with his counterpart Mr. Chen Yunlin, President of the Beijing-based Association for Relations Across the Taiwan Strait, at Chongqing, China, on June 29 th, 2010. 3
What is the ECFA? The contents of the ECFA composed of 1 text and 5 annexes. Annex1: Trade of Goods Annex 2: Trade of Services Annex 3: Provisional Rule of Origin Estimated Benefits: A. 1.65 1.72% growth of Taiwan s GDP. B. Increase 263,000 job opportunities. C. 5% growth of Taiwan s export. Annex 4: Trade Remedy Measures Annex 5: Early Harvest List 4 Reference: Chung-hua Inst. for Economic Research
What is the ECFA? Annex 5: Early Harvest List 136 items of the 539 items China offers are textiles and apparel products. 539 items of products from Taiwan to China will gain reduced tariffs. 21 items of the 267 items Taiwan offers are textiles and apparel products. 267 items of products from China to Taiwan will gain reduced tariffs. TAIWAN CHINA 5
In 2009, the import value of 136 items from Taiwan to China is US$1.874 billion, taking the share of 21% of the value of total import of 136 items from all sources. It is noted that the import value of the 136 items accounts for 69% of the total import value from Taiwan. Unit: 1 million USD Products\Year 2007 2008 2009 World Taiwan Share World Taiwan Share World Taiwan Share H.S. 50-63 25,378 3,286 12.90% 24,944 2,932 11.86% 21,784 2,717 12.50 % 136 Items 9,896 2,254 22.80% 9,861 2,072 21.00% 8,914 1,874 21.00 % Share of 136 items to HS 50-63 39.00% 68.60% 39.50% 70.70% 40.90% 69.00% Source: GTA- China Customs 6
In 2009, the import value of 21 items from China to Taiwan is US$107 million, taking the share of 14.5% of the total import value of textiles and apparel from China. Unit: 1 million USD Products\Year 2007 2008 2009 World Taiwan Share World Taiwan Share World Taiwan Share H.S. 50-63 2,674 685 25.60% 2,702 785 29.10% 2,190 738 33.70% 21 Items 215 94 43.70% 212 96 45.10% 201 107 53.10% Share of 21 items to HS 50-63 8.00% 13.70% 7.90% 12.20% 9.20% 14.50% Source: Taiwan Customs 7
In the Early Harvest List offered by China, there are 18 items for tariff rate under 5%, 107 items for rate between 5% and 15%, and 11 items for rate above 15%. The export values of these items from Taiwan to China are US$307.6 million, US$1,551.5 million, and US$14.86 million respectively. Based on the tariff reduction schedule and considering the growth of export value, stimulated by tariff concession, the benefit is conservatively estimated to reach to US$120 million. Tariff Escalation First Year (Jan. 01, 2011) Second Year (Jan. 01, 2012) Third Year (Jan. 01, 2013) 0<X 5 0 CHINA 5<X 15 5% 0 15<X 10% 5% 0 0<X 2.5 0 TAIWAN 2.5<X &.5 7.5<X 2.5% 5% 0 2.5% 0 8
Fashion with Functions Sports Health + Beauty Health-care Safety Comfort Sports Casual Environmentally Friendliness 9
Strategic Development of Taiwan Textile Industry Innovation for functional & eco-friendly textiles Added Value Promotion of branding strategy Enhancement of e-business & e-commerce Technology Innovation Process Improvement Manufacturing Design Merchandizing Branding Retailing 10
TAIWAN FUNCTIONAL TEXTILS As a verification system, Taiwan Functional Textiles has been jointly developed by Taiwan Textile Federation and Taiwan Textile Research Institute, and registered as a certificate mark in Taiwan, China, Japan, the US and EU since 2001. There are 18 standards have been developed and introduced to the industry so far. 11
TAIWAN FUNCTIONAL TEXTILES Good for the qualityspecified products on a continuous production line. 4, Quality Guarantee Certification Mode 1, Pattern Certification Mode Certification Modes Good for newly developed samples. 2, Batch- Examination Certification Mode Good for the mills who can declare the yielded products be the same quality as its R&D samples. 3, Consistent with Prototype Mode Good for single batches of quality-specified products. 12
A Solid Verification & Certification System for Taiwan Functional Textiles Multifunctional Textiles Innovation Eco-friendly Textile Development Taiwan s s Advantages on Textile Development Upgrading the Evaluation Technology for Functional Textiles Continuous Investment on Textile Innovation & Design 13
On June 29th, 2010, when Taiwan and China signed the ECFA, the Cross-Strait Agreement on Intellectual Property Rights Protection and Cooperation was also signed by Chairman P.K. Chiang, Ph.D., of the Taipeibased Straits Exchange Foundation, and his counterpart Mr. Chen Yunlin, President of the Beijing-based Association for Relations Across the Taiwan Strait, at Chongqing, China. In other words, Taiwan s IPR would be effectively protected accordingly. 14
Business Advantages of Taiwan Better Productivity of Labors and Technicians Sufficient and Economical Power Supply Transparent Environment Protection Regulations High Performance of Industrial Clusters Modern Banking Services and Lower Loan Interests Competitive Costs of In-land Transportation and Shipping 15
Welcome to TITAS 2010 - Taipei Innovative Textile Application Show on Oct. 13-15, 2010. Thank you very much! 16 16