With the conclusion of the recent Taiwan regional leadership election, the future of cross-Straits relations faces new challenges and uncertainties. Economic and trade interactions between the Chinese mainland and Taiwan are at a critical juncture, especially concerning the Economic Cooperation Framework Agreement (ECFA).
If Taiwan authorities do not return to the path of the “1992 Consensus,” the Chinese mainland has indicated it may intensify trade countermeasures, including suspending tariff concessions on more products under the ECFA. This move reflects growing concerns over the perceived imbalance in economic and trade exchanges between the two sides.
Since the ECFA’s inception, the benefits have been notably skewed. Under the agreement’s “early harvest” list, the Chinese mainland reduced tariffs on 539 products from Taiwan, while Taiwan reduced tariffs on only 267 products from the mainland. As of 2022, Taiwan has enjoyed tariff preferences amounting to approximately $134.53 billion in exports to the mainland, with tariff concessions totaling $8.52 billion. In contrast, the mainland’s exports to Taiwan under tariff preferences amounted to about $25.1 billion, with concessions of $970 million.
Despite these significant benefits, Taiwan authorities have not fully honored their commitments under the ECFA, which include gradually reducing or eliminating tariff and non-tariff barriers on a substantial majority of goods between both parties. Instead, they have imposed various restrictions and bans on over 2,500 types of agricultural and industrial imports from the mainland, without transparent reasons or procedures. According to an investigation report released by the Ministry of Commerce at the end of last year, these actions constitute de facto trade barriers.
In an effort to promote the development of cross-Straits relations and enhance the well-being of people on both sides, the Chinese mainland has maintained a stance of goodwill, making unilateral concessions in economic and trade exchanges. However, the lack of reciprocity from Taiwan authorities has led the mainland to consider necessary countermeasures. The recent suspension of tariff concessions on 12 products in the ECFA’s “early harvest” list, announced by the Customs Tariff Commission of the State Council, signals a potential shift in policy.
On January 9, the Ministry of Commerce indicated it would take further steps to suspend tariff concessions on more ECFA products. This development sends a clear message: If Taiwan does not embrace the ECFA as the mainland does, the mainland may intensify its countermeasures. The existing pattern of unequal openness and unilateral concessions is likely to evolve toward a more balanced, rule-based exchange.
It is important to note that tariff concessions under the ECFA represent only a small fraction of cross-Straits trade and may not significantly impact broader economic interactions. In the context of global value chain restructuring, changes in investment strategies by Taiwan businesses could have a more profound effect on cross-Straits economic and trade relations. This aspect warrants greater attention from the mainland when formulating Taiwan-related economic and trade policies.
The evolving dynamics of cross-Straits economic cooperation underscore the need for mutual trust and adherence to agreed-upon frameworks. As both sides navigate this complex landscape, the focus remains on fostering stable and beneficial relations that contribute to regional prosperity.
Reference(s):
Cross-Straits economic cooperation suppressed after Taiwan election
cgtn.com
