The Economic Cooperation Framework Agreement: Benefits and Prospects

Taiwan and mainland China signed the Economic Cooperation Framework Agreement in June of 2010. The mainland side agreed to give “early harvest” treatment to 18 agro- products, with year-by-year tariff reductions to begin on January 1, 2011. In the year after ECFA came into effect, the value of exports of agro-products from Taiwan to mainland China was US$665 million, an increase of 25% over the same period in 2010. The value of exports of early harvest agro-products was US$126 million, an enormous increase of 127% over the figure for the preceding year (US$55.32 million). The most outstanding increases were in live grouper, tea leaves, and turtle eggs, with increases in export value of 143%, 63%, and 19%, respectively.

Beginning in 2012 tariffs on sixteen of the items on the early harvest list will fall to zero, which should sharply increase the competitiveness of the relevant products in the mainland market. The combination of ECFA with the opening up of direct flights and shipping between the two sides has been helpful to Taiwan’s efforts to penetrate the mainland market, and in the future the ROC government will continue to strengthen the structure of the agricultural sector and raise competitiveness in order to uphold the interests of Taiwan’s farmers and fishermen.

Cross-strait agricultural exchange

The COA has continued to promote cross-strait exchanges between agricultural professionals. In 2011, 576 groups (totaling 7676 visitors) from mainland China were invited to Taiwan to participate in professional exchanges. We also reassessed the mechanism for reviewing and controlling visits to Taiwan by agricultural professionals from mainland China, and issued new regulations governing the review process for applications for such visits, and we will carefully scrutinize such applications.

In 2011 the COA continued to ban the import of 830 items of agro-products from mainland China, and to prevent import into Taiwan of agro-products produced through investments made by Taiwanese in mainland China. We also continued to ban Taiwanese investment in mainland China for 432 different items of agro-products for which Taiwan has a comparative advantage in production techniques or technology. With respect to the possible divulging of such techniques or technology, or of plant or animal varieties, as a result of investments by Taiwanese in mainland China, we have listed five critical categories (including seedlings) as “sensitive technologies” and brought them under tighter control.

Protection of intellectual property rights for agro-products

A total of 199 applications for plant varieties were accepted, and 76 were approved and certification was issued. Also, new methods for testing and certification of 17 plant varieties, including cherry blossoms, were introduced, and 18 experimental methods were set or amended for certifying new varieties.

Under the Cross-Strait Intellectual Property Right Protection Cooperation Agreement, Taiwan and mainland China mutually accept applications for IPRs for plant varieties. On January 5, 2011, some of the provisions of the Enforcement Rules for the Plant Variety and Plant Seed Act were amended to adjust relevant operational norms.

In April of 2011, two trademarks—one for Certified Agricultural Standards (CAS) premium agricultural products from Taiwan and one for CAS organic agricultural products from Taiwan— obtained approval by mainland China. These trademarks help to verify authentic Taiwan agro- products, and will help differentiate these products from those of mainland China. This will facilitate the marketing of Taiwan agro-products in mainland China and uphold the rights and interests of Taiwan’s farmers and fishermen.

Development of the mainland Chinese market for Taiwan agro-products

As a result of the advantages produced by new government policies—permitting direct cross-strait flights and shipping, the signing of ECFA—mainland China has become the second largest export market for Taiwan agro-products. The value of exports to mainland China in 2011 was US$670 million, an increase of 26% over 2010. Of these total exports, the subset of “33 products identified as having particular potential for export” had export value to mainland China of US$132 million, an increase of 130% over 2010.

In order to prepare the ground for deeper penetration of the mainland market, the COA has adopted a marketing strategy of differentiating and branding Taiwan agro-products in the marketplace through the use of the “Taiwan Premium Agricultural Products” image. An important step forward was the approval by mainland China of the registration in April 2011 of the “CAS Taiwan Premium Agricultural Products” trademark. In pursuit of orders for Taiwan agro-products, in November of 2011 the COA held its second major trade fair in Beijing to bring producers of agro-products from Taiwan face-to-face with buyers in mainland China. Moreover, we set up a special sales point and brand (“Wan Xiang”) for special high-quality agro-products from Taiwan, as part of the construction of stable long-term marketing channels.

In 2010 Taiwan received approval from the mainland side to begin shipments of live aquaculture-raised fish to 11 ports in mainland China including Fuzhou and Xiamen, and in June of 2011 four more ports were added to bring the total to 15. Sales of live fish shipped to China now cover all the major cities in southern China. The COA also provided incentives to private operators to build two additional high-efficiency live-fish transport vessels, bringing the number of such vessels engaged in this trade to 20, showing that we are having success in the mainland market for exports of live seafood. In 2011 export value was US$120 million, an increase of 58.1% over 2010 (US$77.09 million).

Cross-strait cooperation in inspection and quarantine of agro-products

After the signing on December 22, 2009 of the Cross-Strait Agreement on Cooperation in Inspection and Quarantine of Agricultural Products, the two sides built a mechanism for communication between the agencies with jurisdiction, and to date there have been a total of 389 cases handled through this mechanism. Moreover, the two sides held four working conferences (April and September of 2010 and June and September of 2011) at which agreement was reached on numerous concrete matters. As of the end of 2011, five makers of meat and poultry products had exported 36,870 kilograms of spiced pork and processed poultry and egg products to the mainland, while 17,582 kilograms of Taiwan-grown oriental pears had also been exported to the mainland. The two sides have also been adding new sets of standards governing agrochemical residues in fruits, vegetables, and tea being exported to the mainland; for products for which standards have not yet been set, the two sides have agreed to provisionally use the standards set domestically by Taiwan or by the international Codex Alimentarius Commission.

After two years of negotiations, oriental pears were approved as the 23rd item of fresh fruit allowed into mainland China from Taiwan; the first shipment was exported to the mainland on December 17.

In an effort to win even faster and more convenient customs treatment for Taiwan agro-products headed to the mainland, in May of 2011 Taiwan invited a group from mainland China to conduct inspections of pineapple at the site of production, with the hope that pineapple will serve as a demonstration product for faster inspection and quarantine methods in the future.

Implementing the cross-strait cooperation agreement on fishing boat crewmen affairs

Taiwan fishing boat owners often hire crew members from mainland China. The Cross-Strait Agreement on Cooperation in Respect of Fishing Crew Affairs, which came into effect on March 21, 2010, is designed to protect the rights and interests of both crew members and boat owners. When hiring mainland crew members, Taiwan fishing boat owners must go through an approved employment broker in Taiwan and an authorized management corporation in mainland China. The Agreement establishes joint and several liability for compensation between management companies and crew members, or between employment brokers and boat owners, in the event of deliberate action or major negligence, leading to losses by the other party, by crew members or boat owners who are found liable. The COA has accredited 19 brokers in Taiwan, and announced the names of 10 management companies designated by mainland China. As of the end of 2011, 3265 permits allowing mainland crew members to come to Taiwan had been issued, and fishing boat owners had hired 1579 crew members to help with operations outside of Taiwan’s territorial waters.