Implementing the Economic Cooperation Framework Agreement and Other Agreements

The impact of and prospects for ECFA

　　Taiwan and mainland China signed the Economic Cooperation Framework Agreement (ECFA) in June of 2010. In the agreement, the mainland side provided “early harvest” treatment to 18 agro-products from Taiwan, with year-by-year tariff reductions starting on January 1, 2011. In 2012 the value of exports of agro-products from Taiwan to mainland China reached US$789 million, an increase of 18% over 2011 (and of 48% over the level in 2010 prior to the ECFA taking effect). The value of exports of early harvest agro-products was US$161 million, an increase of 28% over the figure for the preceding year of US$126 million (and an increase of 192% over the level in 2010 prior to the ECFA taking effect). The most significant gains were in live grouper and tea, with increases in export value of 28% and 5% respectively (and of 212% and 71% over the level in 2010 prior to the ECFA taking effect).

　　As tariffs on the early harvest products from Taiwan will fall to zero in 2013, the competitiveness of these exports in the mainland market will increase. In follow-up negotiations of ECFA, the government will give primary consideration to the sustainable development of the agricultural sector in Taiwan and to the interests of farmers, and will actively seek further tariff concessions from Mainland China for agro-products from Taiwan that have export potential.

Protection of intellectual property rights for agro-products

■ On the basis of the Cross-Strait Intellectual Property Right Protection Cooperation Agreement, the cross-strait working group on plant variety rights held their first work conference in March of 2012 and in November undertook technical exchanges for testing and verifying plant variety rights, with particular respect to roses, Phalaenopsis orchids, and jujube. With respect to plants about which Taiwanese industry has particular concern—Doritaenopsis orchids, mango, jujube, and loquat—mainland China has already agreed to include these in a revised list of protected plant varieties. As of the end of 2012, two firms in Taiwan (with a total of four varieties) had applied to mainland China for plant variety IPRs, of which priority is claimed for three varieties of Phalaenopsis orchids.

■ The COA participates in the “cross-strait IPR protection field inspection team” organized by the Ministry of Economic Affairs. In November of 2012 the team traveled to mainland China for exchanges, where they engaged in negotiations on issues such as a mediation mechanism for issues arising under the IPR agreement, the need for strengthening cooperation, and the titles of application organizations. Handling of such matters will improve the effectiveness of the IPR agreement in actual practice.

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

■ Taiwan and mainland China signed the Cross-Strait Agreement on Cooperation in Inspection and Quarantine of Agricultural Products on December 22, 2009. Thereafter, the two sides built a mechanism for communication between the competent authorities, and as of the end of 2012 there had been a total of 602 cases handled through this mechanism. Moreover, the two sides have held six working conferences, reaching agreement on numerous concrete matters. The two sides have also convened three cross-strait conferences on inspection and testing of agro-products, building a platform for cross-strait communication on related issues.

■ Based on negotiations between the two sides, on June 16, 2012, mainland China announced the “Inspection and Quarantine Requirements for Rice Exported from Taiwan to Mainland China.” The announcement of these regulations cleared the way for Taiwan to export rice to mainland China, opening an entirely new market to Taiwanese rice farmers.

■ As of the end of 2012, five makers of meat and poultry products had exported 45,331 kilograms of spiced pork and processed poultry and egg products to the mainland, while 25,755 kilograms of Taiwan-grown oriental pears had also been exported to the mainland. The COA inspected these products and tested them for disease prior to export. We have also asked the mainland side to stipulate standards governing agro-chemical residues for fruits, vegetables, and teas that we are allowed to export to the mainland; until such standards are set, the two sides have agreed to provisionally use the standards set domestically by Taiwan or by the international Codex Alimentarius Commission.

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

■ Taiwan fishing boat owners often hire crew members from mainland China for operations outside of Taiwan’s territorial waters. In order to bring this process under regulatory oversight, the two sides signed the Cross-Strait Agreement on Cooperation in Respect of Fishing Crew Affairs, which came into effect on March 21, 2010. The agreement creates a cooperative mechanism for managing issues related to fishing boat crew affairs, and stipulates clear rights and responsibilities to be included in all contracts signed by the four parties that are links in the hiring process: a Taiwan fishing boat owners, an approved employment broker in Taiwan, an authorized management corporation in mainland China, and an individual mainland Chinese crewman.

■ The agreement makes it possible to protect the rights and interests of both the Taiwanese fishing boat owners and the mainland crewmen. Under the agreement, in the event of deliberate action or major negligence, by a crew member or a boat owner, leading to losses by the other party, the side found liable—the mainland crewman plus the management corporation or the Taiwanese boat owner plus the employment agency—assumes joint and several liability for compensation. As of the end of 2012, there were 16 accredited employment brokers in Taiwan, the COA had announced the names of 10 management companies designated by mainland China, and 1,797 mainland Chinese crewmen were under contract to Taiwanese fishing boat owners for operations outside of Taiwan’s territorial waters, while coastal fishing boat owners had, on the basis of this system, and acting through employment agencies, brought in a total of 9,799 mainland Chinese crewmen.

Cross-strait professional agricultural exchanges

 In order to continue promoting communication between agricultural experts from mainland China and Taiwan, we have reassessed the mechanism for reviewing visits to Taiwan by agricultural professionals from mainland China, as well as amended the regulations governing the review process for applications for such visits, and we carefully scrutinized all such applications. In 2012, 524 groups (totaling 7,205 visitors) from mainland China were invited to Taiwan to participate in professional exchanges, and we also reviewed applications from 137 groups of agro-business people from mainland China (totaling 547 visits) to come to Taiwan.

 In 2011 the COA continued to ban the import of 830 agro-products from mainland China, and to prevent import into Taiwan of agro-products produced in mainland China through investments made there by Taiwanese. We also continued to ban Taiwanese investment in mainland China for agro-products for which Taiwan has a comparative advantage in production techniques or technology, while, at appropriate times, reassessing the possibility of relaxing restrictions on items needed by specific industries for their market deployments and strategies. Under the preconditions of (a) supporting the development of domestic agricultural industries and (b) avoiding the outflow of competitive advantages, we are constructing a “win-win” investment model for cross-strait cooperation within the framework of an “industrial value chain.”

Penetrating the mainland Chinese market for agro-products

 As a result of the advantages produced by government policies—e.g. permitting direct cross- strait flights and shipping, the signing of ECFA—mainland China has become the second largest export market for Taiwan agro-products. Exports to mainland China in 2012 were US$789 million, an increase of 18% over 2011. The deficit in cross-strait trade in agro-products has fallen from US$281 million in 2008 to NT$38 million in 2012. The top increases in exports among fresh agro-products have been in grouper (US$131.06 in 2012, an increase of 28.4%) and sugar apples (US$5.12 million, 188.2%). Moreover, since mainland China agreed on June 16 of 2012 to allow exports of rice from Taiwan to mainland China, export value for the first year was US$1.32 million, a success story for penetrating the mainland Chinese market.

 In order to prepare the ground for deeper penetration of the mainland market, the COA has adopted a strategy of differentiating and branding Taiwan agro-products in the marketplace through the use of the “Taiwan Premium Agricultural Products” image. We have guided farmers’ and fishermen’s associations in Taiwan to participate in both general and specialized trade fairs, such as SIAL China 2012 in Shanghai; Taiwan Trade Fair events in Beijing, Shanghai, Tianjin, and Qingdao; the Fuzhou Fishery Expo; the Beijing Seed Congress; and the Guangzhou Tea Expo. We have also assisted exporters to cooperatively hold “Taiwan Fruit and Vegetable Fairs” as well as marketing events for processed livestock and poultry products, and for CAS-certified goods, in chain supermarkets in Beijing, Shanghai, and Xiamen.

 Following on the successful application for registration of the “CAS Taiwan Premium Agricultural Products” trademark in mainland China in April of 2011, which will serve as a collective trademark for marketing Taiwan agro-products in mainland China, in 2012 the COA set up display areas at trade fairs in Beijing, Tianjin, Qingdao, and Shanghai, to promote the brand image of premium agro-products from Taiwan. These events raise the profile of the CAS trademark and promote the sale of fresh, safe, and superior quality agro-products from Taiwan.

 In cooperation with the President Group, the COA has set up a specialty store called “Wan Xiang” for long-term product promotion in Shanghai. This store serves as a platform for advertising, promotion, wholesaling, and marketing of Taiwan agro-products, providing private- sector exporters with a stable long-term channel through which they can market their products.