Top Taiwanese and Chinese negotiators met in Shanghai on Friday to finalize an agreement on trade in services meant to help advance trade liberalization across the Taiwan Strait.
The agreement is a follow-up pact under the landmark Economic Cooperation Framework Agreement signed in June 2010.
Pacts on investment protection and customs cooperation were signed in August 2012, but the sides are still negotiating pacts on commodity trade and dispute resolution, hoping to conclude those negotiations by the end of this year.
In opening remarks, Lin Join-sane, chairman of Taiwan's quasi-official Straits Exchange Foundation that handles negotiations with China in the absence of formal ties, told Chen Deming, chairman of the SEF counterpart in China, the benefits of the agreement on trade in services are "multiple."
"It helps both sides open their respective markets, create a favorable foundation for their sectors, upgrade each other's competitiveness, advance trade exchanges and cooperation, upgrade the effects of ECFA and speed up the signing of ECFA's follow-up pacts," he said.
Most importantly, the pact will help not only Taiwan sign free trade agreements with other countries, but also both sides could join regional blocs such as the Trans-Pacific Partnership and Regional Comprehensive Economic Partnership, he said.
The services industry accounts for about 70 percent of Taiwan's gross domestic product and nearly 45 percent of China's GDP.
Citing a study conducted by the Chung-hua Institution for Economic Research in 2009, Taiwan's economic ministry said full liberalization of the services industry would boost Taiwan's GDP by 0.57 percent.
Apart from finalizing details of the services trade pact, Lin and Chen will examine implementation of 18 agreements signed since 2008.
Lin told Chen during the opening remarks there is room for improvement in the implementation of the 18 agreements and to improve will require "efforts from both sides."