ECFA Makes Taiwan a New Gateway to China

On June 29, 2010, Taiwan and China signed the Economic Cooperation Framework Agreement ("ECFA"), a landmark bilateral trade agreement that will make Taiwan a new gateway to China. The ECFA, which came into effect on September 12, 2010, is the latest, and the most significant, installment in a series of cross-strait agreements signed between Taiwan and China over the past few years to foster closer economic relationships between the two sides of the Taiwan Strait.

What is the ECFA?

The ECFA seeks to provide a framework for Taiwan and China to gradually reduce tariffs on goods, remove non-tariff trade barriers, open up service sectors, and lift investment restrictions, thereby promoting closer cross-strait economic cooperation and interaction. The ECFA is essentially a free trade agreement ("FTA"), encouraged by the World Trade Organization ("WTO") to be entered into among its members.