TAIPEI - A historic trade pact between Taiwan and China came into effect Sunday, tying the two sides closer together than at any point since their split more than six decades ago.
The landmark Economic Cooperation Framework Agreement (ECFA), signed in June, is the most sweeping pact ever penned by the two sides, officially still not at peace after the end of a civil war in 1949.
"With ECFA becoming effective, the cross-Strait ties marched into a new era... Taiwan should better utilize the trend," Taiwan's President Ma Ying-jeou told reporters while on a trip to the southern Tainan county.
China's commerce ministry also hailed the hard-won pact.
"We're pleased to see the agreement taking effect... We believe the implementation of the pact will further promote exchanges and cooperation in cross-strait trade and help the economies develop together," spokesman Yao Jian said in a statement on the ministry's website.
For the Beijing-friendly President Ma, who came to power in 2008 on a promise to improve the economy through a rapprochement with the mainland, the signing of the ECFA was a triumph.
Ma's administration has said the pact will create 260,000 jobs in the island's export-dependent economy and boost growth by up to 1.7 percentage points.
Fundamentally, however, the pact will only solidify a move towards closer economic interaction that has taken place despite frequent political tension between the two sides.
China is Taiwan's largest trading partner, its largest investment destination, and now also home to a growing number of Taiwanese.
It is estimated that about one million people from the island live on the mainland, many of them in the Shanghai area.
They, and thousands of short-term travelers, now have access to 370 direct flights a week, a sharp contrast with the situation a few years ago when all travel routes passed through Hong Kong.
Chiang Pin-kung, Taiwan's top China negotiator who signed the ECFA for the island, is expected to travel to Shanghai and meet with his Chinese counterpart Chen Yunlin this week, Chiang's spokesman said.
In what was painted as a boost for Ma's pro-Beijing agenda, the ECFA was passed last month by island lawmakers without a single dissenting vote.
But the formal recording of unanimous approval masked a refusal by members of the anti-China opposition, centered around the Democratic Progressive Party (DPP), to take part in the vote.
The DPP wants formal independence from China and has a significant following on the island.
China, however, says Taiwan has been part of its territory since ancient times and insists on eventual reunification, even if it means war.
"ECFA will contribute to a further widening of the wealth gap," DPP spokesman Tsai Chi-chang told AFP, adding that the people of Taiwan rather than the government should have had the chance to accept or reject the agreement.
Taiwanese media said recently that closer economic ties with China had contributed to a record income gap between rich and poor on the island.
The most prosperous 20 percent in Taiwan reported average disposable incomes of 1.79 million Taiwan dollars (US$56,000) last year, or 6.34 times more than the income of the poorest 20 percent, according to government figures.
Some economists say that the deal with China makes it possible for Taiwanese businesses to move their production to the mainland, cutting costs and increasing profits.
However, by doing so they also reduce job opportunities in Taiwan, hitting the incomes of the island's blue-collar population, economists have warned.
Despite the concerns, the trade pact looks set to push interaction between the two sides to a new level.
The deal will confer preferential tariffs, and in some cases zero tariffs, on 539 Taiwanese products from petrochemicals and auto parts to machinery -- representing 16 percent of the island's total export value to China.
At the same time, only about 267 Chinese items, or 10.5 percent of China's export value to Taiwan, will be placed on the "early harvest" list to enjoy zero or falling tariffs.
A new regulation requiring price registration of imported milk powder products for children does not break any WTO commitments, an official said, rejecting concerns expressed by dairy firms and foreign ambassadors.
Vietnam has risen 16 places to the 59th spot in global economic competitiveness rankings, the World Economic Forum said in an annual report.
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