The economic cooperation framework agreement will institutionalize Taiwan-mainland trade

"President" Ma Ying-jeou said Friday that Taiwan needs a sound system for conducting trade with the mainland, Taiwan's largest trade partner, which is the reason why a cross-Straits trade agreement has to be reached.

He noted that Taiwan's exports noticeably picked up in the first quarter of this year, but added that Taiwan needs an institutional mechanism to ensure normal trade with the mainland over the long term.

Addressing a meeting of the General Chamber of Commerce, Ma said Taiwan has clinched free trade agreements (FTAs) with five Central American countries, but added that a similar pact with the mainland has yet to be put in place, explaining that this is why Taiwan is planning to sign an economic cooperation framework agreement (ECFA), Ma said.

Apart from customs tariffs concessions, he noted, issues surrounding the protection of intellectual property rights and investment guarantees will also be included in the ECFA in the future.

"Taiwan's next step will be to sign FTAs with other prime trade partners," he said.

"Foreign trade is vital to Taiwan's survival and we will continue striving to improve it by diversifying our export markets," Ma pledged.

In another demonstration of the importance of the cross-Straits relationship, AU Optronics, the world's third-largest flat panel maker, said Friday it plans to make inroads into the northern mainland by setting up a joint venture with the mainland's home appliance giant, the Haier Group.

The new joint venture will establish a liquid crystal display (LCD) TV panel assembly plant in Qingdao, Shandong province.

The joint venture will cost $7 million (NT$221.7 million), with Haier paying 70 percent and AU Optronics 30 percent.

"Haier is one of AU Optronics' important customers on the mainland," said Hsiao Ya-wen, a company spokeswoman.

"The joint venture is a strategic alliance that will allow AU Optronics to get closer to our customers," Hsiao said.

Currently, AU Optronics runs LCD panel assembly plants in the eastern, southern and western mainland.

Hsiao said the company expects the Qingdao plant will begin operation in the second half of this year.

Xinhua News Agency reported Haier as saying it expects to take advantage of AU Optronics' cutting edge production technology to provide high-quality TVs to its global customers.

Haier produces 15 million TVs a year and sells its products to more than 80 countries in the world, Xinhua reported.

China Daily/CNA

(HK Edition 05/08/2010 page4)