I-Sha Liu/Pauline Wang/Susan Chen
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On June 29, 2010, Taiwan and mainland China signed the Cross-Strait Economic Cooperation Framework Agreement (the "ECFA" or the "Agreement"). Official negotiations on trade in goods pursuant to the Agreement are scheduled to begin within six month after September 12, 2010, which is when the ECFA became effective. To more quickly realize the goals of the Agreement, Taiwan and mainland China have agreed to an "early harvest" plan for the goods listed in Annex I and the services listed in Annex IV of the Agreement. Provisional Rules of Origin Applicable to Products Under the Early Harvest for Trade in Goods (the "Rules of Origin") are set forth in Annex II. According to the ECFA, preferential tariff treatment will be provided to the goods listed in Annex I that satisfy the requirements of Annex II. For example, if a printing press, which is included in mainland China's early harvest list, is deemed to have originated from Taiwan under the Rules of Origin, it will enjoy preferential tariff treatment when imported into the mainland.
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The Rules of Origin provide a definition for "originating goods." The Product Specific Rules laid out in Article 4 will be used as one of the basis to determine the originating status of goods. Teams from both sides are currently working on the details of the rules specified in Article 4, such as change in tariff classification, regional value content, processing operation, or other requirements. Consultation on these rules is expected to be completed, at the latest, before the implementation of the early harvest plan.
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In addition, in order to fulfill the needs of business enterprises and to effectively execute the early harvest plan, the Ministry of Finance is planning ten new services that will provide a safe, convenient, and green customs environment for cross-strait trade. The ten services are:
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Create reference tables for the tariff classifi-cations of early harvest goods.
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Assist business enterprises in determining whether their goods are included in the early harvest list through a preview mechanism.
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Publicize the Rules of Origin and relevant customs procedures to promote better understanding of such rules and regulations amongst business enterprises.
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Establish cross-strait points of contact and implement consultation mechanisms to better resolve problems that may arise for business enterprises going through customs.
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Promote paperless operation and cross-strait electronic document exchanges to avoid repetitious forms, to increase efficiency and lower costs, and to ensure the accuracy and validity of information on file.
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Promote the use of modern technology such as radio-frequency identification ("RFID") devices that track the content and location of containers to increase the overall efficiency of the cross-strait supply chain. To that end, letters of intent are already in place amongst the various port authorities, free trade zones, and tax free zones. The Ministry of Finance recognizes that customs are also an important part of this cooperative framework.
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Combine the existing container-tracking systems operated by customs, ports, and the warehousing industry to provide real-time online query functions so that business enterprises may better manage their operations.
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Promote mutual recognition of Authorized Economic Operators ("AEOs") to maximize the benefits of the AEO certification system.
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Harmonize the regulation and supervision of tax free zones in Taiwan and mainland China to facilitate the movement of tax free goods.
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Promote cross-strait cooperation in risk management and pursue a customs mutual assistance agreement to provide a safer and more convenient customs environment.
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