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China and Taiwan to hold talks on major trade pact

BEIJING -- Experts from China and Taiwan on Tuesday launched the first round of talks aimed at paving the way for a major trade pact between the one-time rivals, both sides said.

The one-day meeting comes amid improving ties, nearly two years after President Ma Ying-jeou took office on a pledge to step up trade relations as a way to boost the island's stalled economy.

The talks, expected to centre on procedural issues, will set the stage for higher-level negotiations before the end of June, the state Xinhua news agency reported.

"We hope today's meeting can end in common understandings on basic principles and procedures for the negotiation of the pact," the head of the Chinese delegation, Zheng Lizhong, was quoted by Xinhua as saying.

Zheng, vice-president of the Association for Relations Across the Taiwan Strait (ARATS), said the pact would help push forward "normal, systematic and free economic relations" between the mainland and Taiwan, the report said.

Through the planned deal, the two sides aim to "open markets to each other and give more favourable treatment to (each other) in areas including commodities and services trade" and realise "mutual benefits", Zheng said.

The government in Taipei is eager to conclude the deal with Beijing, known as the Economic Cooperation Framework Agreement (ECFA), which it says could boost growth and employment on the self-ruled island.

But the opposition Democratic Progressive Party, which favours independence from China, fears it would increase Taiwan's reliance on Beijing, resulting in the loss of 1.6 million jobs and imperil the island's de facto separate status.

Taipei wants to maintain restrictions over some agricultural imports from the mainland and the arrival of labourers from China in order to ease opposition fears over the pact.

"Farmers are concerned about the import of agricultural products ... and there are also worries about the competition for old-economy industries," said the head of the Taiwanese delegation, Kao Koong-lian.

"We hope the mainland side can understand," said Kao, deputy chairman of the quasi-official Straits Exchange Foundation (SEF).

ARATS and the SEF have been authorised by their governments to handle negotiations between Taiwan and China in the absence of official contacts.

Three agreements on supervisory cooperation in the fields of banking, securities, futures and insurance went into effect earlier this month.

They provide for thresholds and preferential policies for both sides to enter each other's financial markets.

Other agreements have touched on food quarantine, industrial standards and fishing crews.

Since Taipei eased an investment ban in the early 1990s, local Taiwanese businesses have channelled about 150 billion US dollars into China.

China took US$83.7 billion of the island's total exports in 2009, or 41 percent of the island's overseas sales.

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