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Updated Tuesday, December 22, 2009 2:04 pm TWN, By Chou Hui-ying, Lin Shu-yuan and Alex Jiang, CNA

Taiwan, China open new round of talks on economic issues

TAIPEI, Taiwan -- Taiwan and China's top negotiators formally opened their latest round of talks Tuesday following a surprise announcement a day earlier that a planned agreement on double taxation avoidance had been removed from the meeting's agenda.

"Both sides had reached a consensus on the main content of the agreement on avoiding double taxation, " said Chiang Pin-kung, the chairman of Taiwan's Straits Exchange Foundation (SEF) , in his opening remarks.

"On the technical front, however, both sides believe that more time is needed," Chiang explained.

Never in the previous three rounds of the carefully scripted Chiang-Chen talks had the two sides put a planned agreement on hold just before the two negotiators met formally to seal the deals.

A number of factors were cited by local media as contributing to the last minute snag. Some reports suggested the two sides succumbed to mounting pressure from Taiwanese-invested companies in China that were worried they would have to pay higher taxes under the new agreement.

Others zeroed in on a possible sovereignty-related dispute.

The proposed tax agreement is based on the OECD (Organization for Economic Cooperation and Development) standard, which uses a "state to state" framework, and the two sides were reportedly unable to come up with language that papered over wording in some clauses that touched on the sovereignty issue, according to reports of the Economic Daily News.

The negotiators are still expected to sign agreements on fishing crew cooperation, agricultural quarantine inspection, and industrial product standards, inspection and certification.

For his part, Association for Relations Across the Taiwan Straits (ARATS) President Chen Yunlin, representing China, said that both sides will "exchange ideas on the principle" of an economic cooperation framework agreement (ECFA) during this round.

The talks, which started at 9 a.m., are expected to conclude at 2:30 p.m., with both sides holding separate press conferences on the outcome.

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	Chairman of Taiwan's Straits Exchange Foundation (SEF), Chiang Pin-kung, right, shakes hands with his counterpart Chen Yunlin, chairman of China's Association for Relations Across the Taiwan Strait (ARATS), on the second day of cross strait negotiations in Taichung, central Taiwan, Tuesday, Dec. 22, 2009. (AP) Enlarge Photo


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