ECFA dispute settlement mechanism in the works

This mechanism is intended to settle disputes, such as whether a lowered tariff should be applied to a particular good, after efforts to reach a common ground through regular negotiation channels fail, CNA reported.

Trade officials have revealed to CNA that the dispute settlement mechanism under the ECFA will be similar to those under any free trade agreements signed between Taiwan and other countries, and such mechanism could be conducted through a special committee or an arbitration panel made up of lawyers or scholars acceptable to both sides.

Shih Yen-shiang, Taiwan's Minister of Economic Affairs, has confirmed that the creation of a dispute settlement mechanism will top the agenda for the next round of post-ECFA talks, right after the creation of an investment protection agreement.

According to trade officials, ECFA is a bilateral agreement between Taiwan and China under which goods can be traded with lower or preferential tax rates. Given the bilateral nature of the agreement, a dispute settlement mechanism should be in place, in line with dispute settlement bodies under the multilateral World Trade Organization framework.

Such a mechanism should be charged with resolving issues that arise from the implementation of the main ECFA document. Such issues may include a reduction of tariffs on a particular good, or other issues faced by either side in their trade activities.

According to trade officials, any disputes should be first settled through regular negotiations between officials from both sides in an “eyeball-to-eyeball” manner, and should be transferred to the dispute settlement body once such negotiations fail.

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