The Economic Cooperation Framework Agreement (ECFA) the Chinese mainland and Taiwan signed in June took effect Sunday, after the two sides completed the relevant procedures, marking a new era for economic ties across the Taiwan Strait.

The ECFA aims to establish a systematic mechanism for enhancing cross-Strait economic cooperation.

Under the agreement, the two sides agreed to gradually reduce and remove trade and investment barriers, and continue discussing agreements for commodities trade, services trade and investment for six months after the ECFA takes effect.

Hsiao Han-chun, director of Taiwan's Kaohsiung County Farmers' Association, said, "The ECFA' s coming into effect is definitely a good thing. I shout 'bravo' on behalf of Taiwan farmers and fishermen."

Hsiao said the duty cuts on farm produce will benefit farmers and fishermen in central and southern Taiwan.

According to the "early harvest" program, an integral part of the ECFA, the duties on 539 Taiwan goods and 267 mainland products will be reduced to zero in three phases within two years from Jan. 1, 2011.

The Taiwan products involved include farm produce, chemicals, machinery, textile and auto parts.

Taiwan institutions estimated the island will save nearly 30 billion New Taiwan Dollars (943 million U.S. dollars) from the duty cuts after the ECFA takes effect.

The Chung-hua Institution for Economic Research, a Taipei-based think tank, predicted the pact will boost local GDP growth by 1.65 to 1.72 percent and generate about 260,000 new jobs in Taiwan.

The ECFA will also help Taiwan's services industries expand their businesses.

Eyeing the ECFA taking effect, financial agencies from the mainland and Taiwan have stepped up cooperation.

Taiwan-based Taishin Financial Holdings signed on Sept. 9 a cooperation agreement with mainland-based Nanjing Zijin Investment Co. Prior to this, China Huarong Asset Management Corporation (CHAMC) and Taiwan-based SinoPac Holdings signed an agreement in Beijing on Sept. 3 to begin new strategic cooperation.

In the mean time, the mainland-based Bank of China and Bank of Communications applied on Sept. 7 to set up representative offices in Taiwan.

Taiwan securities analysts have said the shares of companies which will benefit from the ECFA will help push up the benchmark Taiex Index.