AmCham 2013 White Paper: “Taiwan at a Crossroads”2013-06-07

Press Release

In the 2013 Taiwan White Paper published today, the American Chamber of Commerce in Taipei urges the Taiwan government to pick up the pace of economic reform and liberalization or risk falling too far behind its Asian competitors to catch up. Given the rapid progress being made by other countries in the region, the document notes, the coming year will be crucial in determining Taiwan’s economic future. Now well into his second term, President Ma Ying-jeou must take decisive actions in the next 12 months to establish his legacy, before being hampered by “lame duck” status.

With the right policy directions and content, Taiwan has the chance to sharpen its competitive advantages to achieve long-range prosperity, the White Paper states. It calls upon the Taiwan government to do more to facilitate domestic and foreign investment, assure a continued secure energy supply regardless of the outcome of the upcoming referendum on nuclear power, and begin a national campaign to mobilize broad public support for entry into the Trans-Pacific Partnership (TPP) trading bloc.

The White Paper welcomes the positive efforts of a number of government agencies during the past year, including the Financial Supervisory Commission for opening the Taiwan market to renminbi-denominated products and services, the National Communications Commission for preparing to auction spectrum for 4G mobile networks, and the MOEA and Legislative Yuan for the prompt drafting and enacting of legislation to criminalize the misappropriation of trade secrets. But it notes that the vision of the top government leadership for building an innovation-driven society intimately tied into the international economy is not always shared by the working-level bureaucracy.

A major theme of the White Paper is the need to strengthen Taiwan’s investment attractiveness. Despite scoring relatively well on international competitiveness surveys, Taiwan is strikingly underperforming as a location for foreign investment. At US$5.56 billion in 2012, the level of incoming FDI is extremely low compared with other economies in the region. South Korea, for example, drew US$16.3 billion in FDI last year. The White Paper therefore urges Taiwan to find convincing ways to stand out among alternative destinations as a prime location for business investment, and reaffirms that attracting greater investment is essential for Taiwan to reinvigorate its economy and provide more and better-paid jobs for its people.
AmCham expressed its satisfaction that the TIFA process with the United States has been resumed, and that preparations are underway to organize two working groups under TIFA – on investment issues and technical barriers to trade, respectively – to ensure steady progress on outstanding issues between the two sides. Hopefully, this mechanism will lead to resolution of a number of the White Paper issues raised by AmCham committees.

Both Taiwan and the U.S. must also actively explore ways to bring the depth and breadth of their
economic cooperation to a whole new level, the White Paper says. Participation in emerging regional trade blocs, notably the TPP, should be Taiwan’s overriding objective, so to maintain the competitiveness of Taiwan’s products and services and to avert the risk of commercial isolation. The Chamber recommends that President Ma appoint a high-level task force to oversee the necessary changes Taiwan will need to make to pave the way for TPP entry.

In the Messages to Washington section, the White Paper also recommends that the U.S. government work with the Taiwan authorities to build on the TIFA momentum, further deepening and broadening the bilateral economic relationship. In particular, the United States is urged to encourage and assist Taiwan’s participation in the TPP.

A “Doorknock” delegation will visit Washington in September to meet with U.S. government officials and explore ways to move the U.S.-Taiwan economic relationship forward.