In Government Circles: BOFT: Fostering Foreign Trade
The Bureau of Foreign Trade is responsible for setting trade policy, conducting trade negotiations with...
By Lin Mei-Chun
International trade is traditionally Taiwan's lifeblood, and the government agency responsible for overseeing its development is the Bureau of Foreign Trade (BOFT) under the Ministry of Economic Affairs (MOEA). The BOFT -- known in English as the Board of Foreign Trade until May this year, when it was renamed as part of a drive to standardize governmental terminology -- was established in 1969 at the start of Taiwan's export-driven economic take-off. Over the subsequent decades, Taiwan rose to become a trading power -- it is now the 15th largest trading nation in the world -- and computers, semiconductors, and optoelectronics replaced bananas, canned mushrooms, and plastic shoes as leading export items
During that time, BOFT has undergone many changes in its organizational structure to adapt to changes in the world's trading and economic environment. The only thing that has remained unchanged is the agency's commitment to "provide the most satisfactory service," says director-general Huang Chih-peng, who took office last October after serving as secretary general of the China External Trade Development Council (CETRA), Taiwan's semi-official trade-promotion body.
BOFT acts as a source of information and assistance to foreign enterprises interested in doing business with Taiwan. "We're like a window to Taiwan, which is opened for foreign manufacturers and buyers. Our mission is to pass information to them and direct them to the right route to reach the destinations they desire," says Huang. "The ultimate goal is to encourage foreign businesses to think about Taiwan when they think about trade, to think about BOFT when they think about Taiwan, and to think about good service when they think about BOFT."
Of the BOFT staff of 590 personnel, 147 commercial officers are assigned to the 63 overseas offices operated by MOEA. Whether serving at home or abroad, the staff is involved in implementing trade liberalization and facilitation, strengthening trade promotion activities, and building bilateral and multinational economic and trade relationships. To achieve these goals, the bureau formulates trade policies and regulations; participates in the activities of international trade and economic organizations; handles trade negotiations, consultations, and disputes, and promotes and arranges free trade agreements (FTAs) with other countries.
CETRA, founded in 1970, works as an extension of BOFT. In its semi-official capacity, it enjoys more flexibility in the international arena than does a government agency such as BOFT. Their division of labor is clear. Whereas BOFT formulates Taiwan's trade policies and administers import/export affairs, CETRA directly assists private enterprises -- both Taiwan companies in bolstering their competitiveness in international markets and foreign businesses in establishing an effective marketing presence in Taiwan.
Over the past few decades, the BOFT has frequently adjusted its role in line with changes in the international trading environment. At the time of its founding, Taiwan was still at an early stage of economic development, and its policy priorities were to conserve its scarce foreign exchange reserves and strengthen exports. Imported goods faced high tariffs and a strict licensing system. During that era, the bureau's main task was trade regulation.
By the 1980s, years of trade surpluses had brought abundant foreign exchange reserves, and the global trend of trade liberalization was confronting Taiwan with pressure to ease trade restrictions and open up its domestic market. The need for diversification had also become increasingly apparent, as sales to the United States reached as high as 48% of total exports in 1984. In response, Taiwan cut tariffs to liberalize imports, while also cultivating new export markets to reduce excessive dependence on any one destination for its goods.
In the 1990s the international trade environment underwent further drastic changes, as competition arose from developing countries that could offer much lower prices for many products. The emergence of China, with its cheap labor and abundant resources, particularly squeezed Taiwan's position in the world market. The government's economic policy then shifted focus to promote the adoption of more advanced technology, improved quality, and more sophisticated marketing strategies to increase the competitiveness of Taiwan's products.
Another important mission since the 1990s has been to step up trade-related activities designed to raise Taiwan's international visibility. These tasks have included participation in international economic and trade organizations such as World Trade Organization (WTO) and the Asia Pacific Economic Cooperation forum (APEC), and the enhancement of bilateral trade relations through the signing of FTAs. Taiwan is currently actively exploring the idea of signing FTAs with such countries as the United States, Japan, Panama, Singapore, and New Zealand. The negotiations with Panama have made the most progress, with the agreement scheduled to be signed on August 21. FTA negotiations with the United States will need to wait until Washington is satisfied that Taiwan has fulfilled all of its existing commitments under WTO.
Trade grievances often run two ways, however, and BOFT has also taken action under the WTO framework when it believes that Taiwan's interests have been treated unfairly. As an example, Taiwan complained about 30% tariffs that the United States imposed on various steel products last year under Section 201 of the U.S. Trade Act. In May this year, WTO's Dispute Settlement Panel handed down a verdict in Taiwan's favor.
Currently, the bureau is working on a "Global Export Promotion Plan," to be carried out from the beginning this year through the end of 2005. The plan aims to help diversify Taiwan's export market away from over-dependence on the three major markets of China (now Taiwan's largest export destination), the United States, and Japan. BOFT will seek to promote more trade with Central and Eastern Europe, South and Central Asia, Latin America, and Korea. Measures include forming trade delegations to visit targeted countries, participating in their trade shows, and gathering their procurement information. The overseas trade officers will also step up efforts to encourage manufacturers in their host countries to attend trade shows in Taiwan.
Other new programs are the "Upgrading Product Image Project" to assist the private sector to explore new markets and the "International Trade and Economic Professional Training Program" for cultivating human resources. In addition, the "Taiwantrade" website -- ww.taiwantrade.com.tw -- was launched as a portal of portals for linking to global trade information networks.
One of the most important tasks of BOFT is to conduct negotiation with trading partners. Among these, talks with the Office of the U.S. Trade Representative are considered the most crucial, since the United States remains Taiwan's largest overall trading partner.
The goal of Taiwan-U.S. bilateral trade negotiations is to seek a mutually acceptable model consistent with relevant international practices and the regulations of each country. Under the WTO umbrella, the U.S. government is currently pressing Taiwan to show faster improvements regarding protection of intellectual property rights, and to open its market further to agricultural products, pharmaceuticals, telecommunications, and financial services. During the negotiation process, BOFT officials try to iron out misunderstandings and find "win-win" solutions.
Although Taiwan may go into trade talks with less diplomatic clout behind it, "the weaker country has to appeal to its counterpart with knowledge, reason, and a positive attitude," says Huang Chih-peng. "Once the agreement is made, the most important thing is how to make good on the promises."
The 53-year-old director general holds a master's degree in business administration from Georgetown University. A more than 20-year veteran of MOEA, Huang has had abundant experience in a variety of aspects of economic affairs, having served in the ministry's Industrial Development and Investment Center and Industrial Development Bureau, in addition to CETRA.
At the helm at BOFT, Huang follows in the footsteps of such illustrious predecessors as former premier Vincent Siew and Legislative Yuan Vice President Chiang Pin-kung. The position has proven to be a good place to cultivate talent because it combines exposure to two crucial fields -- economic affairs and international relations.
