In its 2009 Taiwan White Paper released today, the American Chamber of Commerce in Taipei commended Taiwan on several breakthrough achievements of the past year, but cautioned that Taiwan needs to do more to bolster its competitiveness during a time of unprecedented economic challenge.

Cited as breakthrough accomplishments were:

• The start of regular direct flights between Taiwan and China, as well as other steps to expand cross-Strait economic relations. The result will be to integrate Taiwan more closely into the regional and global economies (with the impact likely to be more evident after the recession ends).
• Taiwan’s accession to the Government Procurement Agreement (GPA) under the WTO, fulfilling the commitment it made in 2002.
• Legislative passage of the Internet Service Provider (ISP) bill, reinforcing Taiwan’s commitment to IPR protection and validating the U.S. decision earlier this year to remove Taiwan from the Special 301 Watch List.

AmCham also expressed appreciation that of the 101 priority issues covered in last year’s White Paper, a review of their status shows that 9 have been resolved (compared with only 4 each in 2007 and 2008). Another 20 items were identified as having made substantial progress – meaning that nearly 30% of last year’s issues have received positive treatment.

In the Overview section of the White Paper, the Chamber noted that Taiwan has been hit hard by the current worldwide economic crisis because of its heavy reliance on exports. It urged the Taiwan authorities to use this opportunity to undertake a serious self-examination of the economy’s strengths and weaknesses. One of the biggest problems, as raised is numerous international competitiveness surveys, is government inefficiencies. In fact, a number of AmCham’s industry committees report that their regulatory bodies often do more to obstruct business than to facilitate it. The regulatory process needs to be made more transparent, and to involve more effective consultation with industry. International practices should be adopted instead of inventing unique-to-Taiwan regulations. Retraining of civil servants to emphasize service mindedness would help improve the situation – and enable Taiwan to emerge from the recession in better shape to compete.

Several examples of frustrations were cited:

• In the telecom and media sector, little opportunity to engage in meaningful dialogue with commissioners of the National Communications Commission.
• For pharmaceutical and medical-device manufacturers, reimbursement prices from the National Health Insurance system that are among the lowest in the world – discouraging them from launching innovative products that would enhance Taiwan’s healthcare treatment,
• Legislative consideration of a credit-card interest-rate cap that would hurt, not help, low-income consumers and small businesses.
• Uncertainty, despite GPA membership, on how open the infrastructure market will be to international participation.

Further with regard to cross-Strait economic developments, AmCham welcomed the negotiation of trade agreements with China along the lines of the ECFA now being discussed. Without it, Taiwan products stand to be excluded from the China market as the regional trade bloc centered on ASEAN expands. The Chamber regards such an agreement as an economic necessity that should not be overly politicized.

Since Washington has long urged Taiwan to improve cross-Strait relations, the progress in that regard should also be good for U.S.-Taiwan ties. AmCham hopes to see economic connections between the two countries advanced through the scheduling of Trade and Investment Framework Agreement (TIFA) talks in the near future and by working toward the start of formal negotiations on a Bilateral Investment Agreement (BIA). The White Paper calls on both governments to expedite that process. On the Taiwan side, it encourages the government to remove a current irritant by lifting the ban on U.S. beef containing bone, since there is no scientific evidence of any consumer risk.

Following publication of the White Paper, AmCham will be sending a delegation to Washington, D.C. from June 15 to 19 for its annual Doorknock. On the group’s return, a series of meetings will be held with Taiwan government officials, both high-level and at the working level.

Established in 1951, AmCham is the oldest, largest, and most active foreign business organization in Taiwan. Its membership consists of around 900 individuals representing nearly 500 companies.

To download the Complete 2009 White Paper Issue at here: 2009 Taiwan White Paper Issue
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