AmCham Taipei 2015 White Paper Press Conference

Find it online at: www.amcham.com.tw

“Taiwan and the TPP: the Time is Now”

Thomas FannChairman

American Chamber of Commerce in Taipei

June 4, 2015

The 2015 Taiwan White Paper

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Industry Sector Issues

Position papers from 22 Committees,plus 2 papers from non-Committee member groups (Chiropractic, Tobacco).

A total of 77 separate Issues

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White Paper’s Chief Components

1. Foreword and status review2. Overview: Overall Assessment of

Taiwan’s Current Business Environment

3. Messages to the U.S. Government 4. Sector-specific Position Papers

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Foreword

Progress on 2014 WP issues:

3 Issues “Resolved”: Conclusive action taken, no longer a problem.

15 issues “Showing Good Progress” Together those two categories equal 22% of the total – the second highest proportion in the past five years.

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Items Resolved

Infrastructure: Awarding turnkey public contracts by two-stage “selective tendering.”

Insurance:Enabling brokers to also do reinsurance brokering under the same contract.

Telecommunications & Media: Effective introduction of 4G mobile service.

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Committees with Issues showing Good Progress

• Asset Management• Banking• Chemical

Manufacturers• Customs &

International Trade• Human Resources• Manufacturing

• Pharmaceutical• Retail• Technology• Telecommunication

& Media• Travel & Tourism

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Main Themes

• Preparation for a second-round TPP candidacy needs to start now.

• Bring regulatory regime in line with accepted international norms and practices.

• Adopt measures to enhance transparency.• Create high-level task force to promote TPP. • Attend to power, water, and HR issues.

Overview:

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Coming Down to the Wire

The Ma administration has highlighted the critical importance for Taiwan of gaining admission into TPP in the second round. Taiwan’s trade-dependent economy otherwise risks becoming increasingly marginalized.

Taiwan and the TPP: the Time is Now

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The opposition DPP has also expressed its backing for TPP membership.

AmCham enthusiastically supports Taiwan’s plan to seek inclusion into the TPP.


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As the TPP could come into effect next year, Taiwan needs to take decisive action to establish its credibility as a proponent of trade liberalization.

Despite Taiwan’s prominence in as a trading economy, it cannot simply assume it will be welcomed into the TPP. No invitations will be issued. Would-be candidates must apply.


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Acceptance will require unanimous consent from all 12 initial TPP members, so Taiwan will first

need to resolve major outstanding trade disputes with all 12 countries.


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Adhering to Accepted Practices

Although Taiwan is an excellent place to do business, it still has some deficiencies in regulatory procedures. Correcting those shortcomings will be important for TPP accession, but even more so to strengthen the business climate and stimulate economic growth.


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Unique-to-Taiwan, often ultra-strict, rules and regulations impose heavy burdens, both for

multinational corporations and domestic exporters.


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These Taiwan-unique regulations may be well-intentioned but are cumbersome and difficult to enforce. They may also cause higher costs for consumers and lead to trade disputes.


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The committee position papers cite examples from such areas as: • medical device pricing

• definition of “patent” for preferential drug pricing

• recycling labeling

• regulations on e-commerce for financial services

• control of cosmetics advertising

• and the treatment of the healthcare profession of chiropractic.


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The Core Question: Transparency

Inadequate transparency is the root cause of many of the defects in Taiwan’s regulatory

system.


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• Important policy changes sometimes aren’t adequately communicated to the public

• The public-comment period often is too short.• Respondents generally receive no feedback.

• Public hearings often provide little chance for a full airing of concerns.

• A new rule is often already in force before the difficulties in actually enforcing it become apparent.


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Taiwan might study how transparency is fostered in the

United States through the Administrative Procedures Act (APA) and related laws and regulations.

Transparency is also a chapter in all recent FTAs negotiated by the U.S., and is expected to be covered in TPP as well.


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With sufficient discussion, potential problems in proposed new regulations can be discovered and

dealt with early in the process.


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Needed Institutions

The Premier should create a TPP Preparation Task Force to ensure that the individual ministries and agencies follow through properly to carry out reforms.

Besides monitoring Executive-branch progress, the task force would oversee communications with the public and the Legislative Yuan to build a sense of national mission behind the goal of TPP accession.


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Needed Institutions

The government will need to make the case that the country has

much to gain by participating in TPP, and much to lose from exclusion.


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Needed Institutions

The TPP Task Force should highlight the disadvantages Taiwan faces from being blocked from becoming party to important bilateral and multilateral FTAs.

The domestic business community could also organize a Coalition to promote TPP membership for the sake of Taiwan’s economic growth and employment.


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Needed Institutions

TPP is an opportunity to rebalance Taiwan’s trade and investment, reducing the heavy dependence on the China market (for both economic and strategic benefits).

It opens an alternative way to benefit from being part of a much larger market to expand trade and attract investment.


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Additional Concerns

Assuring a stable energy supply is crucial. Resource-poor

Taiwan has no ideal options in this regard. The best solution appears to be a combination of:

• Further energy conservation

• Use of a broad mix of power-generation technologies, including relicensing the existing nuclear plants.


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Additional Concerns

Taiwan also faces immense challenges in maintaining a consistently sufficient water supply. Tackling the problem should include:

• Pricing-policy adjustments

• Increased recycling

• Use of IT technology to lessen leakage.


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Additional Concerns

AmCham commends the government for taking steps to liberalize regulations to enable more foreign talent to

reside and be employed in Taiwan.

Vital questions impacting Taiwan’s future cannot wait. We urge both the ruling and opposition parties to ensure that the upcoming political season does not distract from efforts to make solid achievement for the benefit of the people of Taiwan.


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Messages to the U.S. Government

1. Hold the 2015 TIFA Council meeting in the coming months and in the future maintain a rigid annual schedule.

2. Support Taiwan’s eventual candidacy for TPP participation.

3. Continue to enhance the bilateral relationship, for example by sending high-level U.S. officials on regular visits.

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Questions?

Comments?Thank You for Attending

The 2015 White Paper is Available to download in English and Chinese at

www.amcham.com.tw

AmCham Taipei 2015 White Paper Press Conference

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