Editorial

Missing pieces of the puzzle

(CNA photos)

• Publication Date：08/11/2012
• Source： Taiwan Today

The eighth round of talks between Taiwan’s Straits Exchange Foundation and its mainland Chinese counterpart, the Association for Relations Across the Taiwan Straits, wrapped up amid much fanfare Aug. 9 in Taipei City. Significant for the signing of two key agreements, the event is testament to the ROC government’s pragmatic cross-strait policy and ongoing efforts to improve Taipei-Beijing ties.

Led by Chiang Pin-kung and Chen Yunlin, respective SEF and ARATS chairmen, the delegations wasted no time in getting down to business. Final negotiations commenced Aug. 8 and the next day, both sides put pen to paper and concluded a pair of much-needed pacts that carry great significance in light of rapidly growing cross-strait economic exchanges and trade volume.

The long-awaited agreements on customs cooperation and investment protection will go some of the way toward eliminating bilateral trade barriers and spurring commercial activities across the strait. They also serve as a model for future negotiations under the Cross-Straits Economic Cooperation Framework Agreement (ECFA).

It is important to note that the pacts involve no further market accession to mainland Chinese businesses or regulatory easing on investment from the other side of the strait. They also ensure more transparency regarding the powers and responsibilities of related mainland Chinese agencies and that there will be no follow-up obstacles to implementation.

The jewel in the crown for Taiwan is the Cross-Strait Bilateral Investment Agreement, which establishes an institutionalized framework for protecting the commercial rights and interests of ROC nationals making direct and indirect investment in mainland China. It also safeguards their personal safety, stipulating that if they or their employees and dependents are detained, mainland Chinese authorities must notify family members in accordance with local laws.

Another distinctive feature of the pact is a systematic and diversified dispute settlement mechanism allowing parties to resolve their differences in an orderly fashion. With this sticking point now addressed, a larger number of investors are expected to ratchet up economic activity in mainland China.

First proposed by Taiwan in May 1995 during consultations before the second round of talks between then SEF Chairman Koo Chen-fu and his ARATS counterpart Wang Daohan, the pact has been on ice ever since due to cross-strait political issues. But these melted away after ROC President Ma Ying-jeou took office in May 2008, enabling Taipei and Beijing to shelve their differences and move forward for the common good.

Finalizing the customs cooperation and investment protection agreements makes good sense and further buoys investor sentiment on Taiwan’s robust business and regulatory environments. Once the pacts take effect following ROC legislative approval by year-end, two of the most important pieces of the cross-strait investment puzzle will be in place.

Write to Taiwan Today at ttonline@mofa.gov.tw