ROC President Ma Ying-jeou said July 3 that the recently concluded Cross-Strait Trade in Services Agreement is key to economic development, and the government will conduct a series of forums to communicate with services operators for better understanding of the benefits of the pact.
“Very few Asian countries signed free trade agreements in 2000, but the number has grown to more than 100 as of today,” Ma said. “Trade volumes among Asian nations have surpassed those with other continents, proof that Asia is becoming the engine for world economic growth.”
The president made the remarks during a forum in Taichung City on business opportunities under the pact, which was staged by the General Chamber of Commerce of the ROC, Taiwan External Trade Development Council (TAITRA) and industry organizations.
Ma said the pact—an extension of the Cross-Straits Economic Cooperation Framework Agreement (ECFA)—will see Taiwan and mainland China respectively open 64 and 80 investment categories to each other.
“A total of 27 of the 64 items were opened after the signing of ECFA and there has been no significant impact on these industries,” he said. “Given that only 37 are newly opened categories, there is no doubt the pact is a great opportunity for Taiwan business operators to tap the mainland Chinese market.”
One example would be the Chinese medicine wholesale sector, Ma said. The industry was opened in 2009 and over the past five years, only four mainland Chinese operators applied to set up shop in Taiwan, with one of the two approved by the Ministry of Economic Affairs conducting business.
As to the beauty and hair salon industry, Ma said the strength of Taiwan firms is undeniable. Beauty salon operator Natural Beauty operates 1,173 stores in mainland China, and hair salon chain Mentor runs 39 in mainland China and 550 in the rest of the world, he added.
Ma said there is a minimum US$200,000 investment threshold and MOEA review mechanism for any mainland Chinese operators wishing to carry out investment in related business in Taiwan.
The president responded to media reports claiming the pact would allow millions of mainland Chinese labors to work in Taiwan, clarifying that the government would only open Taiwan to mainland Chinese managerial staff.
As of May, mainland Chinese-invested companies hired 216 managers and technical personnel from across the strait compared to 6,671 local employees, Ma said, adding that this proves the companies are not taking employment from local workers but creating more jobs.
“For business, industries and workers that might be affected by trade liberalization, the government has devised related response measures to help them adjust to increasing competition or pursue business transformation.
“We have prepared offense-defense plans to help local business operators. The government is obligated to make the pact crystal clear to them and beef up efforts to ease its implementation because it is of great significance for the local service industry to be able to develop in mainland China.”
The pact is also paramount to Taiwan’s integration to global economy, Ma said, adding that this is part of his building blocks approach for the country to join trade blocs such as the Trans-Pacific Partnership and Regional Comprehensive Economic Partnership.
“We are close to signing economic cooperation agreements with Singapore and New Zealand in the near future, which would create favorable conditions for Taiwan to join these regional trade pacts.”
Also, given that the world now has its eye on this pact, it would negatively impact Taiwan’s credibility if it fails to pass through administrative process, he added.
Separately, the MOEA and Mainland Affairs Council each held forums, explaining the meaning of the services pact and opportunities it may bring to related industry operators. (RC-JSM)
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