President Ma Ying-jeou visited Taichung City on the afternoon of July 3 to attend a forum on business opportunities that will be created by the Cross-Strait Trade in Services Agreement, an extension of the Cross-Straits Economic Cooperation Framework Agreement (ECFA) signed in June 2010. The forum was organized by the General Chamber of Commerce of the ROC (ROCCOC), the Taiwan External Trade Development Council, and related trade associations. In addition to reiterating the benefits of the ECFA since it went into effect, President Ma also emphasized the importance of the Cross-Strait Trade in Services Agreement to Taiwan's economic development. He expressed hope that similar conferences of this type will be arranged and that the details of the agreement will be fully explained to related industries, thereby clearing up any misconceptions about the pact. The president stated that this would help the public clearly understand the agreement as well as the benefits that it will bring.
In remarks prior to the commencement of the forum, President Ma noted that in 2000 only a smattering of free trade agreements had been signed in Asia, but today over 100 such agreements exist. He added that the volume of trade among Asian nations long ago surpassed the amount of trade between Asia and other continents, which proves that Asia is becoming the engine of global economic growth. The president said it is regrettable, however, that prior to his taking office in 2008, the previous administration had not signed free trade agreements with any of the ROC's major trading partners. To overcome this predicament, he said, Taiwan signed the ECFA with mainland China three years ago, and most recently the two sides have signed the Cross-Strait Trade in Services Agreement, which is an extension of the ECFA. Based on this accord, the president explained, mainland China will open its market in 80 different service industries to companies from Taiwan, while Taiwan will open its doors to investment in 64 service industries. The president said that 27 of the service industries covered in the agreement were already opened under the ECFA, and to this date the impact here has been limited. Only another 37 industries will be opened to investment to mainland Chinese firms and investors under the latest pact. Overall, he said, this agreement affords an outstanding opportunity for Taiwan to expand into the mainland Chinese market.
President Ma pointed out that the government has adopted a Program to Assist Industry Adjust to Trade Liberalization to provide assistance and services to industries, enterprises, and laborers impacted by trade liberalization so they can make the necessary adjustments, and to provide financial relief for losses suffered as a result. The ultimate goal of this mechanism, he said, is to enhance the competitiveness of Taiwan's industries and support their transition. President Ma remarked that the government is trying to provide the greatest opportunities to companies and industries, while also mitigating the downside risks of such accords. He added that the government has an obligation to clearly explain this agreement, and stated that there will be appropriate efforts to make Taiwan more competitive. The president said it is important that the service industry have an opportunity to develop in mainland China.
The forum started with a briefing on the Cross-Strait Trade in Services Agreement from Chang Chun-Fu (張俊福), Director General of the Bureau of Foreign Trade at the Ministry of Economic Affairs (MOEA). Chung-Hua Institution for Economic Research Vice President Wang Jiann-Chyuan (王健全) then presided over the forum, inviting representatives from Taiwan's e-commerce, printing services, financial services, cultural and creative, and tourism (transportation) industries to express their viewpoints on the agreement. After their remarks, the floor was opened to allow forum participants a chance to ask questions of government officials and experts. President Ma, in his concluding remarks, stressed that the success or failure of the effort to get the Cross-Strait Trade in Services Agreement ratified by the Legislative Yuan will affect not just the development of cross-strait trade, but also Taiwan's ability to expand its presence in the global economy. He stated that the whole world is watching this matter closely, and failure by the Legislative Yuan to ratify the agreement would hurt Taiwan's reputation.
The president then addressed criticisms of the agreement with regard to specific industries, such as taxi cabs, the retailing of Chinese herbal medicines, and the printing & publishing industry. President Ma clarified that the government is opening Taiwan to the car rental industry, the Chinese herbal medicine wholesaling industry, and the printing industry, which are not the same as those that others have expressed concerns about. The Chinese herbal medicine wholesaling industry, for example, was actually opened up back in 2009 and over the past five years only four mainland Chinese enterprises have filed applications to do business here. Two of the applications were approved by the MOEA's Investment Commission, and to this point only one of those companies has actually commenced operations here, he said, so opening this sector has not had any impact. President Ma added that news reports suggesting that Taiwan will allow TONG REN TANG, a chain of traditional Chinese herbal medicine stores in mainland China, to retail Chinese herbal medicine here are inaccurate.
As for opening Taiwan's doors to beauty salon operators from mainland China, President Ma stressed that Taiwan already has a strong beauty salon industry. Taiwanese firms such as Mentor Hair Stylist and Natural Beauty have already had a presence in mainland China for many years, he said, pointing out that Natural Beauty has opened 1,173 outlets there, while Mentor Hair Stylist has 39 outlets in the mainland and 550 worldwide. In addition, the president noted, mainland Chinese beauty salon operators seeking to invest in Taiwan must invest at least US$200,000 and obtain MOEA approval. President Ma emphasized that the public here needn't fear the competition brought about by mainland Chinese investment in Taiwan.
With respect to articles citing concern among scholars that several million mainland Chinese laborers are going to flood the Taiwan market, President Ma clarified, the government has absolutely no intention to open Taiwan to mainland Chinese laborers, but will only allow managerial-level personnel to come to Taiwan. As of the end of May this year, the president noted, only 216 managers or skilled technicians from mainland Chinese enterprises had been allowed to come to Taiwan, but their firms employ 6,671 Taiwanese workers. This indicates that allowing mainland Chinese investment into Taiwan not only does not take away job opportunities from locals, but rather creates even more employment opportunities here, the president said.
President Ma mentioned that in 2010, investments in Taiwan by foreigners and overseas compatriots totaled US$3.81 billion. This number rose to US$4.96 billion in 2011 and to US$5.56 billion in 2012, up 45.8% from 2010. This means that the signing of the ECFA with mainland China has indeed attracted foreign investment, he said. In addition, the percentage of Taiwan's exports to mainland China as a portion of total exports fell from 41.8% in 2010 to 39.4% in 2012 thanks to strong growth in Taiwan's exports to ASEAN nations, he commented, adding that this shows Taiwan is gradually diversifying its export markets.
President Ma stressed that to prevent Taiwan's marginalization in the course of international economic integration, the government is working to improve its relationship with mainland China, and the signing of the Cross-Strait Trade in Services Agreement is one step toward that goal. Moreover, the president said, Taiwan will continue to negotiate a trade in goods agreement with the mainland in order to bring the ECFA into full play. This will further liberalize Taiwan's trade and bolster Taiwan's bid to join the Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership, he noted. President Ma stated that Taiwan expects in the near future to sign economic cooperation agreements with Singapore and New Zealand, which will help Taiwan to take part in similar regional trade pacts.
Among those attending the activities were Deputy Secretary-General to the President Hsiung Kuang-hua (熊光華), Vice Minister of Economic Affairs Shih-Chao Cho (卓士昭), Vice Minister Wang Cheng-teng (王政騰) of the Council of Agriculture, Director-General Joe Ming-hsien Lai (賴銘賢) of the Financial Supervisory Commission's Department of International Affairs, Deputy Director Yeh Kai-ping (葉凱萍) of the Mainland Affairs Council's Economic Affairs Department, and ROCCOC Chairman Chang Pen-Tsao (張平沼).