Former Vice President Vincent C. Siew (蕭萬長),
Chairman Thomas Fann of the American Chamber of Commerce in Taipei;
Acting Director Brent Christensen of AIT Taipei Office;
Secretary-General Timothy Chin-Tien Yang (楊進添) of the Presidential Office;
Secretary-General Jason C. Yuan (袁健生) of the National Security Council;
Minister of Foreign Affairs David Y. L. Lin (林永樂);
Distinguished members of the AmCham Taipei;
Ladies and gentlemen;
Good evening!
I. Opening Remarks
I would like to first of all thank AmCham Taipei for inviting me to this year's Hsieh Nien Fan.
For the past 63 years, AmCham has contributed to Taiwan's economic development in many ways. Each June, AmCham publishes its Taiwan White Paper to provide recommendations on economic issues. My government frequently turns to it when making policy decisions. AmCham also publishes a bilingual business monthly called Taiwan Business Topics, and I want to thank AmCham for re-printing the full text of my 2014 New Year's Day Address in this year's February issue without any charge.
II. The ROC's Current Foreign Policy
As you know, the geopolitical situation in East Asia has been in a state of constant flux since I took office in 2008. The situation in the Korean Peninsula has flared up again and again. The East China Sea has also become a flashpoint owing to increased friction between mainland China and Japan over the Diaoyutai Islands, as well as mainland China's establishment of the East China Sea Air Defense Identification Zone (ADIZ). Meanwhile, there are also some unresolved disputes in the South China Sea.
The resulting uncertainty has led us to believe that Taiwan's best course of action is to serve as a peacemaker and a humanitarian aid provider in the region.
As you know, cross-strait relations before 2008 were unstable at best. The mounting tension convinced me that improving cross-strait relations should be my top priority if I were elected president.
When I took office in 2008, we immediately resumed with mainland China negotiations, which were interrupted 10 years ago, on the basis of the "1992 Consensus" (九二共識). Many people joke that the "1992 Consensus," namely "one China, respective interpretations" (一中各表), is a masterpiece of ambiguity! Well, ambiguity or not, it is at least working. So it can be called a consensus with cross-strait characteristics. And I am delighted to say that the two sides so far have concluded 21 agreements. The number of mainland visitors to Taiwan has increased from 290,000 to 2.8 million, a jump of nearly 10 times, per year, and the number of mainland students has increased from 800 to 24,000. Direct scheduled flights, which were non-existent in 2008, have now shot up to 118 flights per day. With the help of the mainland authorities, we have also been able to jointly arrest nearly 6,000 criminal suspects who were beyond our reach in the past. And just last month in Nanjing, Chairman Wang Yu-Chi (王郁琦) of our Mainland Affairs Council officially met with his mainland counterpart, Minister Zhang Zhijun (張志軍) of the Taiwan Affairs Office. The meeting was the first of its kind between our two sides since 1949.
Taiwan is also serving as a peacemaker by applying the principles of the East China Sea Peace Initiative, which I proposed back in August 2012, shortly before Japan "nationalized" the Diaoyutai Islands. We signed a bilateral fisheries agreement with Japan in April last year, effectively resolving a fishing dispute that had dragged on for 40 years. While the number of fisheries incidents has gone down, the catch of tuna and other high-value species has gone up. This approach also brought about a peaceful resolution of the Guang Da Xing No. 28 fishing boat incident with the Philippines last May, when a Taiwan fisherman was shot dead by the Philippines coast guard. We were able to get an official apology and compensation from the Philippine government for the victim's family, a promise from them to prosecute the perpetrators, and a law enforcement agreement to prevent similar incidents from happening again.
The second key element of our foreign policy is to provide humanitarian aid. In January 2010, we sent a rescue team to Haiti and saved 9 people from the earthquake debris. We then followed up with US$15 million in relief materials, including 200 units of housing completed last year. And we began rebuilding the Supreme Court building there last year. In 2011, Taiwan donated 20 billion Japanese yen (US$200 million) to Japan after the March 2011 earthquake and tsunami exactly three years ago today, making us the single largest source of foreign donations. Taiwan's generosity touched the hearts of the Japanese people and helped strengthen the friendship between our two countries. Then, after Typhoon Haiyan left a trail of destruction in the central Philippines in November last year, killing over 6,000 people, the ROC government immediately dispatched military cargo planes and ships to carry relief materials to the devastated area. We were the first to arrive in Cebu city to deliver the supplies to the victims. The Philippine government publicly expressed its appreciation for Taiwan's help.
The third element of our strategy is maintaining strong Taiwan-US relations. Mutual trust between our two sides was left in tatters by the confrontational foreign policy of our previous administration. But since I took office, I have adopted a "viable diplomacy" (活路外交) policy and a low-key, surprise-free approach to rebuild high-level, mutual trust between Taipei and Washington.
Since 2008, the US has supplied Taiwan with defensive weapons and services worth a total of US$18.3 billion, the highest in 20 years.
Another aspect I want to mention is the expansion of our breathing space in the international community. The ROC Minister of Health has now attended the World Health Assembly for five consecutive years in a row, after an absence of 38 years. The head of our Civil Aviation Administration was invited to attend the 38th Assembly of the International Civil Aviation Organization (ICAO) last September, after an absence of 42 years. In both cases, the U.S. has been very helpful. President Obama even signed into law a bill supporting our meaningful participation in ICAO.
In addition, during the 2011 APEC Economic Leaders' Week, then US Secretary of State Hillary Clinton publicly described Taiwan as an important security and economic partner of the US. And the following year, Taiwan formally joined the US Visa Waiver Program, becoming the 37th country to have that status and the only country that does not have diplomatic relations with the U.S. Each year, more than 460,000 Taiwan visitors go to the U.S. They not only admire your culture and people, they are also very serious shoppers. They have contributed significantly to reducing the trade deficit the U.S. has with Taiwan. Next month our two countries will celebrate the 35th anniversary of the Taiwan Relations Act, which is the cornerstone of the relationship between us. This reminds me of an interesting experience I had 35 years ago when the diplomatic relations between our two countries were cut off. I was a doctoral candidate at Harvard Law School at the time. One day in the library I came across Professor Vagts, my thesis supervisor. He said to me: "Ying-jeou, I understand how you feel now. But I've got to tell you, Taiwan is the most recognized unrecognized country of the United States."
Well, what he said was quite true. In fact, the enactment of the Taiwan Relations Act, according to one American scholar, is actually the re-recognition of Taiwan after it was derecognized. What happened in the last 35 years has demonstrated exactly that.
Now, I would now like to talk about our economic policies.
III. Taiwan's Economic Policies
The global economy picked up in the second half of 2013. The International Monetary Fund projects global growth of about 3.7 percent in 2014, the highest in four years. For Taiwan, most forecasting institutions expect growth of over 3%.
I announced in my New Year's Day address that 2014 is the year for Taiwan to achieve an economic breakthrough. Economic and trade liberalization remains our most important task. As our economy depends heavily on investment and external trade, opening our doors to the world is the key to our economic growth. My strategy comprises three steps. The first is unilateral, the second is bilateral, and the third is multilateral.
First, let me say something about unilateral reform: we have to further liberalize and internationalize our own economy.
We have eased restrictions in more than 860 laws and regulations since I took office, but we also need to move faster to build our free economic pilot zones (FEPZs). We just launched eight FEPZs last August. The core idea behind these zones is to further liberalize and internationalize the economy, and to gradually expand the concept to the point where it covers all of our cities and counties, eventually turning Taiwan into a free economic island.
Next, we want to negotiate more free trade agreements (FTAs) with our major trading partners.
I'm sure that you in the audience are aware that the principal driving force behind global trade liberalization has shifted from the World Trade Organization (WTO) to regional and bilateral FTAs. Taiwan has been marginalized in the process of regional economic integration, primarily because our unique diplomatic situation made it impossible for us before 2008 to negotiate FTAs with our major trading partners with whom we have no diplomatic ties.
When I took office in 2008, I knew I had to move. And I had to move fast, otherwise Taiwan would be further marginalized at a time when almost all other countries in the Asia-Pacific region were making economic alliances with one another. So I decided in 2009 to break the isolation by first negotiating with mainland China, our No. 1 trading partner, on the Economic Cooperation Framework Agreement (ECFA). The Agreement was signed in 2010. In 2011, we signed an investment agreement with Japan, our No. 2 trading partner. In July of last year, we signed an Economic Cooperation Agreement with New Zealand, and in November we signed an Economic Partnership Agreement with Singapore, our No. 5 trading partner. We are working with other major trading partners in the region to negotiate more FTA-type agreements.
Third, we want to join the TPP and the RCEP.
In fact, there is broad consensus here in Taiwan about the need for us to join the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP). Our trade with the 12 members of the TPP in 2012 accounted for 34.4% of our total external trade, while our trade with the 16 members of the RCEP accounted for 57%. Therefore, we will pursue membership in both of them.
Because the TPP and the RCEP are high-quality FTAs, our preparations to join them will help address structural problems in our economy. The FTA-type agreements we have signed with mainland China, New Zealand, and Singapore will better prepare us for the tough negotiations to join the TPP and the RCEP.
In the meantime, we summoned back our representatives and economic attachés from 17 countries for consultations last month on what we need to be doing to join the TPP and RCEP. At the seminar, I set a July deadline for completion of the necessary preparatory work. I also asked former Vice President Vincent Siew, who is sitting in the audience, to set up a committee of business leaders to help communicate with the industrial community on the urgent need to take part in the process of regional economic integration. All of these efforts demonstrate our determination to achieve trade liberalization at home, sign more bilateral FTAs, and join the multilateral TPP and the RCEP.
The US plays a vital role in promoting the TPP, so its support is critical to our admission. In March of last year, following the resolution of a 5-year impasse over imports of American beef, by the way, which will be served this evening, we were able to resume talks under the 1994 Trade and Investment Framework Agreement (TIFA).
At the SelectUSA Investment Summit held last October in Washington, DC, the third largest foreign delegation was from Taiwan. And in November, former Vice President Siew led a group of high-level business CEOs from Taiwan to Washington, DC, New York, and San Francisco to explore new investment opportunities.
These positive developments have added new momentum to our bilateral economic relationship. I am very thankful to our many friends in the US who have publicly backed our bid to join the TPP. First of all, I want to thank AmCham Taipei and the US-Taiwan Business Council for cosigning letters to Trade Representative Michael Froman and Assistant Secretary of State Daniel Russel to express support for Taiwan's admission to the TPP. Moreover, several heavyweights in Congress have publicly endorsed our efforts, including Chairman Robert Menendez of the Senate Committee on Foreign Affairs and Chairman Ed Royce of the House of Representatives Committee on Foreign Affairs.
Although we still have some unresolved agricultural issues, our admission to the TPP can facilitate Taiwan's further economic liberalization. And I feel that both sides would agree that we should not let a single trade issue block the deepening of all the other aspects of our bilateral trade relationship.
IV. Concluding Remarks
Ladies and gentlemen, when I took office almost 6 years ago, I envisioned a prosperous Taiwan, peaceful cross-strait relations, and a friendly international environment. We have made noticeable progress on all three fronts. However, we are still behind our trading partners in certain aspects. We have to re-orient our efficiency-driven economy, and make it innovation-driven instead. We need to further liberalize and internationalize our economy by concluding more FTAs and joining regional economic integration.
The ROC government has always maintained a balanced approach to its international trade and investment relations. On the one hand, we have been seeking to expand trade with mainland China. On the other hand, we have also been working to conclude FTAs with other trading partners. And we also want to take part in the process of regional economic integration. We are committed to joining the TPP and the RCEP. But before that we have to get the Trade in Services Agreement (服貿協議) with mainland China through our legislature. Like the TPP and the RCEP, the Trade in Services Agreement will not only benefit Taiwan's economy, but also demonstrate our determination in trade liberalization and credibility in trade negotiations. So we will do our best to get it through as soon as possible, hopefully no later than the end of the current legislative session in June.
I thank you for your attention, and wish you all a very successful Year of the Horse. By the way, it so happens that the Chinese translation of your president's name—Obama—has a "Ma." Your AIT Director Christopher Marut also has a "Ma." And I myself, of course, has a "Ma." Horse is a symbol of energy and vigor. So the Year of the Horse should be a good one.
Thank you very much.