Gareth Thomas, UK minister for Trade, Investment and Consumer Affairs, visited Taiwan from Jan. 14 to Jan. 16 as part of a regional visit that included Singapore, Vietnam and Malaysia for bilateral trade talks. During an interview with Taipei Times staff reporter Elizabeth Tchii, Thomas shared his observation and thoughts about reducing regulations to improve market access for Taiwanese and British firms
Taipei Times (TT): You are the first UK minister to visit Taiwan in six years. How important is this trip?
Gareth Thomas (GT): This is a sign of the renewed importance of the Taiwanese market for British business. Taiwan is potentially a country that offers huge new opportunities for British business, particularly in manufacturing and also in infrastructure. There’s already a strong services market here for British business, and we were very pleased that just before Christmas, Taiwan announced its decision to follow a GPA [Government Procurement Agreement] accession process formally getting underway within the next month or so.
PHOTO: ELIZABETH TCHII, TAIPEI TIMES
TT: What issues did you bring up with Taiwanese officials?
GT: We raised in the talks a series of other issues on some of the difficulties businesses face in setting up in Taiwan. Infrastructure businesses that have to take on a whole series of people before they can win on contracts here. We also discussed the potential benefits of trade enhancement measures between Taiwan and the EU.
The results that I received from the visit are threefold. One, getting the Taiwanese to accept the need to join in the GPA was a huge win for the international business community, and without a doubt it is definitely in Taiwan’s interest as well.
[Second,] there will be better rules to allow international businesses to compete on more equal terms with local businesses. The time given to businesses to put in bids for key tenders will be increased to help international businesses put in contracts.
The third area was the work that has been done on the potential benefits of trade enhancements between the EU and Taiwan. I was very struck by the message from officials here that potentially there is up to 20 billion euros (US$26 billion) worth of business for Europe as a result of trade enhancement measures, and potentially 12 billion euros in extra business for Taiwan. So trade enhancement measures present a [win-win situation]. And we will make sure there’s a conversation that takes place in Brussels and London about that.
TT: With two-way trade of about NT$200 billion (US$6 billion) annually between Taiwan and the UK, and UK businesses looking to Southeast Asia for wide-ranging opportunities in many sectors, can you describe to us the current economic situation in the UK and Europe?
GT: The UK and Europe are facing a difficult period in the short-term. Our sense is the fundamentals of UK are still strong. Until just recently we had 60 quarters of positive growth, record employment and historical low levels of inflation; our interest rates have been low.
One of the reasons to come to Taiwan and other countries is because we see the way out of the difficulties we’re in is to encourage businesses to export. The Asian markets have been high growth markets in the last couple of years. While growth levels next year will be less, they still represent very good places for British companies to do business.
I was struck by my meetings with British companies in Singapore and Taiwan. They have indicated the strong will to stay here for the long-term, and they want to do more business in Taiwan and in Singapore. They are not pulling out. Essentially I want to get the message out to small and medium-sized enterprises back in the UK who have not thought about exporting to Asia that there are many opportunities in Asia. Now is not the time to be retrenching.
TT: What are some of the trade issues coming up this year?
GT: There could be an increase in the drive or appetite in some areas to increase tariffs and decrease subsidies. No question in our mind: That would be the wrong approach. Despite the difficulties, you’re better off sticking with open markets.
We plan to put the Doha world trade talks back on track. We will use the G20 site in April in London to try and do that.
We also want to make sure that international trade talks get back on track and we also want to give a new impetus to free trade agreement discussions with a number of countries in Asia. We’re also interested in trade enhancement measures with Taiwan on the same basis.
TT: When is the UK going to adopt the euro?
GT: No idea. Every country in Europe has got to make its own decisions about whether to join the euro. What is striking is that there were many naysayers in the UK who said that the euro wouldn’t work.
I think there has been a tremendous success story for those countries who’ve [adopted] the euro. But if your economy is of a slightly different nature than others, it’s right that you stay out. W made a decision to stay out, and we review [the issue] on a regular basis. Just because we are having a more difficult time in the moment, I don’t see a specific case for joining the euro at this stage. [But] there is not an ideological reason we can’t and shouldn’t join the euro.
TT: What do you think of Taiwan’s consumer voucher program and what is the UK doing domestically to stimulate consumer spending?
GT: It was very interesting to hear about that measure from Taiwanese officials. We have done some slightly different things. We have cut tax on goods by 2.5 percent as a way of making goods cheaper for British consumers.
Also we try to encourage lending by British banks to small and mid-sized businesses, such as offering a loan guarantee worth up to £$20 billion (US$29 billion) to help keep credit flowing.
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