Taiwan and Japan have reached consensus on most of the content of an investment protection agreement and will sign the accord next month, the Sankei Shimbun reported on Saturday.
The pact will allow for greater freedom of bilateral economic exchanges than the one Japan has signed with China, the business daily said
One of the features of the new pact will be provisions governing compensation for investors in the event of expropriation and other investment protection measures. It will also include most favored nations treatment, national treatment and prohibition of the export performance requirement, the paper said.
The Japan-China investment agreement that took effect in 1989 does not contain provisions for national treatment or prohibition of export performance requirements, so the Taiwan-Japan pact would pave the way for greater liberalization of economic exchanges than the Japan-China agreement, it said.
The paper also said that while China is expected to offer better terms for Taiwanese investors under the cross-strait investment pact that is being negotiated, that pact was not likely to contain a “national treatment” clause.
If the cross-strait investment accord does end up offering preferential treatment for Taiwanese investors in China, Taiwanese-Japanese joint ventures would be able to enjoy such treatment if they launch investment projects there, the Sankei Shimbun said.
Japan’s Interchange Association and Taiwan’s Association of East Asian Relations are negotiating the pact on behalf of their governments, the paper said.
An investment pact will help foster a safer and more liberal investment climate for investors. The WTO has multilateral trade regulations, but they do not stipulate cross-border investment.
The newspaper said the Japanese government has sought bilateral agreements to better protect its investors in foreign countries and has signed pacts with 15 countries and regions so far, including Egypt, China and Cambodia.