Taiwan and Vietnam are negotiating a new bilateral investment agreement (BIA) aimed at protecting Vietnam-based Taiwanese companies, including those registered with the local government, but that do business worldwide, a government official said yesterday.
However, because it remains unclear when the negotiations can be concluded, only Taiwanese companies doing business in Vietnam can ask for compensation from the Vietnamese government under the existing BIA for losses resulting from recent anti-China riots, Vice Minister of Economic Affairs Woody Duh (杜紫軍) said.
“We hope the Vietnamese government can also recognize Taiwanese companies that registered as businesses in Vietnam, but trade internationally, so they can be protected under the Taiwan-Vietnam BIA,” Duh told the legislature’s Economics Committee.
Earlier last week, violence broke out across Vietnam as local residents demonstrated against China’s deployment of an oil rig in waters claimed by the country. Taiwanese firms, such as Cheng Shin Rubber Industry Co (正新橡膠) and Formosa Plastics Group (台塑集團), also suffered from the attacks.
Chinese Nationalist Party (KMT) legislators Huang Chao-shun (黃昭順) and Lee Ching-hua (李慶華) demanded that the government act aggressively to protect Vietnam-based Taiwanese companies. They even suggested the Ministry of Economic Affairs persuade the attacked firms to move back to Taiwan.
In response, Duh said the current version of Taiwan-Vietnam BIA, which was signed in 1993, ensures governments compensate foreign companies through tax exemptions, low interest rate loans and delayed mortgage payments.
The two countries started talks about overhauling the BIA more than a year ago because the treaty was found to be flawed in comparison with BIAs of other countries that guarantee protection of offshore businesses, as well as government-to-government compensation, Duh said. While the ministry is revamping the BIA with its Vietnamese counterpart, Taiwanese businesses should collect evidence of attacks by Vietnamese protesters against their properties for future compensation applications, he added.
As of Sunday, 224 Taiwanese companies’ plants were reported to have been damaged during the riots, with 18 firebombed and five completely destroyed, according to ministry statistics.
About 1,100 Taiwanese companies have not yet resumed their operations due to security concerns, with most from the shoe, clothing, furniture, bicycle and electronics manufacturing industries, the ministry said.
Vice Minister of Economic Affairs Shen Jong-chin (沈榮津) is to lead a task force on a trip to Vietnam tomorrow.
Duh said the ministry will conclude assessing the losses to Taiwanese firms by Friday, when Shen is scheduled to meet Vietnamese government officials.