ECCT CEO Guy Wittich said, the year 2002 has been a challenging one not only for Taiwan, but also for ECCT member companies doing business here. Membership was up with 50 new companies joining the ECCT. There has also been an increase in the number of activities, 50 percent more committee meetings this year. ECCT has 21 industry and support committees covering a wide range of issues including in automotive, insurance, travel and tourism, retail, food and beverage sectors, IPR, human resources, government procurement, support to members in getting issues addressed, etc...
One of the major issues that the ECCT undertakes is a "WTO Monitoring Project." It sees to it that Taiwan complies with WTO commitments and create an open, fair and competitive business environment. These include the lifting the ban on the import of goods from China.
ECCT urges the Taiwan government to comply with its WTO obligations and allow local and foreign manufacturers to import goods and raw materials without restrictions from the mainland. Imports of over 2,800 products remain prohibited, which adversely affects the business development of a number of ECCT member companies, said Wittich.
Wittich remarked, "ECCT's major goal is to help members defend their business interests." 50 product categories from China of great interest to ECCT members such as electronics, car parts have been forwarded to the Taiwan government and it hopes at least 14 of these items will be lifted before the end of the year.
Another area is simplifying application and import procedures. Foreign businesses are hampered in their operations due to complex application procedures in a wide range of matters, and often have to deal with multiple levels of government with conflicting application requirements. Clarity, transparency, consistency and impartiality are needed in the areas of product certification, manufacturing validation, customs clearance, and work permits.
The current regulatory environment in the product certification process, for example, makes market entry for new foreign products a long and cumbersome process, and unfairly puts foreign companies at a competitive disadvantage.
ECCT also hopes that Taiwan will open up the market for foreign contractors in public procurement projects. Many major European engineering, construction, and consulting firms have been excluded for many years from participating in Taiwan's infrastructure projects and have therefore eagerly awaited Taiwan's entry into the WTO.
Taiwan is not yet a formal signatory to the Government Procurement Agreement under WTO, and the ECCT and its member companies argue strongly that Taiwan's infrastructure projects have been subject to higher prices and lower quality due to the exclusion of foreign firms. Continued exclusion will reflect poorly on Taiwan's commitments to WTO principles and compliance, whilst denying Taiwan the chance to choose from the best for its infrastructure projects. ECCT urges the government to lift these restrictions on foreign firms and to put serious effort into signing the GPA as soon as possible.
Further restructuring the financial services industry. ECCT acknowledges the government's significant and potentially far-reaching accomplishments in the past 12 months, its enactment of legislation and implementation of regulatory reforms that are visibly changing the structural framework of Taiwan's banking and broader financial industries. Beyond the bold reforms so far made, there are other tough decisions that need to be made in order to ensure a healthy and fully functional financial industry in Taiwan.
Implementing the reforms that create the framework for bank mergers and more efficient financial institutional structures is not enough -- with a few exceptions, the hoped-for consolidation has not yet taken place. Government must actively create the practical environment to achieve this desired consolidation.
Pursue practical policies for cross-strait economic development. Establishing direct trade, transportation, and communication links with China will facilitate the movement of goods, services, and human resources across the Strait. This will not only increase Taiwan's attractiveness as a regional logistics center, but also will substantially increase the efficiency of domestic and foreign companies operating on both sides of the Strait. For example, it will reduce the costs and time linked to cross-strait business travel, estimated to be over two million trips per year, by 50 percent or more.
ECCT recognizes the complex political aspects of the issue, and fully supports the government's recent efforts to come up with more creative solutions, but urges a practical solution as soon as possible.
Further lifting restrictions on the flow of human resources between Taiwan and China will make Taiwan more attractive as a site for Greater China headquarters. Significant progress has been made with the implementation of the government's eased measures concerning entry of mainland employees of foreign multinationals.
The ECCT has provided suggestions for a practical implementation of this initiative, and would appreciate further involvement in finalizing an effective and practical plan as quickly as possible.
The ECCT also calls on Taiwan to build trust and confidence in the regulatory environment and effectively protect intellectual property rights. Taiwan has made progress in revising its laws and in prosecuting intellectual property rights violations.
However, the ECCT, in line with both the major foreign and domestic players, feels that Taiwan's enforcement environment does not meet WTO standards which require "effective action" against infringers. Delay, impractical documentary formalities, lax enforcement, continuing widespread visibility of piracy and the export of pirated goods remain concerns.
Taiwan must further develop a transparent, consistent and non-ambiguous regulatory environment. ECCT member companies are affected in their business operations by inconsistent and ambiguous regulations governing their business operations. One example is the complex regulations on land use and re-zoning for retail businesses, which has negatively affected foreign investors' decisions as to whether to set up operations in Taiwan.
Another is Taiwan's power of attorney rules, which often force the legal representatives of a foreign company to go to extraordinary lengths to prove that they are empowered to act in a company's interest. Such rules are disincentives to investors. In logistics, Taiwan removed its cap on foreign ownership in air cargo forwarding. Foreign industry heads were involved in the discussions in leading up to this decision. Pharmaceuticals: A new law on overseas manufacturing validation was promulgated, and ECCT is now in close dialogue with the Bureau of Pharmaceutical Affairs as how to practically implement it.
ECCT also recommends steps to further eradicate corruption. ECCT encourages the government's efforts to crack down on "black gold" politics and notes that last year's Legislative Yuan elections were held in an atmosphere of fairness. It urges the government to continue to eliminate corruption at all levels of the bureaucracy. Corruption is another disincentive to foreign investment.
Open Door Mission
ECCT Chairman Hugh Inman in his annual report said, ECCT's eighth Open Door Mission to Brussels which took place Nov 20 to 22 was very successful. The 12 ECCT delegates included ECCT board directors, committee chairs and members representing some of Europe's key industries. They met with 21 European Commission representatives, including Trade Commissioner Pascal Lamy, as well as with Taiwan's key government representatives in Europe, including Yen Ching-chang, permanent representative to WTO, and David Lee, the Taipei Representative in Belgium.
ECCT members have great interest in a strong Taiwan economy and further development of trade and commerce between Europe and Taiwan -- after all, Europe is its third largest trading partner.
Significant progress has already been made by the government in dealing with many of these issues. ECCT encourages the government to continue on its path of economic reform in the best interests of both the domestic industries and the European business community in Taiwan.
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