Task force working to push trade with Southeast Asia

The Cabinet is drafting a proposal to encourage trade and investment in Southeast Asia as an antidote to the rising business migration and capital outflow to China, the Chinese-language media reported yesterday.

Premier Yu Shyi-kun attended a briefing yesterday on promoting economic relations with Southeast Asia.

The briefing was the first meeting of a task force organized by the Cabinet to plan the implementation of its "go south" policy.

The task force is headed by Vice Premier Lin Hsin-yi (林信義).

The meeting focused on the status of the task force, issues of inter-ministry communication and work procedures.

A decision was made to invite the National Security Council to participate in the strategic planning effort.

The Chinese-language media reported yesterday that Taiwan plans to seek bilateral trade negotiations with Vietnam, Cambodia, Laos and possibly Myanmar within the WTO entry framework.

None of the four countries are WTO members and therefore they will be required to hold bilateral trade talks with member states to gain admission to the trade organization.

The government also plans to prioritize the promotion of investment protection agreements and double-taxation waivers with the countries, the report said.

Taiwan will seek to expand its Southeast Asia markets through participation in ASEAN's trade policy review mechanism, the report said.

The Executive Yuan also plans to provide export loans and financing to firms exporting products to Southeast Asia, the report said. Funding will come from the Cabinet's Development Fund and the credit-guarantee fund for small and medium-sized enterprises and will be provided through commercial banks.

The export financing ceiling will also be raised from NT$60 million to NT$80 million per firm, the report said.

The Cabinet plan also focuses on helping banks set up off-shore units in Southeast Asia, pushing for liberalization of the banking sector in some Southeast Asia countries and helping local banks gain market access, the report said.

In the textiles sector, the government wants to help firms take advantage of the preferential tariffs that Southeast Asia enjoys in the textile industry in order to increase market share in exports to the US and Europe.

The proposal also includes government assistance and supervision for schools in South-east Asia for the children of businesspeople working in the region.

According to the report, the legal basis for such assistance will be provided in the Private School Law (私立學校法) and a proposed overseas citizens education law.

Another set of regulations will also be enacted to make it easier for graduates of such overseas schools to return to Taiwan for higher education.

The government has been pushing for investments in Southeast Asia since former president Lee Teng-hui (李登輝)'s administration, but has found it very difficult to counter the lures of the China market.

Taiwan is also facing difficulties in its effort to sign free-trade agreements with ASEAN members because of pressure from Beijing.