ECCT urges Taiwan to sign trade pact with China

ECCT Chairman Nicholas Winsor said at a press briefing Wednesday that he believes that the ECFA would help Taiwan to initiate negotiations for trade enhancement agreements (TEMs) with the European Union and Russia.

This view was supported by Godwin Chang, a member of the ECCT's board of directors and CEO of Societe Generale Coporate and Investment Banking's Taipei Branch, who said that more foreign banks would be willing to come to Taiwan if the government could offer them preferential treatment and if it signs the ECFA with China later this year.

Francine Wu, another board member and CEO of Schroders Investment Management Co., noted that the Closer Economic Partnership Arrangement that was signed between Hong Kong and China in 2005 lifted aban on international mutual fund proxy firms in Hong Kong wishing to sell their products in China, which in turn prompted such firms to offer higher pay to recruit Taiwanese professionals specializing in mutual fund proxy.

She said that after the ECFA is signed, the scope of Taiwan's mutual fund market will expand significantly.

The Cabinet removed Article 30 of a proposed bill to stimulate industrial innovation, which would have offered a preferential 15 percent corporate income tax rate to any of the world's 500 biggest companies that locate their headquarters in Taiwan.

Touching on the issue, the ETTC said that in addition to offering preferential tax treatment as a means of attracting investment, it is also quite important for the government to formulate complementary measures, such as improved labor policies to let in more foreign workers.

Other factors that would be taken into consideration by potential foreign investors include the level of transparency in government policy-making and the personal income tax system for professionals hired by foreign companies in Taiwan, said the ETTC.

The Taiwan government should also step up its efforts to publicize the various steps it is taking, apart from offering incentives, to attract foreign investment said Steffan Huber, an ECCT director and president of Bayer Taiwan Co., Ltd.

Taiwan and China signed a memorandum of understanding on cooperation in financial supervision late last year and are in the process of negotiating an all-encompassing trade agreement that they hope to sign this year.

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