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Passage of Taiwan-Japan Investment Agreement Expected by Year’s End

Passage of Taiwan-Japan Investment Agreement Expected by Year’s End

The‘Arrangement for the Mutual Cooperation on the Liberalization, Promotion and Protection of Investment’ signed by representatives from Taiwan and Japan on September 22 will be submitted to the Legislative Yuan for approval, with passage of the bill expected by the end of this year. The agreement, which contains 26 clauses related to investment by Taiwan and Japan in each other’s economies, is considered a breakthrough in relations between the two nations as it sidesteps the usual process of signing a Free Trade Agreement or FTA.

The agreement as it now stands contains several key provisions including treatment of investors on equal terms with local citizens and several most-favored-nation elements. The equal terms for investors means that Japanese who invest in Taiwan will have the same rights as ROC citizens when they conduct business in Taiwan, while the most favored nation provision means that any preferential treatment extended to a third nation by Taiwan will also be extended to Japan.

Vice Minister of Economic Affairs Huang Jung-chiou pointed out that Japan has long been a key source of investment and technology for Taiwan in areas like electronics, chemicals and machinery. With the inking of the investment agreement it will be possible to extend this to cover technology, intellectual property and securities as well.

President Ma Ying=jeou expressed his belief that the signing of the agreement has been made possible for two main reasons. First of all, Taiwan’s ECFA agreement with mainland China has lowered duties on many goods exported to China, in particular items like machine tools which generate a great deal of foreign exchange for Japan. Second, the March 11 Tohoku Earthquake has alerted many Japanese manufacturers to the need for alternative or backup production facilities in other areas, with Taiwan being the closest and in many ways the ideal partner.

Updated : 2021-10-18 17:01 GMT+08:00