Remember TISA While Signing ASTEP
China Times editorial (Taipei, Taiwan, Republic of China)
November 8, 2013
Summary: ASTEP was supposed to be signed during a DPP administration. But three years of tough negotiations were necessary to reach an agreement. We owe the negotiating team a round of applause. The government and civil society together welcome the free market that ASTEP will initiate. Meanwhile, let us not forget TISA, which remains stalled in the Legislative Yuan.
Full text below:
After three years of tough negotiations, the Republic of China and the Republic of Singapore finally signed the Taiwan Singapore Economic Partnership Agreement (ASTEP), on the 7th of this month. ASTEP is unlikely to have any short term impact. it will not affect this year's anticipated 2% economic growth. But it will contribute to our long term economic growth. Our economy is being suffocated. ASTEP will give it a shot in the arm. The Ministry of Economy Affairs estimates that 15 years after ASTEP is signed and implemented, it will increase our GDP by 701 million USD, and total GDP by 42.1 billion NTD. As many as 6,154 more jobs will become available. But we think ASTEP will have an even more important effect.
According to statistics, 2012 ROC Singapore bilateral trade amounted to 28.2 billion USD. Singapore is our fifth largest trading partner. Singapore is our fourth largest export market. It buys over 6% of our exports. It is our eighth largest source of imports. Bilateral trade relations are close. Our agreement with Singapore follows on the heels of our ECFA agreement with the Mainland. It is an important indicator of our liberalization for the international community.
ASTEP is a finely crafted agreement. It covers trade in goods, trade in services, investments, dispute resolution, e-commerce, government procurement, customs procedures, and other issues. Singapore's trade in goods with the ROC is 100% liberalized. When Singapore joined WTO, six alchoholic beverages were not included. For the ROC, the duty on these has been eliminated. In other words, Singapore's commitments to the ROC are more favorable than those mandated by the WTO. The ROC will immediately eliminate tariffs on 83% of all Singaporean goods. Eventually tariffs will be eliminated on 99.48% of all goods. Singapore already levies no tariffs whatsoever on over 90% of all goods from the ROC. Therefore the ROC must further reduce overall tariffs.
These figures, spread out for all to see, speak louder than words. They underscore the ROC's determination to establish a free economy. They will help the ROC during future economic and trade negotiations. They will help promote ROC participation in the Trans-Pacific Partnership Agreement (TPP) and Regional Comprehensive Economic Partnership (RCEP).
Tariffs will be eliminated entirely on over 80% of all Singaporean exports to the ROC. The impact on traditional industries will be considerable. But neither the ruling nor opposition parties have voiced opposition. They have affirmed ASTEP in toto. This shows that Taiwan has not backtracked on economic liberalization. This shows that TISA running aground is entirely due to the Democratic Progressive Party's Taiwan independence stance, and not to protectionist policy. The DPP should make clear its economic strategy. Is it anti-China or is it anti-free trade?
Meanwhile, ASTEP provisions are quite comprehensive. Take the impact on sensitive sectors. Tariff reduction is divided into three stages: 5, 10, and 15 years. This provides businesses with enough time to adapt. Southeast Asian and other countries may attempt to hitch a free ride on ASTEP. But the ROC requires proof of origin. The government will implement strict verification mechanisms. The government will also conduct joint inspections with Singapore. This will deter "guo shui" or the filing of false origins reports. As long as the government takes adequate precautions, and communicates clearly, liberalization is entirely feasible.
When the legislature reviews future TISA and TIGA agreements, it should draw from experience. People are worried about TISA. Basically these worries are the result of poor communications and emotional reactivity. They are the result of subtle brainwashing in the aftermath of political struggle. The Executive Yuan must improve its communication skills. Ministry heads must stand and be heard. They must allay national security concerns. They must dissolve unwarranted fears about "the Communist threat." They must underscore the economic benefits, in order to convince the public.
Finally, ASTEP includes investment promotion, investment protection, and investment liberalization. It opens up the two sides' service sectors and e-commerce sectors. This is good for both sides. For Taiwan, the creation of value-added services is particularly important. The agreement stipulates that the two sides shall treat each as they would citizens, and that they shall not impose requirements pertaining to the number of transactions, to total assets, or to business models. They shall not require that businesses be located in certain locales or otherwise restrict service industry market access. As we all know, Singapore is an international leader in the financial, management, education, and gaming industries. Financial openness and wealth management companies have enabled Singapore to achieve an average annual per capita income of $50,000 USD..
The Singaporean government provides an excellent business environment for service industries. It clearly enumerates what is forbidden. Its rules are clear. It abides strictly by the rule of law. Its language and cultural is similar to ours. Taiwan education and wealth management services can easily adopt. They can share in the markets Singapore has opened up in Southeast Asia and even the rest of the world. Singapore's direct investment in ROC manufacturing and service industries (FDI), will bring international capital and progressive management to Taiwan. This can raise salaries and create jobs on Taiwan. This can help revive our suffocating economy. The opening up of government procurements and exchanges will also enable the ROC government to learn Singapore's efficient management techniques, and discover solutions. These are all reasons why we think the Ministry of Economic Affairs has grossly underestimated the importance of ASTEP.
ASTEP was supposed to be signed during a DPP administration. But three years of tough negotiations were necessary to reach an agreement. We owe the negotiating team a round of applause. The government and civil society together welcome the free market that ASTEP will initiate. Meanwhile, let us not forget TISA, which remains stalled in the Legislative Yuan.
中國時報 本報訊 2013年11月08日 04:10