Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Creating a New Era of Exports for SMEs Jien-Ping Wang Chief Secretary Bureau of Foreign Trade June 9, 2009 1 Outlines I. Trends in Taiwan’s Economy and Trade II. Government’s Efforts in Export Promotion III. Conclusions 2 I. Trends in Taiwan’s Economy and Trade 1. Taiwan Profile 2. The Development of Taiwan Economy and Trade 3. Changes in the Structure of Taiwan’s Exports 4. Taiwan’s Trade Performance since the Global Financial Tsunami 3 Taiwan Profile Small Yet Big 2 Area 36,000 km Population 23,058,550 (Mar. 2009) GNP US$ 402.6 billion (2008) GNP per capita US$ 17,576 (2008) GNP growth rate -2.09% (2008) Unemployment rate 4.14% (2008) Inflation rate (CPI) 3.53% (2008) Exchange rate 1 USD: 33.70 TWD (Apr. 2009) Foreign exchange reserves US$ 304.7 billion (Apr. 2009) Sources: Directorate-General of Budget, Accounting and Statistics, Executive Yuan, R.O.C Taiwan Profile Trade growth rate Economic growth rate Global 3 Export Taiwan 20 2.2 10 0.06 Import 9.67 3.63 0 0 -10 -3 -20 -2.6 -4.25 -6 2008 2009(f) -21.81 -30 -28.53 -40 2008 2009(f) Data source: Global Insight Inc, May 2009; Directorate General of Budget, Accounting and Statistics, May 2009 5 The relationship between International Trade and Economic Growth Data source: Global Insight Perspectives, Nov. 2008 6 2008 World Merchandise Trade Rankings for Taiwan Data source:WTO Press Release (March 23, 2009) 7 Taiwan Foreign Trade Statistics Unit: US$ billion;% year items Export value growth Import value growth 2000 2001 2002 2003 2004 2005 2006 2007 2008 148.3 126.3 135.3 150.6 182.4 198.4 224.0 246.7 255.6 22.0 -14.8 140.0 108.0 26.5 -22.9 7.1 11.3 21.1 8.8 12.9 10.1 3.6 113.2 128.0 168.8 182.6 202.7 219.2 240.4 4.9 13.0 Data source: Taiwan Directorate General of Customs; Compiled by the BOFT 31.8 8.2 11.0 8.2 9.7 8 Taiwan As No. 1 1971~ 1980 Decoration Ship dismantling Footwear Electric fans 1981~ 1990 Gourmet powder Umbrella Hat Tennis rackets Bicycle ABS resin Mini electronics Sewing machines Yachts Monitors 1991~ 1999 Scanners Mother boards Notebook Computers IC packaging Wafer foundry 2000~2004 Hub Record Optical Disk Mother Board Foundry Notebook PC SOHO Router LCD Monitor WLAN Cable Modem DSL Modem Optical Disk Driver IC Packaging Glass Fiber Network Interface Card ABS Copolymer Switch CDT Monitor Data Source: Industry &Technology Intelligence Service (ITIS) and IDB 2005~2006 PDA Servers (System & Pure MB) Mother Board IP Phones Notebook PC SOHO Router LCD Monitor WLAN WLAN NIC SOHO Routers DSL Modem VoIP Routers Blank Optical Disks IC Packaging LAN Switches IC Foundry Mask ROM ABS Copolymer Switch Diving Suits 2007~2008 Netbook Mother Board WLAN NIC Servers (System & Pure MB) Notebook PC DSL CPE Cable CPE LCD Monitor PDA IP Phones CDT Monitor Large Size LCD Panel VoIP Routers VoIP TA 9 International Status of Taiwan’s Leading Industries An important hub for the supply of new, innovative IT products Among the world’s leading semiconductor industries ☆ Steering the global OEM market ☆Controlling Mainland China production orders ☆ Controlling global IC OEM plus packaging and testing operations ☆ 2nd globally in IC design, 4th globally in manufacturing World’s leading LCD industry ☆Close to 50% global market share in large LCDs 10 The Development of Taiwan Economy and Trade Export Expansion Policy 1960s (light industry) Import Replacement 1950s Policy (light industry) 1970s Era of Import Replacement and Export Expansion (heavy industry) 2000 ~ present Globalized operations (developing knowledgebased economy) 1980s Liberalization, Internationalization, and Systematization Policies (strategic industries) 1990s Era of high-tech industry (10 major emerging industries) 11 Era of Import Replacement (1953~1960)-The Development of Light Industry Background Important Policies Taiwan was facing a shortage of funds, high unemployment, trade deficits, lack of technology, shortage of foreign exchange, a small domestic market, and a shortage of capital. Main Industries Developed Target To replace imports with domestic production to stabilize domestic prices and save on foreign exchange expenditures. The implementation of export tax rebates, low-interest export loans, foreign exchange and trade reforms; highly restrictive import policy changed to one of encouraging imports. Textiles, cement, glass, fertilizer, food, plywood, bicycles, motorcycles, household appliances, plastic products. Key Economic Indicators .The average economic growth rate: 7.7% .CPI growth rate: 18.51% (1960) .GDP ratio (1960) .Trade Value (1960) -Agriculture: 28.5% -Exports: US$0.164 billion -Manufacturing: 26.9% -Imports: US$0.297 billion -Services: 44.6% -Trade Balance: -US$0.133 billion 12 Era of Export Promotion (1961~1972)- The Development of Light Industry Background In the 1960s, light industrial goods substituting imports gradually saturated the domestic market, so it became necessary to export these products in order enable Taiwan's industries to develop further. Targets To change the passive protectionist policy to a strategy of developing competitiveness and expanding exports, and replacing agricultural and fishery exports with consumer items. Important Policies The implementation of “Regulations to Main Industries Developed Encourage Investment,” a single exchange rate, export tax rebate, depreciation of the NT dollar, set up export processing zones, export lowinterest loans, local content regulation, elimination of plant set-up restrictions. Textiles, plastic products, plywood industry, electronics (assembly). Key Economic Indicators . The average economic growth rate: 10.2% . CPI growth rate: 3.32% .GDP Ratio (1972) .Trade Amount (1972) -Agriculture: 12.2% -Exports: US$2.988 billion -Manufacturing: 41.6% -Imports: US$2.514 billion -Services: 34.3% -Trade Balance: US$0.475 billion 13 Era of Import Replacement and Export Expansion (1973~1983) - The Development of Heavy Industry Background The machinery, components and materials needed to feed the rapid expansion of light industry exports still depended on imports, which restricted the development of Taiwan’s companies and industries. Targets Replace imports a second time, and develop the production of light industrial capital goods, raw materials, and components. Important Policies Main Industries Developed Expand scope of export incentives, reduce oil import tariffs and taxes on petroleum products, coordinate petrochemical production and marketing, develop industrial zones, and undertake the Ten Major Construction Projects. Iron and steel, copper, aluminum and other basic metal industries; shipbuilding; automobiles; motorcycles and other means of transport; plastics; intermediate raw materials required for manmade fibers; ethylene, propylene and other petrochemical industries. Key Economic Indicators . The average economic growth rate: 8.2% . CPI growth rate: 11.42% .Trade Value (1983) .GDP Ratio (1983) -Exports: US$25.123 billion -Agriculture: 7.3% -Imports: US$20.287 billion -Manufacturing: 45.0% - Trade Balance: US$4.836 billion -Services: 47.8% 14 Era of Liberalization, Internationalization, and Systematization (1984~1990) -The Development of Strategic Industry Background Targets Important Policies Long-term foreign trade surplus, surging foreign exchange reserves, and sharp appreciation of the NT dollar in the second half of 1986 weakened export competitiveness. Meanwhile, a nascent labor movement, Main increasing wages, and strength of the Industries environmental protection movement Developed forced traditional industries to shift production overseas. Develop strategic industries and enhance export competitiveness. Development of high-tech, high added-value and low-power strategic industries; establishment of Science-Based Industrial Park to develop high-tech industry; enterprises encouraged to strengthen R&D and to improve productivity, quality and international competitiveness. Industries with market potential; those with large add-on effects; high value-added, technology-intensive, low energy, lowpolluting industries: e.g., ITC, precision instruments, metals, and biotechnology. Key Economic Indicators . The average economic growth rate: 8.8% . CPI growth rate: 1.55% .Trade Value (1990) .GDP Ratio (1990) -Exports: US$67.214 billion -Agriculture: 4.2% -Imports: US$54.716 billion -Manufacturing: 41.2% -Trade Balance: US$ 12.498 billion15 -Services: 54.6% Era of High-tech Industries (1991~2000) -Promotion of Ten Major Emerging Industries Background Taiwan’s traditional industries continued to relocated overseas, while the competition from newly developing nations increased. Targets Important Statute for upgrading industries to replace Policies investment incentives; strengthen guidance on Main Industries Upgrade industry and strengthen Developed our international competitiveness. technical R&D; promotion of automation and personnel training; upgrade quality; develop more industrial zones. Communications, IT, consumer electronics, semiconductors, precision instruments and automation equipment, aerospace, advanced materials, chemicals, biotechnology and pharmaceuticals, healthcare, and pollution prevention. Key Economic Indicators . The average economic growth rate: 6.5% . CPI growth rate: 2.59% .GDP Ratio (2000) .Trade Value (2000) -Agriculture: 2.0% -Exports: US$151.950 billion -Manufacturing: 29.1% -Imports: US$140.732 billion -Services: 68.9% -Trade Balance: US$11.218 billion 16 Knowledge-Based Economy (2000 ~ present) -The Development of Knowledge-Based Industry Background International competition becomes more intense due to globalization, development of knowledge-based economy, and the acceleration of regional economic integration. Important Implemented the knowledge-based Policies economy development project, global Main Industries Developed Targets Promote knowledge-based economic activities and create an environment conducive to the development of knowledge-based industries. logistics development plan, Challenge 2008: National Development Plan, New Ten Major Construction Projects, Guidelines and Action Plans for Service Industry Development, etc. The “two trillion double-star industries” (semiconductors, visual displays, digital content, and bio-technology) Key Economic Indicators . The average economic growth rate: 2.9% (2001~2007) . The average CPI growth rate: 0.62% (2001~2005) . GDP Ratio (2005) .Trade Value (2005) -Agriculture: 1.8% -Exports: US$198.435 billion -Manufacturing: 24.6% -Imports: US$182.616 billion -Services: 73.6% -Trade Balance: US$15.819 billion 17 Changes in the Structure of Taiwan’s Exports Taiwan’s main export commodities in 1998 were electronic products, textile products, ITC products, and machinery products. By 2008, Taiwan’s main export commodities were electronic products, plastics & rubber and articles thereof, optical instruments, and iron & steel, accounting for 47.6% of total exports—a tendency toward overconcentration. Structure of Taiwan's Exports from 1998 ~ 2008 80.00 70.00 60.00 50.00 40.00 Unit:% 30.00 20.00 10.00 0.00 1998 Electronic Products 1999 Iron&Steel 2000 2001 2002 Plastics, Rubber and Articles Thereof 2003 2004 Optical Instruments 2005 Machinery 2006 Chemicals 2007 Textile Products 2008 ITC Products 18 Data source: Taiwan Directorate General of Customs; Compiled by the BOFT Taiwan’s major export destinations have shifted to China and emerging markets 1989 US$66.3 billion 1998 US$110.6 billion US 36.3% US 26.6% Japan 8.4% Europe 17.8% Japan 13.7% Others 16.4% Others 20.3% Europe 16.5% Em erging countries 13.2% Mainland China 10.7% Japan 6.9% 2008 US$255.7 billion Mainland China 23.5% Europe 11.7% Em erging countries 30.8% US 12.0% Others 18.8% Data source: Taiwan Directorate General of Customs; Compiled by the BOFT Em erging countries 50.6% Mainland China 39.0% Emerging countries: Mainland China, Russia, Brazil, India, the Middle East, ASEAN (Vietnam, Malaysia, Indonesia) 19 Taiwan’s Trade Performance since the Global Financial tsunami Formation and Evolution of Global Financial Tsunami Taiwan’s Trade Performance since the Global Financial tsunami Taiwan’s exports severely plunged since September 2008. Export alarms have gone off with Taiwan’s main trading partners. Sluggishness in export of electronic products and electrical machinery products. Declines in imports of electronic products, machinery, electrical machinery products, organic chemicals, optical instruments, and transport equipment. Definite results obtained from efforts to enhance export promotion to 10 target markets. 20 The Global Financial Tsunami: its formation After collapse of the dot-com bubble and the 911 attacks, the US Fed lowers interest rate from 6% to 2% in 2001; the market becomes awash in capital. 1 3 US Fed is forced to impose large increases in interest rate. This causes financial turbulence, the US dollar declines in value, and the subprime mortgage crisis erupts. 5 Easy money seeking higher returns flows into global stocks, real estate, and commodities, causing rapid increases in prices for real estate, energy, and grain, as well as high inflationary pressure worldwide. Many US homeowners default on mortgages, go bankrupt, or sharply reduce consumer spending to avoid default. As subprime default rate climbs, the underwriting banks face serious losses and pressure from asset devaluation. After Lehman Bros. collapse in September, credit risk spreads to other banks and financial institutions. Because bonds issued by subprime underwriters, Fannie Mae and Freddie Mac were sold around the world, international finance and the global economy were also seriously affected. 2 4 6 21 The Global Financial Tsunami: its evolution 1 Weakening economy, 2 3 Insufficient 4 5 Crisis of confidence in capital markets bank capital leads to the first line of bank collapses Prices for REITs and structured notes fall stock and real estate market drop together When credit is tight, cash is king 6 Banks tightened business credit 7 Low turnover causes businesses to close or lay off employees Unemployment rises 8 9 Low consumer confidence, cutbacks on spending Insufficient domestic 10 demand, economic decline 22 Severe plunge in Taiwan exports since Sep. 2008 Due to the rapid slowdown in the international economy caused by the global financial tsunami since Sep. 2008, Taiwan exports have shown eight consecutive months of decline. April 2009 exports decreased 34.3%, less than the first quarter average decline rate (36.6%). 30 % Export value 25 30 20 Growth rate 10 % 20 0 Unit: US$ billion 15 -10 -20 10 -30 5 0 -40 2008 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Export value 22.1 17.6 24.2 22.6 23.6 24.3 22.9 25.3 21.9 20.8 Growth rate 11.8 18.3 22.7 13.9 20.5 21.2 7.9 18.2 -1.6 -8.3 Data source: Taiwan Directorate General of Customs -50 Dec. 2009 Jan. Feb. Mar. Apr. 16.8 13.6 12.4 12.6 15.6 14.8 -23.3 -41.9 -44.1 -28.6 -35.7 -34.3 23 Export alarms have gone off with Taiwan’s main trading partners For the entire year of 2008, Taiwan exports to Europe and Japan increased 4.6% and 10.2% respectively; however, Taiwan exports to the US decreased 4%, while exports to Mainland China and ASEAN have shown four consecutive months (Sep.~Dec. 2008) of decline. Due to the global financial crisis, export alarms have gone off with Taiwan’s main trading partners. The third largest export market (US): The share of exports to this market was 12%; exports to this market decreased 4.0% The fourth largest export market (Europe): The share of exports to this market was 11.7%; exports to this market increased 4.6% The largest export market (Mainland China): The share of exports to this market was 39%; exports to this market decreased 0.8% The second largest export market (ASEAN): The share of exports to this market was 15%; exports to this market increased 7.3% The fifth largest export market (Japan): The share of exports to this market was 6.9%; exports to this market increased 10.2% 24 Exports of electronic products and electrical machinery products: sluggish Because of soaring raw material and crude oil prices in the first half of 2008, exports of chemicals grew 16.0% for the entire year. Because of the global financial crisis in the second half of 2008, exports of electronics and electrical machinery decreased 3.2% and 8.1% respectively for the entire year. 60 unit:% 50 40 30 16.0 20 13.3 10.2 10 4.9 6.4 3.2 0 -10 -3.2 Electronic products Optical instruments Chemicals Data source: Taiwan Directorate General of Customs Iron & steel and articles thereof Machinery -8.1 Electrical machinery products Information and communiction products Transport equipment 25 Declines in imports of electronic products, machinery, electrical machinery products, organic chemicals, optical instruments, and transport equipment Because of soaring raw material and crude oil prices in the first half of 2008, imports of crude oil shot up by 35.1% for the entire year. Because of the global financial crisis in the second half of 2008, imports of electronic products, machinery, organic chemicals, optical instruments, and electrical machinery products decreased 3.4%, 0.2%, 1.8%, 8.8% and 4.4% respectively for the entire year. Imports of transport equipment plunged 18.7% because of drops in demand for rail transportation and aircraft equipment. 60 unit:% 50 40 35.1 29.3 30 20 10 4.9 0 -10 -20 -0.2 -3.4 Electronic products Crude oil Machinery Iron & steel and articles thereof Data source: Taiwan Directorate General of Customs -1.8 Organic chemicals -8.8 Optical instruments -4.4 Electrical machinery products -18.7 Transport equipment Information and communiction products 26 Global financial tsunami has impacted Taiwan’s main exports to Mainland China seriously The value and growth rate of top 10 imports in Mainland China market from Taiwan Unit:US$ million; % Imports in Mainland China market from Taiwan HS Value Description Growth Rate 2008 2008 Sep.~ 2009 Apr. 2008 2008 Sep.~ 2009 Apr. Top 10 imports 8542 IC 29,518.8 16,062.3 1.0 -22.5 9013 Liquid crystal devices 18,503.5 6,571.0 6.6 -55.3 8541 Diodes 3,090.2 1,552.7 11.0 -23.1 8534 Printed circuits 2,710.5 1,412.2 -9.6 -30.0 3903 Polymers of styrene 2,170.9 1,209.6 -2.7 -21.3 2917 Polycarboxylic acids & halogenated derivatives 1,820.5 943.2 -6.9 -31.1 8473 8469~8472 parts& accessories 1,603.8 824.3 -3.4 -18.6 9001 Optical fibers& optical fiber bundles 1,350.8 692.1 32.0 -23.2 2902 Cyclic hydrocarbons 1,407.7 675.5 72.8 -28.9 1,207.8 605.4 -7.6 -30.4 Polyacetals 3907 Data source:China Customs House 27 Significant results from export promotion directed at ten targeted markets For the whole year of 2008, Taiwan’s exports to the ten focus countries showed a 17.5% growth on average, which is 3.8 times that of Taiwan’s overall export growth rate (3.6%) in the same period. 100 •Red font: The actual growth rate 80 Unit: % •Black font: The targeted growth rate 64.4 60 40 20 28.4 17 20 20.4 20 22.5 10 15.8 20 15.2 15 11.7 10 10.2 8 2.3 10 8 0 Brazil -20 India Spain Indonesia Vietnam Data source: Taiwan Directorate General of Customs Russia South Korea Japan Malaysia -16.2 Turkey 28 II. Government’s Efforts in Export Promotion 1. Continuously Implement Region’s Working Agenda 2. Global Market Expansion Plan (New Cheng Ho Plan) 3. Branding Taiwan Plan 4. Taiwan MICE Advancement Program & Taiwan Exhibition Competitiveness Enhancement Project 5. Our Views on ECFA 29 Continuously Implement Region’s Working Agenda 5th stage: strengthening the working agenda for trade with North America 5th stage: working agenda for trade with Europe 4th stage: working agenda for trade with Central and South American countries with whom we have full diplomatic relations 5th stage: strengthening the working agenda for trade with Southeast Asia, Australia, and New Zealand Action agenda for strengthening economic and trade relations with India 30 Framework of the New Cheng Ho Plan Years New Cheng Ho Plan 2008 9. ~ 2012 Shaping the trade financial environment Strengthening of export finance and export insurance 2009-2010 Expansion of the Mainland China market Expanding Mainland China’s markets 2009-2010 Expansion throughout the emerging markets Expanding throughout the emerging markets 2008.09-2012 Expansion of marketing strategies Creation of new procurement domain Attracting procurements from foreign buyers Pursuing global government procurement opportunities 2009 2009-2010 31 Strengthening of export finance and export insurance Initiate a series of plans to strengthen export finance and export insurance from 2009 to 2010, with a budget of NT$ 5.58 billion: Favorable export financing plan: Support EXIM bank to provide export insurance on favorable terms. Expansion to include all exporting industries and exporting districts Export promotion through re-lending plan Increase cooperation with global relending banks and extend relending credit on favorable terms. Export insurance plan: Offer favorable terms for credit verification and insurance fees, and provide comprehensive compensation. Expected Benefits Increase the value of exports to NT$50 billion, with 70% of exports to emerging markets. 32 Expanding Mainland China’s markets Build marketing channels 1.hold Taiwan food festivals 2.Set-up Taiwan food sections Invite foreign buyers to purchase in Taiwan Organize trade missions Participate in important international food exhibitions Organize Taiwan food Promotion Plan Promote exports of Taiwan food to Mainland China Increase support to industrial associations to promote exports Provide market research and business intelligence Create Marketing Strategies Enhance Internet promotion Provide consultation on branding Increase service points and human resources Pursue Mainland China’s domestic market 33 Expanding throughout the emerging markets General strategies Increase allowances for emerging markets Expand exports of 3 niche industries -Auto parts and accessories -Textiles -Machine tools and accessories Establish overseas business pioneer training program Promote exports with high-level trade missions to emerging markets Russia Specific strategies for different markets Middle East India Including Saudi Arabia, UAE and other 12 countries Brazil ASEAN Focus on Malaysia, Indonesia34 and Vietnam Attracting procurements from foreign buyers Initiate a series of activities to invite foreign buyers to purchase in Taiwan, focusing on large and emerging market buyers: Sourcing Taiwan(2009.03.30~04.02) Signed Letters of Intent, organized product displays, setting up industry discussion areas Organize Reverse Shows (2009) Offer customized procurement services to international buyers. Invite emerging market buyers to purchase in Taiwan(2009) Encourage emerging market buyers to organize trade missions to purchase in Taiwan Expected Benefits Invite foreign buyers to participate in 14,500 trade discussion meetings with 5,200 domestic firms Facilitate procurements worth up to NT$180 billion 35 Pursuing global government procurement opportunities Enhance bidding capabilities for tenders Screen for competitive industries Organize government procurement trainings and professional consultants Hold series of seminars Hold seminars for foreign government purchases Hold seminars for business opportunities Assist firms to participate in government procurement opportunities Set-up a business opportunities website Provide links to WTO member government procurement websites Provide potential business opportunities Create a professional counseling atabase Develop a business opportunity handbook Invite foreign business who won GP tenders to purchase in Taiwan Act as intermediary between foreign businesses and domestic suppliers Provide air-fare and accomodations Invite bid-winners to hold business opportunity meetings 36 Branding Taiwan Plan OEM ODM OBM Innovation + Design = Springboard from OEM to ODM Biggest challenge: How to shift from OEM to an innovator Getting rid of traditional thinking/practices; setting new strategies to become more competitive 1990s R&D ODM 1980s 2000s OEM OBM IDM Innovative Design & Manufacturing IDM Establish Taiwan’s Motivate and stimulate the uniqueness in drive to create own brands manufacturing/design 37 Branding Taiwan Plan 6 measures Branding Investment Fund Foster an environment conducive to branding Establish a brand appraisal system Cultivate talent and provide training Establish a branding information platform Raise the international image of Taiwan Products and brands 38 Branding Taiwan Plan Future Goals Stimulate Taiwan entrepreneurs to enhance their brand value Encourage Taiwan SMEs to move forward to brand marketing (OBM) Focus on “Branding Taiwan Plan” to bring more renowned brands into the world markets, and become the pride of Taiwan 39 The Framework of Taiwan MICE Advancement Program Taiwan MICE Overall Implementation Project Taiwan MICE Advancement Program Taiwan MICE International Marketing and Promotion Project Taiwan MICE International Meetings Hosting Project Taiwan MICE Training and Certification Project 40 Taiwan MICE Advancement Program Establish the Taiwan MICE Overall Implementation Project Taiwan MICE International Marketing and Promotion Project contact window and to reinforce MICE-related policies. Coordinate/integrate resources from central and local government organizations. Conduct research on MICE industry. Provide funding for MICE held in Taiwan by associations, academic organizations and companies. Market and brand Taiwan’s MICE industry internationally. Re-structure and manage the MeetTaiwan portal. Reinforce MICE sources and administer data pool. 41 Taiwan MICE Advancement Program Taiwan MICE International Meetings Hosting Project Taiwan MICE Training and Certification Project Support associations/organizations bidding for target conferences. Provide complete information and customized assistance. Develop a training mechanism to cultivate MICE professionals. Establish a certification system that meets international standards. Establish an evaluation system to ensure the integration of training and practices. 42 Taiwan Exhibition Competitiveness Enhancement Project 1. Develop new exhibitions in accordance with industry and market needs: Taiwan Exhibition & Convention Industry Show (EXCO Taiwan) 7 Exhibitions held in 2008 will be continued. These include: AutoTronics Taipei, Motorcycle Taiwan, SenCare, Leisure Taiwan, Taiwan RFID, Broadband Taiwan, and Kaohsiung Food Show. 2. Foreign Visitors Invitation Program Three types of subsidies to qualified applicants: Round-trip economy class airfare or Hotel subsidy: up to NT$20,000 or Health exam: up to NT$20,000 43 Taiwan Exhibition Competitiveness Enhancement Project 3. Expand exhibitions Assist 14 targeted industries to expand the scale of exhibitions: computers, bicycles, auto parts and accessories, agriculture and food, food processing equipment, packaging, sporting goods, gifts and stationery, electronics, plastics and rubber, machine tools, medical equipment, furniture, and lighting. 4. Establish a Taiwan virtual exhibition website Taipei Tradeshows website was established to help exhibitors increase business opportunities and sharpen their competitiveness. •Online campaigns and promotions •Online services 44 Title of the ECFA The tentative title is “Cross-Strait Economic Cooperation Framework Agreement” (or simply “Cross-Strait Economic Agreement”). The English title ECFA (Economic Cooperation Framework Agreement) may be used temporarily. 45 Objectives of the ECFA 1. Normalization of cross-strait economic and trade relations While both parties are members of the WTO, there are still many economic and trade restrictions. 2. Avoidance of being marginalized from regional economic integration schemes Currently, there are over 230 FTAs globally with mutual duty-free arrangements. If we do not participate, we will face the threat of being marginalized and losing our competitive edge in the important markets. 3. Internationalization of our economy, trade and investments By signing the Framework Agreement, the cross-strait economic and trade relations will be more predictable and benefit Taiwanese business to make worldwide arrangements and attract foreign business to Taiwan, thus enabling Taiwan to become a trading hub in the Asia-Pacific. 46 Taiwan’s Positions on the ECFA We do not adopt the model of Hong Kong and Macao, and the ECFA is not an ordinary free trade agreement (FTA); it is an economic cooperation agreement with a distinctive cross-strait quality and one that does not violate the spirit of the World Trade Organization (WTO). It will cover matters pertaining to economic cooperation and will not touch on unification, independence, and political issues. 47 Meaning of the Framework Agreement A comprehensive FTA cannot be achieved in one step. There will be more flexibility in dealing with it only by pre-determining the framework and goals and through future consultations on specific content. The “Early Harvest” provisions will meet the urgent needs of the project and provide early realization of favorable benefits. Examples: ASEAN + China The ASEAN-China Comprehensive Economic Cooperation Agreement was signed in Nov. 2002 (“Early Harvest”: HS Chapters 1-8 for agriculture and fishery products) and went into effect in Jan. 2004. Signed a framework agreement for Agreement on Trade in Goods in Nov. 2004. Signed a framework agreement for Agreement on Trade in Services in Dec. 2006. 48 Immediate Impact of Not Advancing the Agreement The Process of ASEAN + X Free Trade Area Entry into Force Scheduled Commitments ASEAN + China (Agreement July 2005 2010: most products 0% July 2007 2010: 90% of products 0% Dec. 2008 2018: 91% of products 0% Scheduled for July 2009 2020: 96% of products 0% on Trade in Goods) ASEAN + South Korea (Agreement on Trade in Goods) ASEAN + Japan EPA ASEAN + Australia and New Zealand FTA 49 Vision for Cross-Strait Economic and Trade Cooperation Establish a stable crossstrait economic and trade cooperation framework; open a favorable crossstrait interaction mechanism. Improve the basis of promoting Taiwan’s opportunities to enter into bilateral FTAs with other countries and participate in regional economic and trade cooperation. Promote Taiwan in becoming a global center of innovation, an Asia-Pacific hub of economy and trade, and the headquarters for Taiwanese businesses 50 III. Conclusions 1. Create an environment conducive to SMEs and start-ups 2. Assist SMEs to expand their exports and become more globally oriented 3. Encourage SMEs to strengthen innovation activities effectively Taiwan Your Partner in the Global Market! Thank You! 52