CEPA agreement signed between Hong Kong and the mainland cited as a viable example

The European Chamber of Commerce Taipei (ECCT) has urged Taiwan's government to sign a proposed economic cooperation framework agreement (ECFA) with the mainland as soon as possible, saying it could remove barriers to Taiwan's inking economic pacts with other economies.

ECCT Chairman Nicholas Winsor said at a press briefing Wednesday that he believes that the ECFA would help Taiwan 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 the mainland 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 the the mainland in 2005 lifted a ban on international mutual fund proxy firms in Hong Kong wishing to sell their products on the mainland. In turn, this prompted such firms to offer higher pay to recruit Taiwanese professionals specializing in mutual fund proxies.

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

The Executive Yuan 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 admit more non-Taiwanese workers.

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

China Daily/CNA

(HK Edition 03/12/2010 page8)