24 May 2019 Taiwan Legal Update: The New Southbound Policy and Cabinet approves draft amendments to Foreign Trade Act
The Mutual Benefits Of The New Southbound Policy
Launched in 2016, The New Southbound Policy (NSP) aims to reduce Taiwan’s economic dependence by consolidating ties with South and Southeastern Asia countries, Australia and New Zealand.
On Thursday 23rd May, during weekly briefings from the Executive Yuan’s Office of Trade Negotiations, Premier Tseng-chang announced the progress of the New Southbound Policy.
Since the introduction of NSP, Taiwan has observed growing opportunities due to cooperation with regional neighbors. Taiwan has signed 29 agreements, covering trade, education, environmental protection, science and technology, training for high-level officials, health care, agriculture and other topics.
Regarding bilateral economic trade, the total volume between Taiwan and NSP countries grew by 22% to US$117.1 billion; inbound investments grew by 66%; exports increased from US$59.5 billion to US$68.4 billion; imports increased from US$ 36.6 billion to US$48.7 billion. Additionally, Direct Foreign Investment flows from the 18 countries to Taiwan grew from US$253.91 million to US$391.54 million. The NSP also promotes two-way study abroad programs to build understanding and cultivate specialists for different fields. The number of Taiwanese students travelling to NSP nations for academic or internship programs surged 34.7 per cent from 2016 to 2018. The government has also reported sustained growth in resource sharing. NSP members seeking medical treatment in Taiwan grew from 75,800 visitors in 2016 to 154,800 visits in 2018.
John Deng, head of the Trade Negotiation Office, blames the annual 10.9% drop in export volume to “drastic changes in the international arena” and reassured room for “optimism”. Since last year, neighboring countries have been shifting their policies to other areas. The NSP is a well-timed response to Asia’s new political and economic structure and supports the regional visions of other nations, such as the Indo-Pacific strategy, advocated by the U.S. and Japan. Nonetheless, demand for Taiwanese products remains stable in 10 ASEAN member states, six South Asian countries, Australia and New Zealand, which are listed in the government’s New Southbound Policy.
For the new year, the government will draw concrete plans to facilitate greater cooperation in health, given interest expressed by some of the 18. The office has also vowed to push for major investment projects with the target countries.
Cabinet approves draft amendments to Foreign Trade Act
To counter the practice of illegally re-labelling goods and obtaining fraudulent certificates of origin, the Cabinet approved draft amendments to the Foreign Trade Act as drafted by the Ministry of Economic Affairs (MOEA).
The draft amendments will increase fines for violations and introduce rules governing rewards for whistle-blowers. These changes will hopefully protect trade and uphold the reputation of “Made In Taiwan” in global commerce. The draft revisions will also call for increased criminal and administrative fines to provide protection for the export of strategic high-technology goods, to the degree required.
Importers from western countries are adopting stricter approaches in identifying the country of origin. Premier Su directed the MOEA and the Ministry of Finance to take the initiative in conducting inspections and enhancing management techniques to effectively suppress illegal transshipments. Such efforts to seek to preserve positive impressions of the MIT brand and safeguard the nation’s export competitiveness.
The draft amendments will now be forwarded to the Legislature for review.
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