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Commercial Times: Benefits of investment protection pact

2012/08/10 14:45:55

The two sides of the Taiwan Strait finally signed an investment protection pact Thursday following long delay.

Generally speaking, the greatest benefit of the agreement is that it allows Taiwan to intervene to protect the rights and interests of its businesspeople in China.

The pact, for example, allows for the mediation of Taiwanese arbiters in cross-strait investment disputes between individuals or private businesses. For disputes between private Taiwanese investors and local Chinese governments, related government agencies in Taiwan can step in when necessary.

In addition, the agreement established a set of rules for handling disputes involving Taiwanese companies, and serves as a reminder for the companies and their Chinese business partners to act in good faith.

It will also change the attitude of local governments in China toward Taiwanese companies. When the local governments plan to expropriate property held by Taiwanese companies, they will be required to follow the rules and provide reasonable compensation.

Governments on either side of the strait should embark on campaigns to publicize the agreement among China-based Taiwanese companies. They should also begin work as soon as possible to establish the arbitration mechanism and seek to enhance the efficiency of the arbitration process.

The agreement can only work when proper complementary measures are made available. (Editorial abstract -- Aug. 10, 2012)

(By Y.F. Low)