Taipei, Dec. 19 (CNA) Taiwan and Vietnam have signed a new version of a bilateral investment agreement (BIA) in a bid to provide better protection for Taiwanese investors in the Southeast Asian country, according to the Ministry of Economic Affairs (MOEA).
The MOEA said Taipei and Hanoi first signed a BIA in 1993 but as economic exchanges between the two sides have increased significantly in the past 26 years, the original accord needed to be revised to meet demand for more comprehensive protection for Taiwanese investors.
The BIA was signed Wednesday by Taiwan's representative to Vietnam, Richard R.C. Shih (石瑞琦), and Vietnam Economic and Cultural Office in Taipei Director Nguyen Anh Dung.
The MOEA said the new BIA was inked after years of negotiations between Taiwan and Vietnam involving many agencies such as the Office of Trade Negotiations under the Cabinet, the Taipei Economic and Cultural Office in Vietnam, the Ministry of Justice, the Ministry of Foreign Affairs, the central bank and the MOEA.
The MOEA said that through the new BIA, the Vietnamese government is expected to better protect the interests and rights of Taiwanese companies operating in Vietnam, adding that the investment pact is expected to reinforce confidence among Taiwanese firms for future investment.
According to the MOEA, the new BIA emphasizes protection coverage not only for Taiwanese companies' direct investments but also indirect investments in Vietnam through a third country.
In addition, new investment instruments such as futures and options, among other derivatives, are covered by the new agreement, the MOEA said.
The MOEA said it includes a clause to ensure that Taiwanese and Vietnamese investors will enjoy equal treatment in each other's countries, as well as a performance requirement prohibition clause, which will bar the Vietnamese authorities from demanding that Taiwanese firms must use a certain ratio of products made in Vietnam in their operations.
The new agreement, the MOEA said, has an investor-to-state dispute settlement mechanism so that should disputes arise, Taiwanese investors can negotiate with the Vietnamese government, and if the disputes cannot be resolved in six months, they will be able to resort to international arbitration.
The MOEA said that under the agreement, when Taiwanese investors encounter investment obstacles, the Taiwanese government will be able to negotiate with its Vietnamese counterpart for assistance in removing the hurdles.
The MOEA said the agreement requires the Vietnamese government to release any amendments to its investment regulations in a timely manner and to provide answers to any questions raised by Taiwanese firms, in order to boost regulatory transparency.
Commenting on the new BIA, Minister of Economic Affairs Shen Jong-chin (沈榮津) told reporters that the new investment pact is expected to speed up the pace of Taiwanese investment in Vietnam at a time when the government is pushing its New Southbound Policy.
The policy aims to promotes exchanges with the Association of Southeast Asian Nations (ASEAN), South Asian countries, Australia and New Zealand in a bid to reduce Taiwan's economic reliance on China.
Shen said the government is in talks with other countries under the policy to sign new versions of BIAs in an attempt to lay a solid foundation for Taiwanese investors eyeing foreign markets.
Taiwan also signed new BIAs with the Philippines and India in 2017 and 2018, respectively, according to Shen.
Statistics compiled by the MOEA show that Taiwan ranks as the fourth-largest foreign investor in Vietnam, behind only South Korea, Japan and Singapore.
In the first 10 months of this year, Taiwanese firms poured more than US$1.2 billion into Vietnam, up 56 percent from a year earlier. As of the end of October, the aggregate investments by Taiwanese investors in Vietnam hit US$31.9 billion, the data shows.
The data also indicated during 1952-October 2019 period, Vietnam invested a total of US$64.85 million in Taiwan.