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### Viewing cable 05TAIPEI2653, AMCHAM WHITE PAPER FOCUSES ON HUMAN RESOURCE AND

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
05TAIPEI2653 | 2005-06-16 09:14 | 2011-08-23 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | American Institute Taiwan, Taipei

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

` `

    UNCLAS SECTION 01 OF 03 TAIPEI 002653

    SIPDIS

    SENSITIVE

    DEPT FOR EAP/TC
    PLEASE PASS AIT/W, USTR
    COMMERCE FOR 4400/ITA/MAC/M-BMORGAN
    COMMERCE FOR 3005/ITA/CS/ADVOCACYCENTER BLOPP AGELFUSO
    COMMERCE FOR 3132/ITA/CS/OIO/DRD EAP JHAMILTON

    E.O. 12958: N/A
    TAGS: ECON ETRD EINV TW
    SUBJECT: AMCHAM WHITE PAPER FOCUSES ON HUMAN RESOURCE AND
    PUBLIC HEALTH ISSUES

    REF: A. TAIPEI 2124
         ¶B. TAIPEI 2526
         ¶C. TAIPEI 2546

    Summary
    -------

    ¶1. (SBU) The American Chamber of Commerce in Taipei's
    (Amcham) 2005 White Paper focuses primarily on human
    resources and public health.  It urges steps that would
    enable firms operating in Taiwan to hire more foreign
    employees, including PRC nationals - both to relieve
    manpower shortages and internationalize the workforce.
    Health-related recommendations address intellectual
    property concerns and barriers that limit market access for
    U.S. pharmaceuticals and medical devices.  Other important
    issues include completing financial sector reforms,
    improving government procurement processes, and the
    establishment of the National Communications Commission
    that would act as a regulator for telecommunications and
    broadcasting.  Amcham's White Paper priorities have changed
    little over the past three years, reflecting the Taiwan
    government's difficulty in managing cross-Strait issues and
    in dealing with some of the challenges facing its maturing
    economy.  If progress doesn't improve soon, it risks
    falling behind its competitors in the region.  End summary.

    ¶2. (U) The American Chamber of Commerce in Taipei released
    its 2005 Taiwan White Paper on May 31 with advice for
    Taiwan's government on improving the island's business
    climate.  This year's White Paper had two main focuses -
    human resources and public health.  Among the paper's seven
    overall recommendations, eliminating government
    restrictions on hiring decisions moved to the top of the
    list, followed by improving Taiwan's public health and
    healthcare environment.  Tightening intellectual property
    protection was the third item.  This year the paper
    highlights the importance of intellectual property
    protection to public health due to the dangers posed by
    counterfeit drugs and agro-chemicals.

    ¶3. (U) The other overall recommendations are insisting on
    world-class infrastructure, building on economic synergies
    with China, completing financial reforms, and strengthening
    the attack on corruption.  The seven recommendations are
    identical to the 2004 White Paper recommendations although
    human resources moved up the list to replace cross-Strait
    issues as the top priority.  They also include all six of
    the recommendations made in the 2003 White Paper.  The 2005
    White Paper reports that five of the 69 priority issues
    identified in the 2004 White Paper have been resolved.
    Thirty-seven priority issues from 2004 have been carried
    over to the 2005 White Paper, and 32 new issues have been
    added.

    Human Resources - Internationalization
    --------------------------------------

    ¶4. (U) Many of the human resources-related recommendations
    in the 2005 White Paper would enable firms operating in
    Taiwan to hire more foreign employees, including PRC
    nationals - both to relieve manpower shortages and
    internationalize the workforce.  The paper urges the
    government to eliminate the two-year work experience
    requirement for work permit applications and to allow
    companies to pay foreign interns.  Amcham also urges the
    government to convene a high-level interagency meeting to
    work out policies to facilitate hiring of PRC technical
    personnel.  In addition, it recommends several measures to
    expedite short-term visits by PRC nationals working for
    multinational companies and the establishment of direct
    transportation links.

    Health - IP Protection and Market Access
    ----------------------------------------

    ¶5. (U) Amcham's health-related recommendations address
    intellectual property concerns or barriers that limit
    market access for U.S. pharmaceuticals and medical devices.
    All of the priority issues identified by Amcham's Agro-
    chemical Committee are intellectual property concerns, such
    as trademark infringement and the smuggling of patent-
    protected products.  Amcham highlights the health risk
    posed by counterfeit agro-chemicals.  The Pharmaceuticals
    Committee also offers three industry requests related to
    intellectual property, including more resources for the
    surveillance and investigation of counterfeit drug sales as
    well as stronger sanctions for violators.

    ¶6. (U) Most of the remaining health-related issues concern
    the registration and approval processes for drugs and
    medical devices or problems in the national health system
    that discourage the purchase of U.S. medical products,
    including innovative pharmaceuticals.  Approval and
    registration problems include plant inspection requirements
    for pharmaceutical manufacturers and the ability of the
    Department of Health to efficiently process registration
    applications for medical devices.  Concerns about the
    national health system are centered on the Bureau of
    National Health Insurance's implementation of the "global
    budget" system, which seeks to limit hospital spending, but
    has had the perverse effect of encouraging hospitals and
    clinics to seek additional resources by demanding steep
    discounts from medical supply and pharmaceutical companies,
    creating a bias towards prescribing generic drugs, and
    encourages the practice of reusing single-use medical
    devices.

    Other Issues
    ------------

    ¶7. (U) The Banking, Capital Markets and Insurance
    Committees together name 14 priority issues for Taiwan's
    financial sector.  Many identify very specific problems in
    Taiwan's regulatory regime.  However, some of the
    recommendations ask for broader changes, reflecting the
    continuing need for substantial reform.  These include
    passage of the draft Unified Reorganization and
    Bankruptcies Law, which would help create an effective
    mechanism for identifying insolvent companies that can be
    successfully reorganized; passage of a Finance Company Law
    to allow non-bank lenders to take a more active role in
    Taiwan's financial markets; and allocation of funds for the
    Financial Reconstruction Fund and other measures to address
    non-performing loan issues.  (Note:  Ref C reports on the
    May 31 passage of legislation allocating funds to the FRF,
    though only 10 percent of what had been requested, to
    resolve nonperforming loan issues. End note.)

    ¶8. (U) Regarding Taiwan's infrastructure, Amcham's 2005
    recommendations focus on government procurement.  The
    Infrastructure Committee asks Taiwan unilaterally to agree
    to abide by the conditions of the WTO's Government
    Procurement Agreement.  It also asks Taiwan to revise its
    standard procurement contract to follow international
    standards that would encourage more foreign participation
    in government tenders.  (Note:  Ref B reports on complaints
    by Taiwan officials that the White Paper did not recognize
    some steps that Taiwan took in 2004.  End Note.)  In
    addition, both the Infrastructure and Chemical
    Manufacturers Committee offer recommendations related to
    Taiwan's power system, asking for enhanced energy security
    through increased emphasis on coal and capital investment
    that would produce a more reliable supply system.

    ¶9. (U) The Chemical Manufacturers and Environmental
    Protection Committees both recommended revision of the Soil
    and Groundwater Pollution Remediation Act, identifying the
    assessment system and fees for environmental clean up as
    problems with the current Act.  In addition, both
    committees requested that Taiwan improve its emergency
    response system for chemical accidents.  The Environmental
    Protection Committee also asked the Taiwan government to
    develop a clear and long-term strategy for complying with
    the Kyoto Protocol for greenhouse gases.

    ¶10. (U) Other important recommendations include two
    Telecommunications Committee requests.  It asks that Taiwan
    complete the establishment of the National Communications
    Commission that would act as a regulator for
    telecommunications and broadcasting and that Taiwan finish
    the privatization of Chunghwa Telecommunications, the
    island's dominant telecommunications service provider.  The
    Transportation Committee offered several specific
    recommendations for Taiwan's Customs procedures as well as
    measures to improve the ability of express delivery firms
    to make local deliveries.  The Committee also recommended
    that Taiwan follow international standards for compensation
    in cases of flight delay due to forces beyond the control
    of air carriers (reported ref A).  Finally, Amcham's new
    Education Committee identified several barriers that
    inhibit the ability of foreign firms to compete in Taiwan's
    market for private education.

    Comment - A C-minus Student
    ---------------------------

    ¶11. (SBU) If the 2005 White Paper were a report card,
    former honor student Taiwan would be falling behind most of
    its class.  The fact that Amcham's overall recommendations
    have barely changed in the last three years is symptomatic
    of the Taiwan government's difficulty in dealing with the
    new challenges facing its maturing economy and the unique
    problems caused by cross-Strait tensions.  The few bright
    spots like progress on intellectual property protection are
    sadly overshadowed.  Many of Amcham's recommendations,
    especially in human resources, would help the Taiwan
    government achieve some of its own economic goals, such as
    developing Taiwan as a regional operations and logistical
    hub.  If the Taiwan government does not increase the pace
    of progress on these issues it risks falling behind its
    competitors in the region.  AIT/T will continue working
    with Amcham and the Taiwan government to address these
    important issues.  End comment.

    ¶12. (U) The 2005 White Paper can be downloaded at
    www.amcham.com.tw/publication wp.php.
    PAAL

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