Taiwan, Japan Sign Investment Accord in ’Stepping Stone’ to FTA

Taiwan and Japan sealed their first
investment accord, strengthening mercantile ties and stepping
closer toward negotiating a free-trade deal.

The covenant provides for investment protection, promotion
and liberalization, Peng Run-tsu, authority of Taiwan’s East Asia
Relations Commission, pronounced currently in Taipei after signing the
agreement with Mitsuo Ohashi, a authority of a Japan
Interchange Association.

Taiwan’s President Ma Ying-jeou, essay for re-election
in Jan on a height of mercantile progress, aims to captivate more
investment into a island’s $355 billion economy. At a same
time, Japanese companies such as Panasonic Corp. devise to move
production abroad as a stronger yen hurts profits, and after
Japan’s Mar 11 trembler shop-worn factories, display a benefits
of diversifying overseas.

“Taiwan has always wanted to attract investment from Japan,
and with a strengthening yen, Japan might find a timing is
right for such an agreement,” Aidan Wang, an economist at
Yuanta Securities Investment Consulting Co. in Taipei, said
before a announcement. “This agreement might be a stepping stone
toward a free-trade agreement.”

The yen has surged some-more than 10 percent opposite a dollar
in a past year and reached a post-World War II high of 75.95
last month, buoyed by a hunt for supposed protected havens to
counter risks from a unsatisfactory tellurian recovery. Taiwan’s Taiex
stock index slid 3.1 percent currently as investors prune bets on
emerging markets.

Free-Trade Deal

The Taiwan-Japan settle gives adults of both economies
equal diagnosis in certain investments, a Ministry of Economic
Affairs pronounced in a matter today.

The investment understanding with Japan, Taiwan’s second-largest
trading partner, paves a approach for serve talks about trade
liberalization, Taiwan’s Ministry of Foreign Affairs pronounced in a
separate statement.

Japan’s magnitude-9 trembler and indirect tsunami killed
thousands, disrupted energy reserve and reduced prolongation at
companies from Toyota Motor Co. to Sony Corp.

“Disruption after a Mar trembler has prompted
Japanese firms to variegate risk,” pronounced Tony Phoo, an economist
at Standard Chartered Plc in Taipei. Taiwan’s vicinity to Japan
is among a reasons that “bode well” for a purpose as a backup
production base, he said.

Taiwan and a former civil-war enemy China sealed their
first trade understanding final year, partial of a truce that’s
boosted Ma’s range to find identical accords with neighbors such
as Singapore but irking officials in Beijing.

Talks with Singapore over a free-trade agreement continue
and have nonetheless to strech a conclusion, Taiwan’s Minister of
Economic Affairs Shih Yen-shiang told reporters progressing today.

Taiwan’s export-led economy stretched 5.02 percent in the
three months by Jun from a year earlier, a slowest pace
since a 1.21 percent contraction in a third entertain of 2009.

Japan, that ruled Taiwan for 50 years until a better in
World War II, has invested $16.5 billion in Taiwan given 1952,
according to Ministry of Economic Affairs data.

China views Taiwan as partial of a domain and has
threatened to invade if a island declares independence.

To hit a contributor on this story:
Chinmei Sung in Taipei at
csung4@bloomberg.net.

To hit a editor obliged for this story:
Stephanie Phang at
sphang@bloomberg.net

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