Abstract

New regionalism is sweeping the world making regional trade integration an irreversible global trend that countries like Taiwan must meet head on. A significant problem for Taiwan is that its competitors, such as Japan, South Korea, and ASEAN countries, enjoy a host of tariff preferences. All the above poses a very real threat of trade diversion and thus unfavorable economic outcomes for Taiwan. By using a case study, this article investigates how Taiwanese firms can develop new tax strategies through Chinese suppliers’ VAT (Value Added Tax) refunds by introducing business process reengineering (BPR), which will reintegrate current cross-strait trade routes and efficiently integrate Taiwanese corporations with the commercial flow and logistics of mainland-based trade. The main research objectives are 1. Explore the current situation for trade routes and logistics distribution of an individual company that does procurement on the mainland. 2. Under the influence of ECFA (Economic Cooperation Framework Agreement), analyze how Taiwanese companies can effectively integrate commercial flow and logistics. The result of this study shows that reengineering the trade flow with a trade procurement platform allow case company significantly lower procurement-related costs, compared to direct trading, a 13.9% costs reduction for import prices makes the advantage quite clear. The main contribution of this study is helping trade managers to reintegrate a company’s internal trade process(es) and build a trade procurement platform that complies with current trade policy restrictions to reduce business operations-related costs, and raise the competitiveness of a product’s price.

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