The annual talks under the U.S.-Taiwan Trade and Investment Framework Agreement (TIFA) provide an invaluable platform for high-level dialogue on relevant issues in the interest of further strengthening the bilateral economic relationship.
The Taiwan delegation to these TIFA Council meetings is headed by a Vice Minister of Economic Affairs and the American side by a Deputy U.S. Trade Representative.
The 2015 TIFA Council is expected to be held in Taipei early next month. Although that will be somewhat later in the year than customary due to some scheduling difficulties, this year’s meeting is likely to take on unusual significance. During AmCham Taipei’s Doorknock visit to Washington, D.C. this June, one of the main topics of discussion was the importance for Taiwan of gaining second-round entry into the forthcoming Trans-Pacific Partnership (TPP) trade grouping – and the need for Taiwan to clearly demonstrate its commitment to principles of free and fair trade in order to assure solid U.S. government support for its eventual TPP candidacy.
For many in Washington, the degree of success of the TIFA Council session will surely be taken as a critical gauge of Taiwan’s “readiness” for TPP. How should that success be measured? It would be unrealistic to expect quick resolution of all – or the most sensitive – of the outstanding bilateral trade issues. Instead, it will be vital to see material progress on a number of key issues, plus a productive dialogue between the two sides to identify paths forward for solving the remaining problems.
AmCham Taipei considers that the prospects for a positive TIFA Council should be excellent. On several key issues of concern to the Taiwan-based U.S. business community, the Taiwan delegation will be able to report constructive initial developments. With support from the Taiwan Intellectual Property Office, for example, the Taiwan Food and Drug Administration is at work on creating a pharmaceutical patent database to serve as the basis for a system to ensure effective IPR protection for original drugs until their patents expire. With encouragement from the National Development Council, two government agencies that independently started to establish registration systems for new chemical products – the Environmental Protection Administration and the Ministry of Labor – have made an effort to harmonize their regulations and procedures.
Further, the Investment Commission and the Financial Supervisory Commission have been seeking to make the foreign-investment approval process more transparent in terms of the consistency and specificity of the criteria being applied. And the Taiwan authorities have sought to improve trade-secret protection through improved legislation and enforcement mechanisms.
In all of these areas, there has been good news. What will be needed at TIFA is to take these and similar initiatives to a new level by outlining a firm timeline and concrete measures to bring the objectives to reality.
The TIFA Council discussion is also likely to include an examination of the root causes for many of the difficulties that arise in Taiwan’s regulatory system. One is the frequent disregarding of standard international practice to adopt unique-to-Taiwan rules that affect the cost and ease of doing business. Another is the lack of sufficient transparency and consultation with stakeholders in the rules-making process. Thankfully, the Taiwan authorities have shown an awareness of these issues and a willingness to address them.
As a result of these hopeful signs, AmCham looks forward to the upcoming TIFA talks as a prized opportunity that must be taken full advantage of.