USTR lays out the issues regarding Taiwan and TIFA

With allowance for further updating, many of these items are likely to appear on the TIFA agenda.

Each spring the Office of the U.S. Trade Representative (USTR) issues a voluminous document called the National Trade Estimate Report on Foreign Trade Barriers, which assesses the openness of U.S. trading partners to American products and services. In the recently released 474-page report for 2016, eight pages are devoted to the U.S. trade relationship with Taiwan. The contents are a likely guide to issues that may be on the agenda at the next round of trade negotiations under the bilateral Trade and Investment Framework Agreement (TIFA), expected to take place next fall in Washington D.C.

A new item this year, which appears under the heading of Technical Barriers to Trade, refers to regulations that Taiwan promulgated in May 2015 requiring biotechnology labeling for prepackaged foods, food additives, and unpackaged foods. “The regulations cover highly refined foods that are ‘directly’ manufactured using biotechnology crops,” the report notes. “For example, Taiwan has said corn syrup made of biotechnology corn must be labeled GE (genetically engineered), whereas a beverage made with corn syrup is exempt from GE labeling.”

According to USTR, it has raised several issues of concern with its Taiwan counterparts, including “the lack of scientific basis for these labeling requirements, the potential impact on trade, and lack of clarity with respect to implementation.” The report also notes that in December last year the Taiwanese legislature amended the School Health Act to “ban the use of biotechnology food ingredients and processed foods with biotech ingredients in school meals” – but that “Taiwan has not provided any scientific basis for this ban.”

A number of other potential technical barriers to trade were cited:

  • Cosmetics labeling. Proposed amendments to the Cosmetic Hygiene Control Act have raised concerns that required pre-market documentation might put confidential business information (CBI) at risk, and that the transition from pre-market approval to a post-market surveillance system would create a duplicative compliance burden.
  • Chemical registration. Although the Ministry of Labor and the Environmental Protection Administration have taken steps to harmonize their respective registration systems for chemical products, USTR has continued to raise questions about procedures related to CBI protection, as well as the duration of that protection.
  • Organics. The report noted that Taiwan’s zero-tolerance policy for chemical residues on products labeled as organic “does not take into account unintentional environmental contamination,” which impedes U.S. organic exports to Taiwan and subjects organic products to “additional and random testing or screening.”
  • Beef and beef products. Imports into Taiwan of certain U.S. beef products, including ground beef and internal organs, remain banned under amendments to the Food Sanitation Act passed in 2010 despite a previous bilateral protocol fulling opening the market. Even some eligible items are discouraged through licensing or heavy inspection requirements. According to the report, “the United States will continue urging Taiwan to open its market to U.S. beef and beef products based on science, World Organization for Animal Health (OIE) guidelines, the United States’ negligible risk status, and the beef protocol.
  • Ractopamine. USTR noted that Taiwan in September 2012 adopted a maximum residue limit (MRL) for ractopamine in beef muscle cuts consistent with the international standard set by the Codex Alimentarius Commission, but has not implemented an MRL for ractopamine in other beef products or in pork. It said “the United States will continue urging Taiwan to implement the remaining MRLs for ractopamine without delay.”
  • MRLs for agrochemicals. Another problem raised in the report is “Taiwan’s slow process for establishing MRLs for pesticides, low number of approved MRLs, and zero tolerance policy for pesticides without established MRLs” – a situation that has resulted in U.S. shipments stopped at ports of entry and other restrictions on U.S. agricultural exports to Taiwan.

Among the other categories covered in the report are:

  • Intellectual Property Rights Protection. USTR credited Taiwan with progress in providing effective responses to trade secrets misappropriation and moving toward enhanced patent and test-data protections for innovative pharmaceutical products. But it expressed concern over infringement of copyrighted material on the Internet, for example through file sharing and the use of unregulated media box or over-the-top (OTT) hardware that may facilitate access to pirated content.
  • Investment barriers. The report states: “In the October TIFA Council meeting, the United States raised the need for transparency and consistency in Taiwan’s investment review process. Taiwan authorities have proposed amendments to the Statute for Investment by Foreign Nationals that aim to bolster inbound investment, including by eliminating pre-investment approval requirements for investments under US$1 million. However, the Legislative Yuan did not approve the amendments before the conclusion of its 2015 session.”
  • Pharmaceuticals. In the report, the United States “encourages Taiwan to increase transparency and predictability in its pricing and reimbursement policies, while continuing to provide meaningful opportunities for input by relevant stakeholders with a view towards improving patients’ access while supporting innovation.”
  • Medical Devices. “Concerns persist over Taiwan’s product license approvals and pricing review mechanisms,” USTR said. For example, it noted industry dissatisfaction with the degree of documentary requirements for manufacturing facility registration, as well as complicated registration procedures for temporary self-payment codes and issues with transparency and due process in the balance billing mechanism.

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