Taiwan Making Progress towards TPP Readiness

Taiwan’s two main political parties, the Democratic Progressive Party (DPP) and the Kuomintang (KMT), which recently reversed roles as the governing and opposition parties, have widely diverging positions on many issues. But on one point they are firmly in accord: the need for Taiwan to maintain its economic competitiveness by readying itself for eventual participation in the Trans-Pacific Partnership (TPP) trade bloc, the Trade in Services Agreement (TISA) being negotiated in Geneva under the World Trade Organization, and other free trade agreements.

The previous Ma Ying-jeou administration had begun a process of identifying and addressing gaps between TPP standards and Taiwan’s existing laws and regulations. Now the government of Tsai Ing-wen is continuing the process, and AmCham Taipei finds it encouraging that some concrete results are beginning to emerge:

Patent Linkage for pharmaceuticals.

In principle, a generic drug should not be able to enter the market while the original product still holds a valid patent, but Taiwan has lacked an effective administrative mechanism to prevent that abuse from occurring. The need for a system to link new-drug licensing with patent protection has long been an issue in the Chamber’s annual Taiwan White Paper, and it has also been taken up in the U.S.-Taiwan bilateral negotiations known as the TIFA talks (for the Trade and Investment Framework Agreement under which they take place). After many years with no progress on the issue, Taiwan’s Ministry of Health and Welfare, with assistance from the Taiwan Intellectual Property Office (TIPO), over the past two years has succeeded in designing what should be an effective Patent Linkage system to resolve the problem. The Executive Yuan has accepted the plan, and final approval will now be up to the Legislative Yuan.

Copyright protection.

Although comprehensive reform of the Copyright Law is still in process – a fourth draft of proposed revisions is now under review by the Ministry of Economic Affairs – the government in the meantime has fast-tracked a set of new amendments aimed at bringing much of Taiwan’s copyright regime in line with TPP provisions (an unfortunate exception is extension of copyright coverage to 70 years after the author’s death, which was not included). Under the proposed changes, for example, prosecutors would have more scope to initiate criminal proceedings against offenders in copyright cases, even without a complaint having been lodged by a rights-holder. In addition, it would become a crime to circumvent technological protection measures – such as the encoding on a DVD – designed to prevent the duplication of copyrighted materials.

Postal legislation.

Among areas identified as problems by the TPP gap analysis were portions of the Postal Act that might impinge on the business of express delivery carriers. When an initial draft amendment by the Ministry of Transportation and Communications still raised concerns from industry, AmCham Taipei helped member companies in raising the issues with the authorities. The differences were resolved to the satisfaction of both sides.

Amendments to the Pharmaceutical Affairs Act to institute Patent Linkage, the fast-tracked Copyright Law revisions, and the amended Postal Act will all be on the agenda of the fall session of the Legislative Yuan that begins this month. AmCham Taipei hopes that Taiwan’s lawmakers will act expeditiously to complete the legislative process on these important initiatives. Passage of these bills is an opportunity for Taiwan to confirm its determination to participate actively in the international trading community by adopting high-level standards and best practices.

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