An Eye on the USTR Agenda

An annual report lists Taiwan-related trade issues being followed in Washington.

Early each year, the Office of the U.S. Trade Representative (USTR) releases a country-by-country Report on Foreign Trade Barriers. The nine-page Taiwan section for 2020 provides a concise statement of the main areas of U.S.-government concern regarding elements of the bilateral trade relationship.

Taiwan’s restrictions on the import of certain U.S. beef and pork products, particularly those containing the leanness-enhancing feed additive ractopamine, continued to be among the main outstanding trade issues. On numerous other issues, USTR’s comments frequently reflected input from relevant AmCham Taipei committees. These included:

Medical devices. USTR cited the persistence of “longstanding concerns…over Taiwan’s systems for medical device product license approvals and pricing review mechanisms.” A primary example was “documentary requirements that effectively limit the number of products eligible” for a simplified application process of regulatory review of medical devices. Other examples dealt with limitation to self-pay and balance billing (partial self-pay) mechanisms to provide access to high-end devices or new technologies not fully covered by National Health Insurance reimbursement to hospitals.

Pharmaceuticals. “U.S. industry stakeholders continue to underscore the need for greater transparency and predictability in Taiwan’s pricing and reimbursement policies for pharmaceuticals, including innovative pharmaceuticals,” said USTR. It referred to U.S. industry suggestions for reform of the Drug Expenditure Target (DET) system to address such matters as the “inconsistent treatment of different forms of patented pharmaceutical products in price adjustments” and the mode of calculation of annual drug expenditure targets.

Agrochemicals. “The Taiwan authorities’ slow process for establishing MRLs (maximum residue levels) for pesticides, low number of approved MRLs, and zero tolerance policy for pesticides without established MRLs have resulted in U.S. shipments being stopped at ports of entry and has dissuaded some trade due to the high risk of rejection,” the report noted. It said the U.S. would encourage Taiwan to “continue to improve the speed, efficiency, and transparency of its MRL regulatory system to facilitate trade.”

Intellectual Property Protection. While crediting Taiwan with positive developments regarding pharmaceutical patent linkage, strengthening of the Copyright Act, and amendments to the Trade Secrets Act, USTR pointed to remaining challenges, “particularly with respect to online piracy.” 

Transparency. Calling it a positive step toward improving regulatory transparency, the Report mentioned Taiwan’s 2016 extension of the mandatory notice-and-comment period from 14 days to 60 days for proposed laws and regulations originating in executive agencies and related to trade, investment, or intellectual property rights – an initiative that AmCham Taipei had strongly supported. USTR noted, however, that implementation of the 60-day rule has been inconsistent.

The above are some of the issues likely to be covered as part of the Trade and Investment Framework Agreement (TIFA) process between Taiwan and the U.S. The high-level TIFA Council talks – negotiations between delegations led by the Deputy U.S. Trade Representative and Taiwan’s Vice Minister for Economic Affairs – have not been held since 2016. Even before the disruption of the coronavirus pandemic, no schedule had been announced for resuming the talks. Nevertheless, it should be possible for working-level discussions between the two sides to continue, most likely by video conference.