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Federal Register Comments Regarding the U.S.-Taiwan Initiative on 21st Century Trade

On June 1, U.S. and Taiwan authorities launched the U.S.-Taiwan Initiative on 21st Century Trade. The following week, The Office of the United States Trade Representative (USTR) solicited public comments on the Initiative to develop U.S. negotiating objectives and positions for talks expected to begin quickly. After notifying all AmCham members of the opportunity to comment and providing a survey site for input, our comments were uploaded to the official site on July 8, the final day for submissions. Thanks for your support and interest, and please continue to watch this space for related content.

 

Submitted July 8, 2022 in response to USTR request

Amended July 15, 2022 for posting on AmCham Taiwan website

 

AmCham Taiwan enthusiastically welcomes the U.S.-Taiwan Initiative on 21st Century Trade (the Initiative) and the opportunity to offer our recommendations on its design and content. This fourth platform for bilateral economic engagement to be initiated in a year comes at a historic juncture for Taiwan and the U.S.-Taiwan relationship. The Initiative offers an exceptional opportunity to enhance U.S. economic security and national security by bolstering a critical partner in the Indo-Pacific and generating trade and investment enhancing understandings. These understandings or “chapters,” in turn, should be replicated in multilateral discussions, driving U.S.-led trade liberalization in a more resilient global trade architecture.

To concretely deepen the U.S.-Taiwan trade and investment relationship as called for by U.S. Trade Representative Katherine Tai and Minister Without Portfolio John Deng, Taiwan’s chief trade negotiator, on June 1 when the Initiative was launched requires ambition and a sense of urgency, backed by political commitment from both U.S. and Taiwan governments, as well as support from private sector groups including AmCham Taiwan.

Specifically, as an end-product the negotiators should incorporate several understandings or chapter-agreements, in addition to addressing discreet economic barriers, structural problems – and success stories – in the relationship, within the 11 pillars envisioned in early June to organize the negotiations. Below, we recommend three topics for consideration as chapters. Finally, AmCham Taiwan suggests that the 11 categories be supplemented by additional pillars, beginning with Intellectual Property Rights, an important facet of a relationship grounded in technology.

First, AmCham Taiwan calls on the Initiative to not only promote digital tools to facilitate U.S.-Taiwan trade but to produce a Digital Trade Agreement that will serve as a global gold-standard DTA. It should target a regionally suited set of rules that will be more dynamic, inclusive, and beneficial to workers and small-and-medium enterprises. That chapter could then serve as a template for a multi-party agreement under the Indo-Pacific Economic Framework Agreement, as well as spur negotiations in the World Trade Organization (WTO).

The agreement would leverage U.S. experience in leading digital trade building blocks within the draft TPP, U.S.-Japan DTA, and the U.S.-Mexico-Canada Agreement (USMCA). It could draw from third-country innovations found in a pair of recent accords to which Singapore is party. Most importantly, it would leverage Taiwan’s successes in applications around e-government, SME and worker inclusion, disinformation control, and non-intrusive use of data in the service of public health, as well as Taiwan’s recent progress in setting up a digital affairs ministry – or recent challenges and lessons learned in drafting its forthcoming Digital Services Act. Given Taiwan’s prowess in a host of emerging technologies such as AI, the Initiative is positioned to break ground in writing the rules for ethical AI collaboration in the mode of the recent Singapore-Australia framework. Specific elements are spelled out in the next segment of AmCham comments, below, which outline commitments regarding cross-border data flows, eschewing localization requirements, promoting interoperability of privacy regimes and norms on cybersecurity, and non-discriminatory treatment of digital products.

Second, the U.S.-Taiwan Initiative should draw upon the rich legacy of U.S.-Taiwan collaboration in healthcare and, increasingly, life sciences to craft a model for collaboration in pandemic control and wider public health action. The COVID-19 experience spotlighted the extent to which U.S. prowess in medical innovation can be complemented by Taiwanese skill in sustained, painstaking attention to detail in implementing a care and control regime. What is needed is a set of rules around transparency, confidentiality, and IP protection to facilitate still more such collaboration, including the facilitation of more clinical work in Taiwan that would spur the uptake of medical innovation. Taiwan should also engage in more public education of chronic diseases (e.g., osteoporosis prevention), as well as prevention of cancer caused by high prevalence infectious diseases (e.g., liver cancer prevention through management of hepatitis B and C). This model agreement would draw upon work in several of the 11 pillars initially envisioned for the Initiative, supported by the preceding DTA chapter, which would better leverage patient data with state-of-the-art privacy protections.

Third, the Initiative should aim at pathbreaking work on technology management and control that safeguards U.S.-Taiwan and like-minded nations’ values and competitiveness, while allowing for prudent, protected engagement with actors and economies that do not fully share those values. Again, Taiwan, through its experience in coping at close range with predatory commercial practices, as well as its capacity to earn trust as a supplier and technology developer places it uniquely among U.S. partners able to help jointly craft a framework for trusted, strategic trade. Keen observers of Taiwan have noted that this country can compensate for its lack of scale with its surplus of hard-won trust. The USTR should work out rules that, in the United States’ own interest, bolster this capacity for key partner Taiwan. This workstream would likely require integrating discussions around in- and out-bound investment screening and export control regulation, as well as work being led by the Commerce Department on supply chain strengthening.

A focus on preparing a Digital Economy Chapter – with its treatment of standards on data protection (including cybersecurity) and privacy – will be singularly important to making progress on technology management. Along with robust IPR protection rules and enforcement in both countries, USTR and Taiwan’s Office of Trade Negotiations can develop a powerful model of trusted partnership both for U.S. economic interests directly and for ensuring Taiwan’s continued prosperity and security. The Initiative represents an enormously important opportunity to pursue a comprehensive approach to technology and commerce that embraces enforceable commitments, new market opportunities, and the wide adoption of high standards, particularly for trade facilitation.

Following is more detail on our proposals:

1. Digital Trade

We welcome and support the US-Taiwan Initiative. Strong bilateral ties have grown increasingly important to both parties in recent years, as trade with Taiwan is essential to U.S. tech competitiveness and U.S. support is critical to Taiwan’s long-term development. In order to build strong cooperation, it is essential that the Initiative includes digital trade rules and standards which would facilitate the growth of digital trade and commerce between the U.S. and Taiwan.

We call on the Initiative to build on the digital trade rules in the U.S.-Mexico-Canada FTA (USMCA) and the U.S.-Japan Digital Trade Agreement, in considering the digital trade disciplines. In setting the framework and direction for the Initiative, parties should be guided by longstanding trade principles of non-discrimination, transparency, openness, and interoperability. It is important for the Initiative to include a core set of high-quality digital rules and commitments which are binding and enforceable. The value of such rules is reduced when they are not enforceable and when Taiwan cannot be held accountable should it run afoul of its commitments. There should be no broad exceptions or derogations from these rules as we have seen in RCEP and some European digital trade proposals. Should there be a need for an exception, there should be a GATS-style necessity test and relevant criteria laid out, with no broad, self-judging loopholes.

The need for flexibility should be addressed by allowing for phased-in implementation rather than carve-outs. The Initiative should be a “living framework” with built-in review mechanisms to ensure that the rules and initiatives are kept up-to-date and relevant. In developing and negotiating the Initiative, robust and regular stakeholder consultation, including with small businesses and underserved communities, should be conducted.

Eliminate Barriers to Digital Products

The Taiwan government will propose new regulations that require OTT services to register with the government, identify permanent local representatives, disclose proprietary information, and commit to local investments. Otherwise, they will be restricted from providing internet access to the public.

In the absence of legitimate and necessary public policy objectives, the Taiwan government should not impose mandatory investment obligations, prohibit, or restrict the cross-border transfer of information. Necessary and legitimate objectives may include those involving electronic transactions, reasonable consumer protection mechanisms, personal information protection, communications security, cybersecurity, intellectual property rights, criminal law enforcement, and protection against deceptive practices. Objectives motivated by public opinion or politics by themselves do not constitute a legitimate and necessary interest. In making a case for serving legitimate and necessary public policy objectives, the government will also need to determine whether alternative measures achieve the stated objectives, are proportionate to the objective, and do not result in unjustifiable discrimination (either de jure or de facto).

Taiwan’s deliberations on laws and regulations involving digital policies often skew toward the protection of domestic markets, while placing unequal burdens and responsibilities on U.S. players under the disguise of policy catchphrases such as “regulating the big players” while domestic players run free or conducting a ‘light-touch environment” in which the major foreign players succumb to additional oversight and involuntarily submission of companies’ proprietary business information. Arbitrary rules (such as disclosure of trade secrets or local investment requirements) only apply to major foreign companies, leading to heavier oversight and extra responsibilities applied to major U.S. digital companies in Taiwan. Resistance to such instructions by the government (or external government-assigned entities) may then be deemed as being noncompliant, causing disruptions to the cross-border transfer of information.

Parties to the Initiative should commit to removing trade barriers (such as localization requirements and blocking of internet services) on digital products, such as OTT TV services.

Foster trust in the digital economy

We believe that within a priority focus upon Digital Economy, standards on data protection (including cybersecurity) and privacy are singularly important for both parties.  Along with robust IPR protection rules and enforcement in both countries, the USTR and OTN can develop a powerful model of trusted partnership around technology management with Taiwan, a uniquely equipped and strategically positioned partner.

It has been noted that trust is Taiwan’s pivotal commercial advantage, and this strength can be instrumentalized for both U.S. economic interests, directly, and securing Taiwan’s continued prosperity and security. Trust is fundamental to the growth and development of the digital economy and cross-border digital transactions. The initiative should promote cooperation on privacy, cybersecurity, and trust in data flows, while ensuring that businesses can transfer data across borders through interoperable data transfer mechanisms.

Digital Financial Services

The Initiative should promote transparency on regulation and regulatory processes, and this should also be applied to regulations made by self-regulatory organizations. Regulations should be harmonized with the standards set by international standard-setting bodies, such as the FSB, BCBS, IOSCO, IAIS and CPMI.

With regard to cross-border financial services business, as long as the financial regulatory authorities have ongoing access to required information being processed, neither party to the business shall require the use or locating of financial service computing facilities in that party’s territory as a condition for conducting business in that territory or subject the institutions involved to cumbersome pre-approval requirements. The Initiative should make this principle explicit.

The Initiative should include a clause eliminating unnecessarily different treatments to domestic and foreign financial institutions as regards the standards for the use of outsourcing and third-party services.

Digital Standards

The initiative should include commitments to adherence to internationally recognized standards for cloud services certification procedures, such as the ISO 22301 and 27000 family of business continuity and information security management standards, as well as the SOC 2 service organizations standards published by the American Institute of Certified Public Accountants (AICPA), so as to support security, availability, processing integrity, confidentiality, privacy, and business continuity.

Digital Taxation

The Initiative should include a commitment not to enact unilateral measures such as expanding the current taxing mechanism for foreign electronic service providers to include sales to Taiwan B2B customers, nr enacting a different unilateral Digital Service Tax. Refraining from enacting such measures will give the OECD process time to work.

2. Healthcare / Public Health

AmCham Taiwan’s continuous advocacy efforts over the years has brought positive outcomes in strengthening the U.S.-Taiwan relationship, especially on trade issues. However, market access issues in the healthcare sector, such as insufficient funding for innovations (new products, new indications, etc.) and the limited scope of patient access under the National Health Insurance reimbursement scheme, are not among the 11 categories outlined in the 21st Century Initiative. Addressing these issues is critical to enabling the healthcare industry to be recognized as one of the growth pillars of the Taiwan economy and to attract private-sector investment. The barrier to access for innovative treatment represents a triple loss: from the perspectives of 1) patients’ health, 2) healthcare industry development, and 3) Taiwan’s ability to compete against neighboring markets.

To strengthen the U.S.-Taiwan partnership and increase trade in the healthcare industry, we believe that the Initiative should address transparency and good regulatory practices, which are the infrastructure for an investment-friendly environment. Taiwan has adopted the use of Managed Entry Agreements to accelerate patient access to innovative treatment; however, as time goes by, the lack of confidentiality, transparency, and due process for decisions in the reimbursement scheme to increase the risk of revealing trade secrets and uncertainty is a matter of urgent concern in the pharmaceutical industry. We are requesting the Taiwan government to engage with relevant stakeholders as soon as possible, particularly with industry representatives to revise relevant pricing and reimbursed-related regulations to protect business secrets. We recommend that both parties address these challenges and find solutions with the vision of establishing a more transparent, time-sensitive, and value-based pricing and reimbursement system for innovative medicines.

We further suggest that the Initiative highlight the issue of public health, which is essential to workers’ rights and a well-rounded trade policy. The Initiative could aim to have governments recognize the important role of public health policy in economic activity, encourage administrations to take actions to ensure broad and timely access to health-related essential goods like vaccines and PPE, empower people with health knowledge, and be prepared to protect workers in possible future pandemics.

The COVID-19 pandemic has brought public awareness of the importance of adult vaccination to an unprecedented level. The WHO has also recognized the value of life-course vaccination in its Immunization Agenda 2030. However, persistent vaccine hesitancy is still posing a significant challenge to governments’ response to the pandemic. As raised in AmCham White Papers over the past five years, the industry believes that a crucial factor in vaccine hesitancy is a lack of sufficient public understanding of vaccines. Such misunderstanding could be alleviated by cutting red tape around disease-awareness campaigns on adult vaccination, codifying good regulatory practices that give pharmaceutical companies more certainty and space for sponsoring educational programs and advertisements on mass media. Relevant U.S. regulations could serve as a good benchmark.

A feasible standard/guidance is needed to expedite the accessibility of new devices by introducing more flexibility in granting “non-reimbursed (self-pay) code” or clearly stating not reimbursed by NHIA rather than asking for solid evidence to demonstrate therapeutic superiority, thereby deferring the accessibility of new devices.

3. Legitimize the chiropractic profession in Taiwan

Over the years, the U.S. government has intermittently raised the issue of the unfair treatment in Taiwan of chiropractic doctors, nearly all of whom are graduates of American chiropractic colleges and hold U.S. licenses. The issue has at times been raised in the bilateral TIFA talks and, under the heading of “Services Barriers,” USTR’s 2008 National Trade Estimates Report stated: “Taiwan does not license or recognize chiropractors as legitimate medical practitioners and allows chiropractors to practice in Taiwan only if they do not advertise their services and make no claims about the results or efficacy of treatments.” (Even operating a website in prohibited). Little progress has been made since then, despite appeals to the Taiwan authorities by the 15,000-member American Chiropractic Association and the WHO-affiliated World Federation of Chiropractic. The ACA, WFC, International Chiropractors Association, and the Southern California University of Health Sciences have separately submitted comments on Regulations.gov in support of this position.

While nearly every other market in the world has found a way to accommodate the chiropractic profession, Taiwan continues to be an outlier in this respect. In fact, the status of chiropractic is the longest single unresolved issue in the American Chamber of Commerce in Taiwan’s annual White Paper, dating back well over a decade. For many years, agricultural issues (especially trade in pork and beef) have either dominated the TIFA agenda or kept the negotiations from being held at all. The Initiative provides an opportunity to revive the chiropractic issue with more consistency as a matter of fair market access and harmonization with international norms and practices.

Those principles aside, resolution of this issue would bring practical benefits for the U.S. economy, including the enrollment of more Taiwanese students at American chiropractic colleges and the import of U.S.-made specialized chiropractic equipment into Taiwan. As Taiwan enters the stage of a “superaged society” with attendant healthcare challenges, support for the chiropractic profession would also be in Taiwan’s own interest. The chiropractor members of the American Chamber of Commerce in Taiwan appeal to the U.S. government to help end the logjam on this issue by including it in the Initiative discussions with Taiwan.

4. Regulatory practices and standards

Over the years Taiwan has continuously improved its regulatory system and accelerated digital transformation, but too much of the policymaking still involves creating industry regulations and standards unique to Taiwan and often more restrictive than those of international counterparts. Many U.S.-based companies continue to face obstacles to regulatory transparency in such areas as the assignment of import licenses, a lack of contract enforcement, and opaque government procurement processes. We recommend that government agencies provide yet more extensive and transparent consultation processes, making sure to invite industry representatives to participate in policy discussions from an early stage.

 

Transparent Development of Regulations

In developing laws and regulations, the Taiwan government often simply provides the title and text of the draft regulation, along with a legislative explanation of the law. Development of the regulation lacks transparency due to the inconsistent provision of necessary context regarding the regulatory impact assessment, the objectives of the law and how the regulation would achieve such objectives, the rationale for material features of the law, and any alternatives that have been considered. Simply referring to actions by other countries by itself is not a valid and transparent response to why a policy needs to be developed. The Taiwan government often attempts to make up for these information gaps by conducting a town hall meeting or open hearing. However, without the publication of critical information from the onset, public policy discussions and draft law deliberations in Taiwan are often overtaken by external and sometimes biased political pressures, which then become a reality at the regulatory authority level, causing public policy objectives to become distorted.

Further, the Taiwan government is highly reluctant to take on retrospective reviews for fear that political enemies and unfriendly media may criticize any resulting changes as a sign of incompetence in the initial drafting of the law or regulation. The impact is especially acute regarding digital trade because innovation and technological advancement causes change to occur in that sector at a particularly fast pace.

Another problem is that the Taiwan government tends to adhere to a 60-day comment period for publication of a draft law, even though some issues are extremely complicated and require further internal discussions between the U.S. and Taiwan teams of professionals. In other instances, multiple draft laws affecting digital platforms have been scheduled for publication at the same time, while still affording the public only 60 days to comment. The Taiwan government has rarely allowed a period longer than 60 days, even expressing fear of being accused of having ulterior motives for making an exception. This constraint has prevented U.S. businesses from sharing their first-hand experiences, insights, and opinions to ensure that policy discussions are as well-informed as possible.

Parties to the Initiative should commit to a transparent process for the development of regulations – one that identifies a clear public policy objective, is supported by tangible fact-based evidence, and is deliberated thoroughly by relevant key stakeholders.

 

Trade Facilitation

Tariffs on agricultural trade: The US has long been Taiwan’s most important supplier of agricultural products, with 21.8% of Taiwan’s total agricultural imports coming from the U.S. in 2021. Still, U.S. companies are faced with unfavorable tariff rates – higher than those between most other Asian countries and U.S. – for certain American food products being imported into Taiwan.

Tariffs on food (single-member-firm position): Although the tariff issue is not covered in the 11 areas planned to be discussed under the Initiative, we would still like to convey our concerns and interests regarding this issue as the U.S. and Taiwan consider their next steps. In Taiwan, the goods “Other Food Preparations” under Tariff Number 21069099, including “Food preparation, in capsule of tablet form” (2106909920) and “Other food preparation” (2016909990), are given a tariff rate of 30%. Such high tariff rates result in high costs for AmCham members importing food products classified as “Other Food Preparations” under Tariff Number 21069099, in particular nutritional supplements that are one of the main products exported from the U.S. to Taiwan. Therefore, we strongly expect both governments to attach great importance to tariff issues around nutritional supplement products and include them in the upcoming discussions on deepening reciprocal cooperation on trade benefits.

 

Additional Issues for Consideration

Intellectual Property Rights Protection: The Initiative must enable the U.S. and Taiwan to enhance Taiwan’s IPR legal framework and enforcement practices through a dedicated pillar or initiative. We believe that further steps to provide adequate intellectual property protection in such areas as copyright protection and combatting online piracy would greatly benefit both parties’ stakeholders in a wide range of industries. We also suggest providing holistic and consistent protection for design patents.

Taxation: Drop shipping, in which finished goods are ordered from a contract manufacturer by one company but are shipped directly to a customer of that company, reduces shipping costs and increases efficiency. However, Taiwan’s Ministry of Finance discourages the use of drop shipping through its unique rule subjecting income from drop shipping to taxation in Taiwan, creating a potential problem of double taxation. Taiwan’s approach is illogical and has a serious impact on trade costs and efficiency in such sectors as semiconductors. We urge the U.S. government to begin laying the groundwork for a U.S.-Taiwan Double Taxation Treaty (DTA) to reduce withholding tax on payments from Taiwan to the U.S., and to meet both parties’ interest in diversification, smoothly operating supply chains, and enhanced competitiveness.

Semiconductor supply chains: Globally, much attention is placed on strengthening critical supply chains, beginning with the foundational and strategic semiconductor sector. Given Taiwan’s qualitative and quantitative predominance in the sector, Taiwan is a natural counterpart for a comprehensive bilateral semiconductor supply chain initiative, which could be initiated under the Initiative for later incorporation in a regional or comprehensive accord. The EU-U.S. Trade and Technology Council (TTC) is coordinating approaches to address supply chain issues, and participating firms have called for the TTC partners to look beyond their borders and engage Japan, Korea, and Taiwan when conducting semiconductor supply chain assessments. We also suggest that both parties ensure that semiconductor supply chain security measures and chipset security standards follow international practices. Taiwan has the most complete semiconductor ecosystem in the world and plays a key role in the global ICT supply chain. Developing internationally acceptable chip security norms and standards will further cement US-Taiwan relations through the semiconductor supply chain.  A comprehensive multi-sector agreement could strengthen supply chains through investment in quality infrastructure development, and enhance supply chain resilience through diversification, flexibility, redundancy, and multi-platform cooperation with Taiwan.

General Provisions

The need for flexibility should be addressed by allowing for phased-in implementation rather than carve-outs. The Initiative should be a “living framework” with review mechanisms to ensure that the rules and initiatives are kept up to date and relevant. In developing and negotiating the Initiative, robust and regular stakeholder consultation, including with small businesses, other affected businesses, civil society, and underserved communities, should be conducted to ensure that the framework is inclusive and considers the needs and challenges of a wide range of stakeholders.

In addition, parties should look to maximize transparency around negotiating texts.

 

Summary: Through the Initiative, USTR must reach beyond conventional approaches to drive the U.S.-Taiwan relationship forward. There are both deficiencies to address and models of success to be documented and shared. The Initiative is important not only in its own right but also as a bridge to comprehensive bilateral understandings (such as a future Bilateral Trade Agreement); the highly promising Trade and Technology Investment Cooperation framework (TTIC), with its focus on supply chains, investment, and the public-private partnership model; and multilateral arrangements such as the Indo-Pacific Economic Framework. USTR should approach the Initiative informed by opportunities for complementarity with discussions under the TIFA talks and/or the TTIC and the Economic Prosperity Partnership Dialogue. As the need for additional channels comes to light during Initiative talks – for example, on the avoidance of double taxation – USTR should share that with the public and work with the relevant agencies and Taiwan counterparts to advance those processes in concert.

 

About AmCham Taiwan

The American Chamber of Commerce in Taiwan (AmCham Taiwan) is an independent, nonprofit business organization established for 71 years in Taiwan and affiliated with the U.S. Chamber of Commerce, the largest business federation in the world.

Our Chamber regularly presents the views and interests of American business in Taiwan to the government of the United States, including the legislative and executive branches, state governments, business and professional associations, and the American people. We do this through our annual Business Climate Survey, Taiwan White Paper, Washington Doorknock visits, and support to both U.S. and Taiwan authorities through frameworks such as the Trade and Investment Framework Agreement (TIFA), as well as unofficial and official collaborative platforms, including the Technology Trade & Investment Collaboration (TTIC).

The IPEF train has departed. Now transferring to the BTA track

Although Taiwan is not included as a core member of the Biden administration’s new regional trade pact, it may now have an opportunity to conclude a U.S.-Taiwan bilateral trade agreement (BTA). AmCham President Andrew Wylegala and Senior Advisor Don Shapiro make the case for more concerted action in both Taiwan and on Capitol Hill in this op-ed for CommonWealth Magazine.

To read the full article, please go to The IPEF train has departed. Now transferring to the BTA track|Insight|2022-05-23|web only (cw.com.tw)

To download the article, click here.

Further reading in Chinese – 【獨家】沒被納入印太經濟架構 鄧振中:台美將開啟新一輪經貿談判

Building Momentum for a Taiwan-U.S. BTA

The current unprecedented opportunities for business and technological cooperation between Taiwan and the U.S. was the theme of a Taiwan-U.S. Business Roundtable this morning co-organized by the Chinese National Association of Industry and Commerce, Taiwan (CNAIC) and the American Chamber of Commerce in Taiwan. The event was held at the Palais de Chine Hotel.

In his opening remarks, CNAIC Chairman Por-Fong Lin recalled that a year ago this month the two sponsoring organizations issued a joint statement calling on the American and Taiwan governments to begin negotiations on a bilateral trade agreement (BTA). He noted that subsequent developments have improved the environment for taking that step and increased its importance.

Echoing that sentiment, AmCham Chairman CW Chin referred to the current situation as a “special moment in the relationship” between the two countries. The challenges presented by the COVID pandemic only brought them closer together, with Taiwan donating some 10 million surgical masks to the U.S. and the U.S. helping to provide Taiwan with much needed vaccines.

Another positive development – recent revival of the bilateral TIFA process for trade and investment negotiations after a five-year hiatus – was cited by Jen-Ni Yang, Deputy Trade Representative of Taiwan’s Office of Trade Negotiations. Bureau of Foreign Trade Director General Cynthia Kiang stressed the increasingly close cooperation between Taiwan and the U.S. in helping maintain strong and stable supply chains.

A keynote speech by Professor Philip Yang of National Taiwan University, a former Deputy Secretary General of Taiwan’s National Security Council, discussed other favorable trends, including signs that as part of its Indo-Pacific strategy the U.S. is paying greater attention to Taiwan’s strategic value. At the same time, he noted pressures arising from the growing U.S.-China economic competition, especially in the technology sphere.

In a roundtable discussion moderated by Regent Taipei Executive Chairman Steven Pan, business executives from both domestic and multinational companies contributed their expertise regarding the industries regarded as having the greatest potential for collaboration between U.S. and Taiwan companies – semiconductors and other ICT/5G-related products, medical technology and other healthcare items, electric vehicles (EV), and the energy and chemical sectors.

Pan summarized the panel’s key recommendations as follows:

  • The Taiwan and U.S. governments should regularly coordinate regarding industrial policy and promote strategic public-private partnerships on critical supply chains for the ICT 5G, medical technology, and EV sectors.
  • U.S. companies should leverage Taiwan’s sophisticated manufacturing platform to create a regional technology hub for Asia.
  • Taiwan and the U.S. should take advantage of the Taiwanese talent pool in both Taiwan and the U.S. in support of a manufacturing renaissance.

The semiconductor field is considered particularly promising for U.S.-Taiwan cooperation because of the complementary nature of the industries on the two sides, said John Chen, Senior Director of the Market Intelligence & Consulting Institute (MIC) of the Institute for Information Industry. Taiwan is strong in the foundry and packing/testing segments, while the U.S. historically dominates the design and marketing functions.

A session moderated by Peter Huang, Secretary General of the Importers and Exporters Association of Taipei, featured a special presentation by AmCham Taiwan President Andrew Wylegala introducing the concept of a Taiwan Commercial Initiative (TCI). The Initiative would seek to promote a series of concrete steps that hopefully would lead to a BTA.

A corollary initiative was set out by former AmCham Chairman and President Leo Seewald, who advocated conclusion of a bilateral tax agreement between Taiwan and the U.S. to increase certainty for business, boost investment, and reduce tax disputes.

Closing remarks by the two business organizations emphasized their commitment to continue working together to achieve the goal of upgrading bilateral economic relations through a BTA.

持續推動美台雙邊貿易協定

適逢臺美商業與科技領域合作前所未有的時機點,中華民國工商協進會與臺灣美國商會於臺北君品酒店舉辦「臺美企業圓桌論壇」,探討如何持續強化臺美間的經貿關係。

工商協進會林伯豐理事長於開幕致詞時說,想起去年此時,兩個單位發表共同聲明,呼籲美國和台灣政府開始就雙邊貿易協定(BTA)進行談判。他指出,發出聲明後,臺美關係朝著更好的方向發展,顯示聯合聲明的重要性。

呼應林理事長的談話,美國商會金奇偉會長表示,目前臺美關係正處在一個特殊的時刻。在COVID-19疫情中,臺灣多次捐助醫療口罩至美國,美國也提供疫苗支援,疫情反而促使兩國互動更為緊密。

行政院貿易談判辦公室副總談判代表楊珍妮表示,暫停五年的美國台灣貿易暨投資架構協定(TIFA)於日前重起談判,也代表臺美關係的一項正面發展。國貿局江文若局長強調,逐漸緊密的臺美合作關係,有助於維持供應練的穩定與韌性。

國家安全委員會前副秘書長、台灣大學教授楊永明在專題演講中提到,美國更加重視台灣在印太架構下的戰略價值,以及美中經濟競爭下,科技與技術領域帶給臺灣的壓力,等值得關注的雙邊關係正向發展趨勢。

由晶華酒店集團潘思亮董事長主持的圓桌討論中,來自國內和跨國公司的高階經理人交流,發表他們認為美臺合作下最有發展潛能領域的看法,像是半導體、資通訊、5G、醫療科技、電動車、能源與化學等產業。

潘思亮董事長總結會議的三大重點:

  • 台灣與美國政府應定期合作,針對資通訊、5G、醫療科技及電動車等關鍵產業,商討政策,並促進公私部門策略聯盟。
  • 美國企業應善用台灣成熟的製造產業,作為亞洲地區的科技中心。
  • 台灣與美國雙邊應善用台灣人才,以活化製造產業。

資訊工業策進會陳子昂資深總監表示,基於臺美雙邊產業的互補性,半導體為最有合作潛力的領域。臺灣擅長代工、包裝與測試,美國在設計與市場開發上則具有長期優勢。

臺北市進出口公會秘書長黃文榮在論壇中指出,希望以簽訂臺美雙邊貿易協定為目標,持續推動臺美企業交流與合作。美國商會執行長魏立安則在簡報中介紹商會於今年提出的臺灣商業計畫,希望跨大公私部門合作並透過具體步驟促成臺美雙邊貿易協定。

美國商會前會長李豪指出,洽簽臺美租稅協定將有助於建立更友善的商業環境,降低經營的不確定性、提升投資與減少稅務爭議。

工商協進會與美國商會在閉幕致詞時表示,未來雙方將持續合作,共同努力促成臺美雙邊貿易協定。

Taiwan-USA Trade and Investment Networking Center Opens in Taipei

AmCham Taipei on December 18 participated in the opening ceremony of the Taiwan-USA Trade and Investment Networking Center. The center is the result a collaborative effort between the government-sponsored Taiwan External Trade and Development Council (TAITRA), the American Institute in Taiwan (AIT), the American State Offices Association (ASOA), and AmCham Taipei. It is designed to strengthen commercial ties between Taiwan and the U.S. by facilitating cooperation between business partners, and offering advisory, analysis, and referral services, among other functions.

TAITRA Chairman James Huang delivered the ceremony’s opening speech, highlighting the special partnership between Taiwan and the U.S., which he said has “enabled Taiwan to be one of the most productive members of the global economy.” In order to take this relationship to the next level, Huang said, a channel was needed to advance comprehensive coordination among Taiwanese and U.S. businesses. Out of this necessity, the idea for the center was born.

In his remarks, AIT Director Brent Christensen stressed the vision for the center as “a one-stop, all-purpose platform to advise and assist Taiwan and American enterprises in expanding two-way trade and investment between the United States and Taiwan.” He emphasized that trade between Taiwan and the U.S. increased by 13.6% in the first 11 months of 2019, and that both partners are important sources of investment for the other. He also stated his desire for the center to play a role in promoting the U.S. government’s SelectUSA Investment Summit, an annual conference held in Washington D.C.

Deputy Minister of Economic Affairs Wang Mei-hua, who gave concluding remarks, pointed to the large amount of return investment by Taiwanese companies that have decided to reshore some of their high-value manufacturing operations from China as a result of the U.S.-China trade dispute. She said this development will make Taiwan an even more attractive location for international trade and investment.

The center is being housed within the TAITRA offices in the International Trade Building, 333 Keelung Rd., Sec. 1, part of the Taipei World Trade Center complex.

 

CPTPP: The Challenges for Taiwan

Following the U.S. withdrawal from the embryonic Trans-Pacific Partnership (TPP) soon after Donald Trump’s inauguration as President, the other 11 TPP countries decided to maintain the multilateral trade agreement under the revised name of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).

As a major trading economy, Taiwan hopes to be able to join the CPTPP when the pact is formally established and opens membership to more countries in a second round. Currently the CPTPP signatories are still in the process of seeking ratification from their various parliaments.

Da-Nien Liu, research fellow at the Regional Development Study Center of the Chung-Hua Institution for Economic Research (CIER) and an expert on regional trade agreements, shared his insights on “The CPTPP: The Challenges for Taiwan” with AmCham Taipei members and guests on May 24 at the  Chamber’s Lincoln Room.  Liu is also a former Deputy Secretary General of the National Security Council during the Ma Ying-jeou administration.

Liu noted that Taiwan will feel an economic impact from CPTPP whether or not it is able to participate in the agreement. If allowed to secure membership, Taiwan will need to liberalize its import regime, which would likely affect the domestic agricultural sector and certain industries. If Taiwan is excluded from CPTPP, the impact would be even greater, affecting the country’s markets in such sectors as plastics, iron and steel (and their products), electrochemical equipment, and auto parts.

The “China Factor” will be a major challenge for Taiwan, Liu said, as Beijing may try to pressure CPTPP members not to admit Taiwan or to block Taiwan’s accession until after China joins the group. Another prospective challenge might be the “down-payment” problem, as CPTPP member countries would likely expect Taiwan to resolve any outstanding trade disputes with them during bilateral talks preceding Taiwan’s entry into the agreement.

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Note: AmCham events are intended primarily for AmCham members and their guests. Many events are open to members’ guests and other non-members, but the attendance of any non-member must be approved in advance. AmCham reserves the right not to admit a non-member to any event without explanation.

Commerce Department Officials Call at AmCham

Ian Paul Steff, Deputy Assistant Secretary for Manufacturing in U.S. Commerce Department’s International Trade Administration, exchanged views with AmCham Taipei representatives during an hour-long meeting in the Chamber’s Lincoln Room on March 22 as part of his six-day visit to Taiwan. Steff was joined by two colleagues: International Trade Specialist Kyle Johnson and Devin A. Horne, Civil Nuclear Trade Specialist.

The AmCham attendees included President William Foreman, Standing Vice Chairman Leo Seewald, Vice Chairman Vincent Shih, Governor Edward Shober, President Wayne Chin and Vice President Richard T.C. Chen of Pacific Engineers & Constructors, Senior Director Don Shapiro, and Senior Director for Government and Public Affairs Amy Chang. Ireas Cook, chief of the Commercial Section at the American Institute in Taiwan, and Mark Lewis, the deputy chief, also attended.

Steff said the U.S. government sees many economic opportunities in Taiwan because of the numerous mutual interests, including such sectors as biotech, energy, and the Internet of Things.

2017 Trade Secrets Act Forum

Taiwan has had Trade Secrets legislation on the books since 1996, but the law has been strengthened substantially in recent years in response to the increased number of cases of theft of confidential commercial information.

On December 6, AmCham Taipei’s Technology Committee and Intellectual Property & Licensing Committee jointly sponsored a seminar at the Westin Taipei to review the latest trends in trade secrets protection. Specialist Chen Hsin-ru (陳信儒) from the Ministry of Economic Affairs’ Intellectual Property Office opened the session with a definition of what constitutes a Trade Secret, followed by describing the detailed steps involved in filing a lawsuit if one’s trade secretshave been infringed upon.

Citing real-life cases as examples, Prosecutor Liu Yi-jun (劉怡君) from the Hsinchu District Prosecutors Office shared the process of investigation, including what evidence was required and what could help reinforce a case, as well as what corporations can do to prevent the violation of trade secrets. Special Investigator Pan Ji-xiang (潘季翔) from New Taipei City’s Investigation Bureau concluded the discourse with enforcement and litigation statistics.

From left to right: Speaker Special Investigator Pan of the New Taipei City Investigation Bureau; Speaker Specialist Chen of the Taiwan Intellectual Property Office; Speaker Prosecutor Liu of the Hsinchu District Prosecutors Office; and AmCham IP&L Committee co-chair Peter J. Dernbach of the Winkler Partners law firm.

During the Q&A session, attendees raised numerous questions about the coverage of the Act and its enforcement. This seminar helped build a communications bridge between the business and law enforcement communities in the hope of enhancing regulative efficiency and strengthening the protection of valuable intellectual properties.

Interested in attending our events? Join us at other upcoming events, click here.

Note: AmCham events are intended primarily for AmCham members and their guests. Many events are open to members’ guests and other non-members, but the attendance of any non-member must be approved in advance. AmCham reserves the right not to admit a non-member to any event without explanation.

TPP Insights from Washington DC

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Most of the reporting from the United States these days paints a bleak picture of the prospects for the Trans-Pacific Partnership (TPP) trade agreement to be ratified by Congress. But at AmCham Taipei’s “TPP: Insights from Washington D.C.” luncheon event at the Mandarin Oriental Hotel on September 13, the speakers cautioned the audience “don’t believe everything you read.”

Speaking were Wendy Cutler, formerly the lead U.S. negotiator for TPP and now vice president and managing director of the Washington office of the Asia Society Policy Institute, and Tami Overby, senior vice president, Asia, at the U.S. Chamber of Commerce.

Although there is heightened anxiety in the United States about the country’s economic future, with trade often unfairly blamed for the loss of manufacturing jobs, polls show that a majority of Americans still support free trade in general and the TPP in particular, Cutler said. Given the high priority that President Obama has attached to TPP passage, and the continued support from most of the Congressional leadership, she said she expects ratification to occur during the lame duck session of Congress that follows the November elections.

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Citing the importance of TPP as a high-standard trade pact that will bring economic benefits while also bolstering American leadership in Asia, Overby quoted Winston Churchill as saying “You can always count on Americans to do the right thing – after they’ve tried everything else.”

Cutler urged the Taiwan government not to wait, but to proceed to undertake reforms to prepare to be considered for TPP entry in a second round. She noted that investors are already beginning to think in terms of a post-TPP world, choosing to locate their investments in TPP economies because of the strong IPR and legal protections.

Among the special guests at the luncheon were Minister without Portfolio John Deng, who is in charge of Taiwan’s efforts to become TPP-ready; Bureau of Foreign Trade Director-General Jen-ni Yang; Chairman Francis Liang of the Taiwan External Trade Development Council (TAITRA); Connie Chang, Director General of the Department of Overall Planning at the National Development Council; and Jeff Horwitz, chief of the Economic Section at the American Institute in Taiwan.

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