US-Taiwan Free Trade Agreement

Tracking news and information about the proposed US-Taiwan Free Trade Agreement (FTA)

Friday, May 28, 2004

Cabinet to set up special task force for US FTA talks

Thursday, May 27, 2004


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US trade official to visit in June

U.S. ready to move ahead with trade talks, official says

Friday, May 07, 2004

From BNA Publications' International Trade Daily

No. 88
Friday May 7, 2004
Page A-25
ISSN 1523-567X

U.S. Will Renew Trade Contacts With Taiwan, But FTA Still Off Agenda

A U.S. trade official said May 6 that the United States will renew trade and investment talks with Taiwan in an effort to resolve several long-standing disputes between the two countries, but he added that a bilateral free trade agreement (FTA), which Taiwan has long sought, is still not on the agenda.

Charles Freeman, acting assistant U.S. trade representative for China affairs, said that Taiwan has made progress on several fronts, including intellectual property rights (IPR) protection, a leading irritant in bilateral trade relations. Taiwan has also made progress on telecommunications and pharmaceutical issues and on its implementation of rice trade policy, he said.

As a result, the United States has decided to reconvene talks under an already existing bilateral trade and investment framework agreement (TIFA), Freeman said, with the hope that a "final push" could lead to resolution of the issues. U.S. and Taiwanese officials have held TIFA talks before, but they were broken off due to a lack of progress, he said. TIFAs usually set up bilateral councils that enable the United States and its TIFA partner to discuss trade and economic disputes. TIFAs frequently have served as precursors to FTA negotiations.

Freeman, who spoke at a luncheon sponsored by the U.S.-Taiwan Business Council, also said he hopes to visit Taiwan in June to discuss a possible trip by a high-level delegation from the United States to Taiwan. Such a visit could end an informal moratorium on trips by high-level U.S. trade officials, which has been in effect since February 2003 (141 DER A-1, 07/23/03 ).

In addition, Freeman denied that political considerations regarding China's sensitivities towards Taiwan have prevented the United States from initiating FTA talks with the island nation. Instead, he emphasized that U.S. business groups have not sought such talks.

The prospect of an FTA "has never been formally raised," Freeman said. While the United States would like to advance its economic relationship with Taiwan, he said, "for right now, [the TIFA] is enough."

IPR Thorn in Bilateral Relationship
U.S. officials have urged Taiwan for several years to step up its protection of IPR through better laws and stronger enforcement. The U.S.-based International Intellectual Property Alliance (IIPA) estimates that copyright piracy in Taiwan cost U.S. companies $452.7 million in 2003.

Freeman acknowledged that Taiwan has made progress on the issue, and said that U.S. officials recently spent "a lot of time agonizing" over whether to keep Taiwan on the so-called "Priority Watch List" of IPR violators in the Office of the U.S. Trade Representative's 2004 "Special 301" report, released May 3 (85 DER A-33, 05/4/04 ).

The Special 301 provision in U.S. trade law requires the USTR to identify those countries that deny adequate IPR protection for U.S. companies. In its 2004 report, the USTR commended Taiwan for increasing its enforcement efforts, "which have significantly reduced the number of pirated optical media products for retail sale." However, the report said that IPR pirates have adapted and are selling products over the Internet and through other channels. The USTR said it would conduct an "Out of Cycle Review" on Taiwan in the fall of 2004.

Freeman said that despite the progress made by Taiwan's authorities, "we still have some work to do." He urged Taiwan to pass and implement new anti-counterfeit legislation.

Taiwan-China Fight Delays WTO Phonebook
On a separate issue, Freeman said it was "really unfortunate" that tensions between Taiwan and China have spilled over into the WTO, which he said should not be a forum for disputes over Taiwan's sovereignty. China claims sovereignty over Taiwan, which it regards as a renegade province.

China refused to allow Taiwan to sit in as a third party on consultations between the United States and China over China's value added tax (VAT) policies on integrated circuits, an issue that has spurred the United States to file a WTO case against China. China objects to Taiwan's use of the phrase "permanent mission" to describe its Geneva office, which it says implies that Taiwan is a sovereign state.

The issue, Freeman noted, has also delayed publication of the WTO phone book for over six months. He said the two countries should "grow up" and resolve the issue.

"The WTO is not a group of sovereign countries discussing issues of politics," he said. "It's a group of economies discussing issues of economic substance. And the fact that these issues that have nothing to do with the WTO are major issues in Geneva is a source of great frustration to the United States government."