Time not yet ripe for US-Taiwan FTA

Asia Pulse | 18 June 2004

Time Not Yet Ripe For U.S. - Taiwan FTA : Amcham

WASHINGTON, June 18 Asia Pulse - A delegation of the American Chamber of Commerce (AmCham) in Taipei said here Wednesday that although Taiwan is keen on signing a free trade agreement (FTA) with the United States, the time for such an agreement is not yet ripe.

AmCham President Andrea Wu is currently leading the delegation on its visit to Washington, D.C. to call on relevant U.S. government agencies. The delegation has lobbied and communicated with them on issues of concern after AmCham published its 2004 Taiwan White Paper earlier this month in which it expressed concern over the establishment of direct cross-Taiwan Strait transportation links and the protection of intellectual property rights (IPR).

The delegation said that the signing of an FTA is a good idea, but the time has yet to come because the issues the United States is most concerned about - pharmaceuticals, IPR protection and government procurement - have yet to be resolved.

Richard Vuylsteke, executive director of AmCham, said that although Taiwan completed a revision of its copyright law last year, it removed at the last minute the most intimidating part regarding punishments for violators.

On government procurement, he said that Taiwan has yet to sign a government procurement agreement and the United States is almost excluded from government procurement projects such as infrastructure construction projects.

Before such questions are resolved, there will be only limited progress in moves to discuss a FTA between the United States and Taiwan, he said.

An official of Merck Sharp & Dohme Taiwan branch noted that the development of a new drug or new vaccine takes about 15 years and a cost of US$1 billion, and that the developing manufacturers have to be assured that related test information is thoroughly protected when it applies to a government.

If the information is revealed to local manufacturers, then no foreign manufacturer will dare to turn over their information to the government, and Taiwan’s plan to turn itself into a biotechnology center will be hard to realize, the Merck official said.

AmCham delegates also said that Charles Freeman, deputy assistant U.S. Trade Representative, was originally scheduled to visit Taiwan in late June but will now postpone his trip until the second half of July.

Freeman will discuss such controversial trade issues as IPR protection. If there is a substantial result, then both sides will be able to restart talks on a trade and investment framework agreement (TIFA). After TIFA, they will be able to address the issues of FTA talks.

On the issues of establishing direct cross-strait trade and transportation links, AmCham delegates said that some Taiwan people worry that direct links will cause a hollowing out of domestic industry because of the flight to the mainland. However, the delegates said that without direct cross-strait links foreign businessmen will be forced by cost considerations to move their focus to the mainland, which will indeed cause an industrial hollowing out.

(CNA)