Beef Bull

Don Shapiro of the American Chamber of Commerce writes at Brookings on The Beef Beef that is impairing progress in US-Taiwan relations, with background:

Although it considered itself well-versed on the beef issue, an American Chamber of Commerce in Taipei delegation that visited Washington last autumn was still surprised by the vehemence of the criticism of Taiwan it heard from American officials on the subject. One high-level official described Taiwan flatly as “an unreliable trading partner,” for example, while another said the disagreement over beef had “cast a pall” over the entire bilateral relationship. Beef had taken on a symbolic importance far out of proportion to its monetary value of less than 1 percent of U.S. exports to Taiwan.

The background is that the two governments signed a protocol in October 2009 lifting most of the remaining restrictions on U.S. beef products that Taiwan had put in place following the discovery of a case of mad cow disease in 2003. Just two months later, however, the Taiwan legislature – in which Ma’s Kuomintang controlled some three-quarters of the seats – enacted a law that reversed some of those very provisions. Despite resentment at what it regarded as Taiwan’s reneging on the protocol, the U.S. government by early 2011 was willing to start preparations to resume TIFA talks. Then another obstacle arose when Taiwan rejected some shipments of beef found to contain traces of the leanness-enhancing feed additive ractopamine. Though ractopamine, widely used by American ranchers, had long been a banned substance in Taiwan, inspectors had not previously tested for its presence. Random inspections, and the rejection of many shipments, have continued over the past year, and the uncertainty has caused some big buyers such as Costco to switch to other sources of supply.

Whenever questions were raised last year about finding a solution to the impasse, Taiwan officials responded that nothing could be done before this January’s elections, for fear of sparking protests from consumer and farming groups that could escalate into a campaign issue. Although no promises were made about what might happen after the election, this month has seen a flurry of public comments from government officials and scholars that appear to be preparing the groundwork for a change in policy. Inter-agency discussions are currently taking place among the Council of Agriculture, Department of Health, and Ministry of Economic Affairs.

The likely way forward would be to replace the current zero tolerance of ractopamine with a defined limit on the amount permitted. In fact, in 2007 Taiwan had notified the World Trade Organization (WTO) of its intention to set such a Maximum Residue Level (MRL), though it never followed through. But a major question mark would be whether Taiwan would propose – and the United States agree to – a compromise in which an MRL would be set for beef but not pork. Taiwan has no beef industry to speak of, but hog-raising is big business, and the pig farmers, who are politically well organized, are adamantly opposed to opening the door to competition from American pork.

Although the U.S. government and meat industry insist there is no scientific basis for a total ban on ractopamine, the Taiwan public may not be so easily persuaded, especially after several major food-safety scares in recent years. And the political delicacy of the whole issue was driven home two years ago when Su Chi, one of Ma’s most trusted lieutenants, was forced to resign as head of the National Security Council after his efforts to resolve the matter through the protocol with the U.S. were undercut by the legislature. It would therefore require a measure of political will and some skillful maneuvering to reach a solution, though acting four years before the next presidential election is perhaps the best time to risk taking a political hit.

The reason the public may not be so easily persuaded is that ractopamine is banned in 150 countries, including the EU. This suggests that there is no reason the US couldn't fall in line with the world and ban the stuff, thus improving the healthiness of its food products, opening up new markets, and removing a potential trade issue, but that would be too intelligent.

As Shapiro notes, the use of ractopamine also makes it easy for local pork producers to argue that US pork should be kept out of the market. This means that a proposed compromise, setting a defined limit on ractopamine exposure, may fail because pork producers would demand zero tolerance (not that local pork producers mind inundating locals with their untreated pig waste but god forbid we have trace amounts of ractopamine), meaning that the beef issue would simply be replayed over pork.

Fortunately the US has not held the beef issue against Taiwan in other areas. Arms, for example. Taiwan was nominated for the visa waiver program, but an extradition treaty has stalled since it would mean that Taiwan would have to hand over criminals residing in Taiwan with US citizenship -- who might also have Taiwan citizenship.

Shapiro lists some of the areas where the US and Taiwan could make progress, one of which is IP protection, where China once again rears its mercantilist head: apparently US business secrets are stolen by Chinese firms by poaching Taiwan employees of US firms in Taiwan.
__________________
Daily Links

• Internet surfing and found a fascinating scholarly piece by Hans Huang, who writes extensively on sexuality in Taiwan, on the policing of prostitution and sexuality in Taiwan from 1945-2000.
• Linsanity watch: America must respect the true power of China, which is clearly what Lin represents. 
• A coming India-China conflict?
• Commonwealth Magazine: Rising costs are forcing Taiwanese SMEs out of China, leaving them to lease their facilities to local managers.
• Russell Hsiao argues that the US ought to recognize Taiwan as a sovereign independent state to signal once and for all that Chinese territorial expansion will be opposed.
•  China's defense budget is expected to double over next five years, reaching four times Japan's.
• Asiaeye hosts a piece on China's polar ambitions: "Beijing’s comprehensive engagement of Arctic states demonstrates that China’s ambition is not just to be a Pacific power, but a global one."
• China hackers suspected in Nortel breach.
• Global warming may strongly affect the struggle over the resources of the South China Sea.

_______________________
[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.