Thursday, June 23, 2016

From the Nelson Report: Taiwan and TPP


The Nelson Report sent this around:


TAIWAN MAKING A LIST, CHECKING IT TWICE: In anticipation of its bid to join TPP, Taiwan has made a list of roughly 45 changes to its law, from intellectual property to food safety, that would bring it into compliance with the Asia-Pacific deal, according to Francis Kuo-Hsin Liang, who heads up the government-sponsored Taiwan External Trade Development Council.

Liang, who is in Washington with roughly 70 Taiwanese executives this week for the SelectUSA summit, said it's not clear how many of those changes the Taiwanese Parliament would choose to take up before Taipei begins its accession to the Asia-Pacific pact - noting that the Taiwanese legislature is as opinionated as the U.S. Congress. But in an interview with POLITICO, Liang emphasized that joining the TPP would be vital for the Taiwanese economy.

"If the United States and the other 11 parties finish the first round and ratification, then Taiwan should be included in the second round," he said, calling it a necessity for the island. "Because TPP is not ratified, no TPP member could say anything concrete, but we are preparing ourselves," said Liang, who has been a prominent trade official in Taiwan for many years.

As an example of why Taiwan needs to be part of TPP, he pointed to "functional fabric" that is manufactured in Taiwan and shipped to places like China and Vietnam to be made into apparel. Because of the textile provisions of TPP, which largely require clothes to be made in the TPP region from the yarn forward for tariff benefits to apply, Vietnam could begin sourcing elsewhere. He also cited a conversation with a tech company whose executives worried that it would become more expensive to manufacture in non-TPP participants South Korea and Taiwan after the deal takes effect.

The bilateral trade issue that looms large in conversations about Taiwan's TPP accession is pork, which the island refuses to import from the U.S. because American ranchers use the feed additive ractopamine. Many in the U.S. want Taiwan to open its pork market as a confidence-building measure before joining the Asia-Pacific pact. Liang noted that his government seems to be looking at the issue closely, but said "from a practical standpoint" it might be easier to explain a market opening in the pork sector to the Taiwanese public if it was paired with a give-and-take as part of a larger negotiation.
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