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August 20, 2017

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U.S. still saying no to FTA with Taiwan, cites IPR issue

President Chen Shui-bian's economic advisor, former Premier Vincent Siew, arrived in Washington D.C. this week to talk up the benefits that both the U.S. and Taiwan would gain by signing a bilateral Free Trade Agreement (FTA). However, his message appears to have fallen on deaf ears.

Though Siew met with a senior official at the Office of the United States Trade Representative (USTR) on Wednesday, the former premier was told that the U.S. remains unwilling to enter into negotiations toward an FTA until Taiwan resolves several thorny issues between the two sides, according to Rupert Hammond-Chambers, president of the U.S.-Taiwan Business Council, speaking after the council's board of directors lunch on Friday.

Officials in the USTR's office of North Asian Affairs declined to comment on Friday about their meeting with the former KMT premier. However, Siew "got the message," Hammond-Chambers told reporters.

In his keynote speech at Friday's lunch, attended by Assistant Secretary of State for East Asian and Pacific Affairs Jim Kelly, Deputy Assistant Secretary of State for East Asian and Pacific Affairs Randy Schriver and by members of the local business and academic community, Siew stressed that the time is right for the signing of a U.S.-Taiwan FTA.

Please see IPR on page

"For reasons of traditional friendship, shared social values, strategic considerations, economic interests ... it is necessary that the U.S. collaborate actively with Taiwan in the economic sphere," said Siew. Particularly, he added, as Taiwan "has entered a new phase in its economic development."

Failure to move ahead with the proposed FTA as a matter of urgency, taking into account Taiwan's deepening diplomatic and political isolation, could have grave consequences for the island's economy, he added.

Despite the island's highly successful trade record over the last fifty years, "Taiwan risks being marginalized in the world economy," Siew told council members.

Taiwan is a "can do" country, said Siew, drawing on comments made by U.S. Trade Representative Bob Zoellick at the September World Trade Organization (WTO) talks in Cancun, Mexico, to describe nations willing to work together to overcome trade disputes. Plus, Taiwan is beginning to feel the effects of an economic recovery with the island's economy forecast to grow by 3 - 3.5 percent this year, according to Siew. "We feel a lot more confident than before," he said.

But, while the government blames Beijing for politicizing trade and the further isolation of Taiwan from participation in international mechanisms, Washington is adamant that on this issue the responsibility lies squarely with the Chen administration to first tackle persistent trade issues such as intellectual property rights (IPR), pharmaceutical pricing and quotas on rice imports.

Hammond-Chambers agrees. "China isn't the issue," he said. Even Siew admits, that the IPR problem in Taiwan "is nothing new."

The Chen government, however, feels that Washington is placing too much emphasis on what it sees as an inevitable consequence of a dynamic trade relationship.

"In a trading relationship as significant as that between Taiwan and the U.S., there are bound to be some irritants ... but this is not a reason to insist on delaying negotiations on the FTA," said Siew. "It is the FTA itself that provides the vehicle for resolving these bilateral issues."

Still, for now at least, Washington and Taipei appear to be talking at cross-purposes and the USTR will maintain a moratorium on visits to Taiwan by high-ranking U.S. trade officials and similarly Taiwan trade officials are not welcome in Washington, according to Hammond-Chambers.

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