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Remarks by Douglas H. Paal, Director, American Institute in Taiwan, to the Annual General Meeting of the American Chamber of Commerce in Taipei

BG0524E | Date: 2005-11-22

It is a great honor and a real pleasure to join you today.  I enjoy every opportunity to meet with friends in the American Chamber of Commerce, and what means most to me on these occasions is the opportunity to hear what's on your minds - what concerns you most; what we at AIT are doing that's helpful or not; and how we might do better.  So I would like to encourage all of you to voice your concerns, opinions, and requests to me and to the other officers from AIT who are here today.  We count the AmCham among our most important partners in promoting the cause of friendship between the people of America and Taiwan.

For Americans, today, November 22nd is a sad anniversary.  Forty-two years ago, President John F. Kennedy was assassinated in Dallas.   For all of us who are old enough to recall that day, it stands out as one of the most unforgettable events of our lives.  President Kennedy is remembered for many reasons.  For me, it was for rekindling a belief that public service is a high calling.  At a moment when Americans could have retreated from tough challenges and enjoyed unparalleled wealth and comfort, he called us to serve and sacrifice.  Part of his legacy is the Peace Corps, which has given many thousands of American volunteers the opportunity to help some of the world's neediest - and has in turn enriched the lives of those volunteers in incalculable ways.  As some of you know, one of my daughters recently completed a two-year Peace Corps tour in one of the poorest places on earth and returned a finer young woman from the experience.

Reflecting on the time since President Kennedy's death, any number of lessons could be drawn.  The constitutional transition demonstrated the resilience of our institutions and continuity of national purpose.  The Civil Rights Movement that claimed so much of his attention endured and achieved much.  Kennedy's successors stood firm in the Cold War, eventually greeting the day when the Berlin Wall came down and democracies sprung up throughout Central and Eastern Europe.   And Americans have maintained the tradition of expanding freedom, transforming the world as we find it.

Turning now to Taiwan, American policy and actions have been major factors enabling the people of this island to enjoy expanding democracy and increased prosperity in recent decades.  A  fragile calm prevails in the Strait of Taiwan and has endured against the odds, allowing both sides to live in peace and to prosper.  United States' one-China policy remains consistent, underwritten by Three Communiqu廥 and the Taiwan Relations Act.  We expect that no one unilaterally changes the status quo in cross-strait relations.  We encourage dialogue within this stable and peaceful framework that this policy and our cooperation with Taiwan have afforded, we nevertheless have plenty to do. 

I would like to take a few minutes to review some of the top issues of concern to us as this year winds down.  Most of these are common concerns on which AIT and the AmCham have worked together.

We are encouraged by signs of progress toward cross-strait charter flights and the further opening of Taiwan to tourists from the mainland.  These measures promise important economic benefits for both sides.  They will also help foster the kind of people-to-people contact that can strengthen regional stability.   To this end, the U.S. continues to believe that the PRC should talk directly with the elected representatives of the people of Taiwan to advance these matters. 

Of course, one of the benefits of cross-strait flights is facilitation of the movement of people.  The AmCham White Paper has raised concerns regarding current policies and procedures which make it difficult for companies to bring staff to Taiwan from the mainland, whether for meetings or for the longer term.  We echo these concerns and believe that Taiwan's economic interest would be well served by greater openness in this area.

Also in the area of transportation, AIT has been working closely with Taiwan to strengthen security and enhance trade through the Container Security Initiative or "CSI."  We established a CSI unit in Kaohsiung in July to work with Taiwan Customs to improve the security of container-based trade.  The CSI team has already assisted Taiwan in the seizure of a shipment of counterfeit U.S. currency. 

We support Taiwan's participation in a broad range of international organizations and activities.   We are pleased that Taiwan sent a delegation led by former Vice Premier Lin Hsin-I to Pusan to participate in APEC meetings.   Taiwan has demonstrated its ability to contribute to the international community through participation in APEC and WTO, through its very important cooperation with the WHO, and in its prompt disaster assistance following the South Asian tsunami and Hurricane Katrina.   I should note that the U.S. worked with members of the World Health Organization to modify the International Health Regulations, with the result that Taiwan has been able to participate in WHO meetings on a range of topics, including the vital work of combating Avian Influenza.

Taiwan and the U.S. have a close and multifaceted trading relationship which has benefited both sides.   We were happy to support Taiwan's entry into the WTO in 2002.  In November, 2004, we reopened the US/Taiwan Trade and Investment Framework Agreement (TIFA) discussions and look forward to continuing these talks in the future.

While we still occasionally encounter proposed regulations that effectively discriminate against U.S. exports, Taiwan's regulatory environment overall is good and Taiwan officials are increasingly willing to consult with  industry and the public about rules that may have the effect of  restricting trade. 

WTO membership has in fact proved a valuable tool for encouraging greater openness and transparency.  We'd like to see that openness extended to the government procurement sector, where Taiwan has still not met its commitment to join the Agreement on Government Procurement. 

Although tariffs have been reduced since WTO accession, we see many examples of non-tariff barriers or technical barriers to trade in Taiwan.  One example which is on our minds because it has disappeared from our plates is beef. 

It is unfortunate that American beef continues to be banned from Taiwan.  Earlier this year when Taiwan made the decision to resume beef imports, we praised Taiwan for its adherence to science-based policies and its leadership in the region.  It is vital that Taiwan return to the principle of basing trade and market regulations on sound science in order for Taiwan to be viewed as a reliable trade partner.  Over two months ago, our side provided Taiwan the information it had requested.  Taiwan authorities have publicly recognized that U.S. beef is safe, but have yet to take action.  There is simply no justification for continuing the ban on American beef, and I assure you that we are fully engaged in working to have the ban lifted as soon as possible.

Despite the ban on beef, Taiwan does remain a critical market for U.S. agriculture, importing more than $2 billion worth of U.S. agricultural products each year.  We appreciate the significant level of trade that we have with Taiwan, yet we are quite concerned by Taiwan's reluctance to embrace fully a more market-oriented approach to agricultural trade.  This reluctance seems largely to be driven by domestic politics.  For example, Taiwan is a participant in the so-called "G-10" group, which opposes the bold U.S. initiative in the WTO Doha Round negotiations to liberalize market access for agricultural products.  This is inconsistent with Taiwan's stance supporting liberalized trade in manufactured goods and services, and inconsistent with the benefits Taiwan has received from free trade. 

I am also pleased to announce that USDA's Animal and Plant Health Plant Inspection Service has posted an American officer to AIT.  Mr. Lou Vanechanos will provide on-the-ground technical expertise to manage and resolve the growing number of technical issues, like those we have seen with beef and apples, that impact our agricultural exports to Taiwan.

The creation of an independent telecommunication regulatory body was a WTO accession commitment.  However, we share the hope that the National Communications Commission (NCC) will avoid politicization that could negatively affect its ability to meet its goals.  The issues at stake here are very broad and are fundamental to society as well as to the economy.  In all places, the United States supports free and responsible media as a vital part of a healthy democracy.

Taiwan has taken significant steps to improve the environment for IPR protection over the past two or three years.  These include amendments to the copyright law and passage of legislation to provide protection for pharmaceutical test data.  In recognition of these improvements, Taiwan was removed from the Special 301 priority watch list in 2004 and placed on the regular watch list.  We encourage Taiwan to continue its positive actions to protect IPR and stand ready to offer any assistance we can.  A couple of growing concerns are sales of counterfeit merchandise over the Internet (a trend that seems to be spreading as ever more of Taiwan shops online), and counterfeit medicine.  Pharmaceutical piracy threatens not only the rights-holder, but also the health of the Taiwan public.  The former chief of the Bureau of Pharmaceutical Affairs estimated that 25% of all pharmaceuticals sold in Taiwan could be counterfeit.  We are encouraging the Ministry of Justice and the Department of Health to work together to take action to solve this disturbing problem.

Some new twists on old themes remain.  The proposal to institute Global budgeting island wide is cause for grave concern to producers of innovative pharmaceuticals and medical devices.  We are asking the DOH to reconsider this measure.  We hope Taiwan can set its National Health Insurance on a solid financial footing without resorting to measures that unfairly disadvantage American drug manufacturers.  We agree with the many industry experts who argue that the wrong kind of "fix" will simply drive out innovative pharmaceuticals and put healthcare at risk.

AmCham and AIT have for years urged Taiwan to implement reforms to increase the transparency and upgrade the management expertise in Taiwan's financial sector.  We continue to urge that such financial reforms be thoroughly and fairly implemented.

Finally, I would like to note that among residents of Taiwan, the United States continues to be a popular destination for tourism, education, and business.  Despite rumors and stories about the difficulty of entering the United States, in the just completed fiscal year, we processed nearly 200,000 nonimmigrant visas for Taiwan passport holders, an increase of over 5% from the previous year. According to the Institute of International Education, in the 2004-2005 school year, Taiwan ranked number six in the world in the number of students studying in the U.S., with nearly 26,000 students enrolled in U.S. schools, and over the last year AIT issued over 17,500 student and exchange visitor visas.  We have worked hard to make the visa application process as convenient as possible.  Ninety-eight percent of applicants get their visas.  We believe that the information available at the AIT website should be very helpful to guide people through the process for both visa applicants and American citizens in Taiwan. 

Thank you for your attention.