cens logo

USTR's Trade Barrier Report Reveals Taiwan's Double Standard on Foreign Investment

2014/04/25 | By Judy Li

The United States continues to be concerned about Taiwan's stance over old issues as the restrictions on beef and rice import quotas in an annual report on foreign trade barriers published early April by the Office of the U.S. Trade Representative (USTR).

The report this year unusually details Taiwan's stringent limitations on investments by Chinese mainlanders, with regulations apparently biased against them relative to other foreign investors. Bill Cho, vice economics minister, addressed  the U.S. concern over such investment issue while hoping that Taiwan should abide by and fulfill the obligations as a WTO member to equally treat all non-Taiwanese investors.

The report points out that Taiwan caps the proportion of foreign investments at 49% in sectors including television & broadcasting, power distribution & transmission, pipeline conveyed natural gas, high-speed railroads etc. And individual foreign shareholders may not own over 25% stake in Taiwan's domestic airlines, cargo underwriting firms, air cargo  companies, beverage & food businesses, in which all foreign shareholders may not own over 49.99%. However, Chinese mainlanders are singled out to be barred from investing in the said sectors.

The report bluntly says that Taiwan sets double standards on investments by Chinese mainlanders and other foreigners, indicating that Taiwan is not fully opening its market and not ready to adopt liberalized external trade. So the USTR believes that Taiwan may be far from ready to join the Trans-Pacific Strategic Economic Partnership Agreement (TPP).

Besides, the USTR complains in its report that Taiwan applies Special Safeguard provisions regarding imports of several U.S. agricultural products, including poultry, certain types of offal, milk in addition to beef. (JL)