U.S.-Taiwan economic relations : joint hearing before the Subcommittees on Economic Policy, Trade, and Environment and Asia and the Pacific of the Committee on Foreign Affairs, House of Representatives, One Hundred Third Congress, first session, March 30, PDF
Preview U.S.-Taiwan economic relations : joint hearing before the Subcommittees on Economic Policy, Trade, and Environment and Asia and the Pacific of the Committee on Foreign Affairs, House of Representatives, One Hundred Third Congress, first session, March 30,
U.S.-TAIWAN ECONOMIC RELATIONS Y4.F 76/1:T 13/11 U.S. -Taiuan Econonic Relations, 10... JOINT HEARING BEFORE THE SUBCOMMITTEES ON ECONOMIC TRADE AND ENVIRONMENT POLICY, AND ASIA AND THE PACIFIC OF THE COMMITTEE ON FOREIGN AFFAIRS HOUSE OF REPRESENTATIVES ONE HUNDRED THIRD CONGRESS FIRST SESSION MARCH 30, 1993 Printed for the use of the Committee on Foreign Affairs MAV 4 J994 U.S. GOVERNMENT PRINTING OFFICE 75-689CC WASHINGTON : 1994 ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments.CongressionalSalesOffice,Washington. DC 2(1402 ISBN 0-16-043676-1 U.S.-TAIWAN ECONOMIC RELATIONS Y 4. F 76/1::T 13/11 U.S. -Taiuan Econonic Relations* 10... JOINT HEARING BEFORE THE SUBCOMMITTEES ON ECONOMIC TRADE AND ENVIRONMENT POLICY, AND ASIA AND THE PACIFIC OF THE COMMITTEE ON FOREIGN AFFAIRS HOUSE OF REPRESENTATIVES ONE HUNDRED THIRD CONGRESS FIRST SESSION MARCH 30, 1993 Printed for the use of the Committee on Foreign Affairs tmitmm omenta MAV 4 1994 U.S. GOVERNMENT PRINTING OFFICE 75-689CC WASHINGTON : 1994 ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments.CongressionalSalesOffice.Washington,DC 20402 ISBN 0-16-043676-1 COMMITTEE ON FOREIGN AFFAIRS LEE H. HAMILTON, Indiana, Chairman SAM GEJDENSON, Connecticut BENJAMIN A. GILMAN, New York TOM LANTOS, California WILLIAM F. GOODLING, Pennsylvania ROBERT G. TORRICELLI, New Jersey JAMES A. LEACH, Iowa HOWARD L. BERMAN, California TOBY ROTH, Wisconsin GARY L. ACKERMAN, New York OLYMPIA J. SNOWE, Maine HARRY JOHNSTON, Florida HENRY J. HYDE, Illinois ELIOT L. ENGEL, New York DOUG BEREUTER, Nebraska ENI F.H. FALEOMAVAEGA, American CHRISTOPHER H. SMITH, New Jersey Samoa DAN BURTON, Indiana JAMES L. OBERSTAR, Minnesota JAN MEYERS, Kansas CHARLES E. SCHUMER, New York ELTON GALLEGLY, California MATTHEW G. MARTINEZ, California ILEANA ROS-LEHTINEN, Florida ROBERT A. BORSKI, Pennsylvania CASS BALLENGER, North Carolina DONALD M. PAYNE, New Jersey DANA ROHRABACHER, California ROBERT E. ANDREWS, New Jersey DAVID A. LEVY, New York ROBERT MENENDEZ, New Jersey DONALD A. MANZULLO, Illinois SHERROD BROWN, Ohio LINCOLN DIAZ-BALART, Florida CYNTHIA A. McKINNEY, Georgia EDWARD R. ROYCE, California MARIA CANTWELL, Washington ALCEE L. HASTINGS, Florida ERIC FINGERHUT, Ohio PETER DEUTSCH, Florida ALBERT RUSSELL WYNN, Maryland DON EDWARDS, California FRANK McCLOSKEY, Indiana THOMAS C. SAWYER, Ohio (Vacancy) Michael H. Van Dusen, ChiefofStaff Richard J. Garon, Minority ChiefofStaff ANNE GREY, StaffAssociate MICKEY HARMON, StaffAssociate (ID Subcommittee on Economic Policy, Trade and Environment SAM GEJDENSON, Connecticut, Chairman JAMES L. OBERSTAR, Minnesota TOBY ROTH, Wisconsin CYNTHIA A. McKINNEY, Georgia DONALD A. MANZULLO, Illinois MARIA CANTWELL, Washington DOUG BEREUTER, Nebraska ERIC FINGERHUT, Ohio JAN MEYERS, Kansas ALBERT RUSSELL WYNN, Maryland CASS BALLENGER, North Carolina HARRYJOHNSTON, Florida DANA ROHRABACHER, California ELIOT L. ENGEL, New York CHARLES E. SCHUMER, New York JOHN SCHEIBEL, StaffDirector EDMUND B. RICE, Republican Professional StaffMember KATHLEEN BerTELSEN, Professional StaffMember DONNA LaTORRE, Professional StaffMember PETER YEO, Professional StaffMember Subcommittee on Asia and the Pacific GARY L. ACKERMAN, New York, Chairman ENI F.H. FALEOMAVAEGA, American JAMES A. LEACH, Iowa Samoa DANA ROHRABACHER, California MATTHEW G. MARTINEZ, California EDWARD R. ROYCE, California ROBERT G. TORRICELLI, New Jersey TOBY ROTH, Wisconsin SHERROD BROWN, Ohio ERIC FINGERHUT, Ohio Russell J. Wilson, StaffDirector JAMES MCCORMICK, Republican Professional StaffMember David S. Adams, Professional StaffMember LISA C. Berkson, Professional StaffMember (III) CONTENTS Page WITNESSES David Laux, president, United States ofAmerica-Republic ofChina Economic Council 3 Fritz Attaway, senior vice president, Motion Picture Association of America, representingthe International Intellectual PropertyAlliance 7 Daryl G. Brewster, business director, Global Brand Management, Campbell Soup Company; accompanied by Burt Willis, group director, Government Relations, CampbellSoup Company 9 James S. Arthurs, executive director, international division, Gerber Garment Technology, Inc 11 James E. Howard, vice president and general manager, systems development division, ParamaxSystems Corporation 14 APPENDIX Prepared statements: David Laux 31 FritzAttaway 55 Daryl G. Brewster 66 James S.Arthurs 71 JamesE. Howard 78 Prepared statements submitted forthe record: Hon. Craig Thomas, a Representative in Congress From the State of Wyoming 84 American Natural Soda Ash Corporation 86 TheHaagen-Dazs Company 95 Pillsbury Company 100 The Wine Institute 105 BrandyExportAssociation 110 Nintendo ofAmericanU.S. Video Game Industry 138 (V) U.S.-TAIWAN ECONOMIC RELATIONS MARCH TUESDAY, 30, 1993 House of Representatives Committee on Foreign Affairs, Subcommittee on Economic Policy, Trade and Envi- ronment and the Subcommittee on Asia and the Pacific, Washington, DC. The subcommittees met, pursuant to notice, at 2:05 p.m., in room 2172, Rayburn House Office Building, Hon. Sam Gejdenson (chair- man of the Committee on Economic Policy, Trade and Environ- ment) presiding. Mr. Gejdenson. U.S.-Taiwan relations are at a turning point. Democracy has come to the island and the U.S. trade deficit with Taiwan has steadily been declining. Yet America continues to treat Taiwan like a second-class country. Today's hearing, therefore, comes at an important time in the bi- lateral relations between our two countries. We need to fully re- view U.S. policy toward Taiwan and explore the different ways the United States can improve trade relations with Taipei. In particular, we have to craft a policy which significantly in- creases our exports to Taiwan and supports Taiwan's applications to the GATT and protects the interests of American businesses in that country. Three months ago, I led a trade mission to Taiwan with rep- resentatives of 14 Connecticut companies. The trade mission opened doors for Connecticut exporters and gave all ofus an oppor- tunity to discuss Taiwan's economic future with the nation's top leaders. Two companies, one of which will testify here today, were fortunate enough to sign contracts while they were on the island. I was very impressed by what I saw in Taiwan. While Beijing continues to cling to authoritarian ways, Taiwan has become a flourishing democracy, complete with a legislature questioning gov- ernment decisions every step ofthe way. Taiwan is also a growing market for U.S. goods and services. Tai- wan exports to the United States were worth $15 billion last year and the U.S. trade deficit with Taiwan dropped to $9 billion, down from $19 billion in 1987. I was also impressed by the deep-seated desire of the Taiwanese companies to buy American products, particularly over those made by Japan. Without question, many important issues in the bilateral rela- tionship need to be resolved. Taiwan's constitutional reform process is still ongoing and Taipei has not moved quickly enough to elimi- (1) nate import barriers and protect intellectual property. Resolving these disputes will not be easy and will periodically strain U.S.- Taiwan relations. While the Taiwan Government must move quickly to resolve these concerns, the United States must also take concrete steps to demonstrate its support for Taiwan, to improve the U.S.-Taiwan trade relationship and to promote the interests of American indus- try. First, the United States should become Taiwan's champion in the GATT. Both Taiwan and the PRC have applied to join the GATT, but Beijing has lobbied GATT membership to ensure that the PRC joins before Taiwan. Given the PRC's state-run economy, however, it will likely be years before Beijing's application is accepted. Tai- wan should not be held hostage to the mainland's intransigence and the United States should work to persuade other GATT mem- bers to allow Taiwan to join the GATT as soon as possible. Without question Taiwan must make significant concessions be- fore its GATT application is accepted. Important barriers must be eliminated. Intellectual property laws must be strengthened and enforced. If Taiwan demonstrates a willingness to play by GATT rules, however, the United States must and should play a leader- ship role on Taiwan's behalfat the GATT. Second, U.S. export promotion resources must be marshalled to promote U.S. exports to Taiwan. As a developed nation undergoing a massive $300 billion infrastructure development program, Tai- wan represents a multibillion dollar market for American products. We must use the full resources of the Commerce Department, the Eximbank, OPIC and the Trade and Development Agency to help American firms sell to Taiwan. Third, the United States should stop treating Taiwan like a sec- ond-class country. The United States should dispatch high level government representatives to negotiate the trade differences and to promote American exports. I hope this hearing will be particularly useful because we have several witnesses who are currently doing business in Taiwan and can guide us on the best way to help American firms succeed in that market. I thank today's witnesses. Before hearing from them, I ask for our ranking member, Mr. Roth, to make his opening statement. OPENING STATEMENT OF MR. ROTH Mr. Roth. Thank you, Mr. Chairman, and I will be brief but let mejoin you in welcoming our witnesses today. You are each serving on the front lines of a struggle to make us more competitive in the Asian market. The newspaper headlines may be about the E.C. but Asia is where the real potential for growth is at. No doubt that is what prompted Chairman Gejdenson to focus his latest trade mission on Taiwan. Last year alone, the United States exported $115 billion to nine countries in the East and South Asia. That is one-fourth of all U.S. exports. The same nine countries sold $193 billion to the United States. That is about 35 percent ofall U.S. imports. When you take those two figures together, you see that 80 percent ofour trade def-
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