[At-Large] [APAC-Discuss] Draft Trans Pacific Partnership Agreement on IP

Salanieta T. Tamanikaiwaimaro salanieta.tamanikaiwaimaro at gmail.com
Fri Aug 31 19:23:24 UTC 2012

Dear All,

Whilst on the Trans-Pacific Partnership, the US Assistant Secretary Jose
Fernandez made some remarks which are interesting. Worthwhile noting is the
inclusion of Mexico, Canada and Japan.

Here you go:
Strengthening the U.S.-Taiwan Economic Relationship

Jose W. Fernandez
Assistant Secretary, Bureau of Economic and Business Affairs
American Chamber of Commerce
Taipei, Taiwan
August 5, 2012


*I. **Introduction*

Thank you. This is my first trip to Taiwan and I continue to marvel at the
numerous cultural and economic ties that bind our people. One of our ties
was illustrated to me as I read the paper this morning. I enjoyed seeing
that Jeremy Lin’s visit took top billing in the newspaper, and the meeting
between President Ma and I drew a little less attention.

Let me give you just one example that is illustrative of the larger U.S. –
Taiwan relationship. It is a great American tradition to start new
companies in a home garage. In an Irvine, California garage in 1988 Linksys
was born. The creators of this now ubiquitous line of home computer
networking devices were Taiwan immigrants Janie and Victor Tsao. At the
time they founded Linksys, they were also working as consultants
specializing in pairing U.S. technology vendors with manufacturers in
Taiwan. That pairing has become emblematic of the U.S. – Taiwan economic
relationship. The latest numbers show that two-way trade between the United
States and Taiwan in electrical machinery hovers around $23 billion per

*II. **Strategic Rebalancing Toward Asia*

While Taiwan has been exemplary as one of the so-called “Asian Tigers,” I
want to put our economic relationship with Taiwan in the larger Asian
context before discussing Taiwan specifically. That larger context is our
work on the Trans Pacific Partnership, and the Select USA initiative.

As you know, the global economic crisis of the past few years has pushed us
in the United States to pursue our own economic recovery. This is a
two-sided coin, with an eye toward regional trade liberalization on one
side, and concerted efforts to attract more foreign investment to the
United States on the other. At all levels of the U.S. government, we are
broadening and deepening our economic relationships throughout the Asia
Pacific region. We are acutely aware that reinvigorating our economy at
home goes hand in hand with partnering on economic growth abroad.

The United States has long been involved in developments in the Asia
Pacific region. We are proud that our contributions to regional security
here helped create the conditions that brought more people out of poverty
faster than anywhere else in history. That engagement continues today and
the futures of the United States and the Asia Pacific are inextricably
linked. As Secretary of State Hillary Clinton has highlighted, we are not
just a diplomatic or military power here. We are an economic force as well.
In 2010 alone, our exports to the Pacific Rim were over $320 billion,
supporting 850,000 American jobs.

But our work is not finished. One of our country’s great challenges in this
century will be to establish a stronger network of trade links and
practices around the Pacific Rim. Our recently enacted Free Trade
Agreements with South Korea and Colombia, and our commitment to the
Trans-Pacific Partnership, are clear demonstrations that we are here to

I am proud to note that the American Institute in Taiwan (AIT) has been a
very active promoter of these efforts. In fact, they have been so
successful in working to promote America’s economic relationship with
Taiwan that I was able to personally congratulate the former Director, Bill
Stanton, on winning my award for export promotion in 2011. He also received
the State Department’s coveted Cobb award for global trade promotion
efforts. That’s two awards in the same year to one man, something that
doesn’t happen very often in the State Department. The AIT team in Taipei
and Kaohsiung (“GOW shung”) is carrying on that tradition and I expect
great achievements from the incoming leadership team here in Taipei.

All of these individual efforts fit into our larger work toward regional
trade liberalization. Also supporting this effort is our commitment to the
Trans-Pacific Partnership.

Looking ahead to the next generation of trade agreements, we are aiming at
crafting an agreement that addresses new and emerging trade issues and
challenges. The Trans-Pacific Partnership, or TPP, includes the United
States, along with Australia, Brunei Darussalam, Chile, Malaysia, New
Zealand, Peru, Singapore, and Vietnam. It is a high-standard, broad-based
regional agreement. We see the TPP as the most credible pathway to broader
Asia-Pacific regional economic integration.

The agreement will include core issues traditionally found in trade
agreements, such as industrial goods, agriculture, and textiles as well as
rules on intellectual property, technical barriers to trade, labor, and the
environment. But it will also address cross-cutting issues not previously
found in trade agreements, such as making the regulatory systems of TPP
countries more compatible so U.S. companies can operate more seamlessly in
TPP markets. It will also help innovative, job-creating small- and
medium-sized enterprises participate more actively in international trade.
Equally important is addressing new emerging trade issues, such as trade
and investment in innovative products and services, and ensuring that
state-owned enterprises compete fairly with private companies and do not
distort competition in ways that put U.S. companies and workers at a

The United States is participating in the TPP as the best vehicle to
advance our economic interests and to promote economic growth and
development in the critical Asia-Pacific region. Expanding U.S. exports is
critical to our economic recovery and to the creation and retention of
high-quality jobs in the United States. With its rapid growth and large
markets, there is no region with which expanding our trade is more vital
than the Asia Pacific.

The TPP countries recently announced the addition of Mexico and Canada to
the negotiations. Late last year Japan also formally expressed interest in
beginning consultations with TPP member countries with a view to possibly
joining the negotiations. Candidate countries for TPP must demonstrate
through their actions and through bilateral consultations with each TPP
country their readiness to meet the standards and objectives of the
agreement. Once those bilateral processes are concluded, the current TPP
partners must decide by consensus before a new member can participate. In
short, we are excited by the possibilities created in the Asia-Pacific by
the TPP, and are working very hard to make it a reality by the end of this

Let’s move on to another program we just started, Select USA. So one side
of the coin of economic recovery is expanding opportunities for U.S.
companies to do business effectively abroad. The other side of that coin is
the work that we do at home to encourage investment in the United States.
The United States consistently ranks at the top of most major indicators
for its attractive business and investment climate. In fact, from 2006
through 2010, the United States received more FDI than any other country.
The FDI flow into the United States in 2010 - $228 billion - was more than
double the flow into any other country in the world, and despite economic
difficulties of the time, 49 percent greater than the FDI flow into the
United States in 2009. At the same time, total Taiwan direct investment
flow in the United States was over $5 billion in 2010, an increase of 14.7%
from 2009.

Under a program called SelectUSA, the U.S. Departments of Commerce and
State engage partners around the world, as I am doing here, to promote
investment into our dynamic economy. SelectUSA showcases how the United
States is the world’s premier business location and provides easy access to
federal-level programs and services related to business investment.

Why do I say that the United States is the world’s premier business
location? Because we are the world’s largest economy; we consistently rank
at the top of most major indicators for our attractive business and
investment climate; our own investment in research and development makes us
the world’s center for innovation; and our leadership in protecting
intellectual property with a transparent and predictable legal system makes
doing business in the U.S. both cost-efficient and secure. Also, one of the
strongest reasons will always be the quality of our higher education,
particularly in science and engineering. Taiwan people in the United States
are well aware of this: 80 percent have achieved some level of higher
education, particularly in these fields and in medicine. I understand that
the U.S. regulatory environment can be daunting to some investors, but
through our hardworking representatives at the American Institute in
Taiwan, and SelectUSA and other U.S. government partners back in
Washington, we can help connect investors with the business counseling and
training they may need to comply with applicable regulations.

We can also direct you to the different states’ economic development
agencies, making sure you get connected to the right partners for your
investment selection process.

*III. **U. S. – Taiwan Economic Relations*

Where does Taiwan figure into this picture? How can Taiwan partner with us
and benefit from this wealth creation? Today, Taiwan is our 10th largest
trading partner and our 15th largest export market. It would surprise many
people but the United States actually trades more with Taiwan than with
France; and Taiwan-U.S. trade is at near the same level as India-U.S.
bilateral trade. The United States is Taiwan’s largest foreign investor,
and Taiwan companies have made significant investments in the United
States. Historically, the United States has been the strongest champion of
Taiwan’s participation in global trade bodies such as the World Trade
Organization and the APEC forum. Our strong economic relationship covers
more than six decades. Taiwan has been an invaluable partner in influencing
others to embrace reform and strive for economic growth.

In recent years, however, this immensely valuable relationship has hit some
bumps in the road that hinder our partnership and progress. We can’t afford
these bumps and need to make sure that they do not detract from efforts to
make full use of our potential. We were pleased to see that the Legislative
Yuan recently took action that will clear the path for Taiwan to establish
a maximum residue limit for ractopamine in beef, eliminating a serious
impediment to U.S. beef imports. U.S. trade agencies will be monitoring
implementation of the regulatory measures needed to allow U.S. beef imports
to resume. These steps will be important in helping to rebuild confidence
in our bilateral trade relationship.

We know from our own experience that adhering to bilateral and multilateral
trade commitments is not always easy, but it is essential to maintaining
the credibility that serves as the foundation of what has long been a
positive, constructive relationship between trading partners.

Of course our bilateral economic relationship goes well beyond this
particular issue and we have continued to engage Taiwan at the working
level and via our capable colleagues at AIT on the full range of important
bilateral trade and investment issues. For example, the United States
worked for many years in support of Taiwan’s candidacy to join the WTO
Government Procurement Agreement. These joint efforts were rewarded when
Taiwan acceded to the Agreement in 2009. Taiwan has already made many
reforms to its procurement practices, and we stand ready to assist as
Taiwan continues to harmonize its measures with global best practices with
regard to transparency, contract terms, and licensing.

Taiwan has made tremendous progress over the years in improving
intellectual property rights protection and enforcement, and the United
States has carried out significant bilateral cooperation activities on
intellectual property rights—IPR—issues. Still, challenges remain,
including with regard to online infringement and the theft of trade
secrets. During my time here in Taiwan I have visited companies that have
had their technology stolen and heard their stories. For U.S. firms the
protection of IPR is so vital because so many of our exports derive from
IPR. A recent study estimated that 75% of U.S. exports involve IPR. Taiwan
aspires to be an economy based on innovation, and together our unceasing
efforts will ensure that Taiwan’s IPR enforcement regime meets the highest
standards. Improved protection of trade secrets in Taiwan will help both
foreign and domestic firms be competitive and innovative in today’s
knowledge-based economy. The bottom line: we have made major progress over
the years on many critical issues when both sides have been prepared to
work together. The United States sincerely desires a reinvigorated trade
relationship with Taiwan. It’s already generally good, but we can do better.

Like the United States, Taiwan is also pursuing trade liberalization. We
understand the Ma Administration has indicated a desire to be considered
for the TPP in eight years. As a gold standard for future trade agreements
in the region, the TPP requires members to embrace ambitious and
comprehensive liberalization and open their markets to competition. We
commend President Ma for recognizing the importance of trade integration,
and for his expressed determination to push forward liberalization measures
that would help Taiwan make its case as a possible candidate for future
trade agreements.

Change will not be easy, but the benefits of liberalization are clear:
stronger and more competitive firms, better services, wider availability of
products at lower prices, greater efficiency, and smoother integration into
the world marketplace. More comprehensive economic liberalization will be
an essential component for securing Taiwan's economic future. Real
liberalization will demonstrate Taiwan's commitment to trade integration
and potential inclusion in various trade arrangements. This includes
comprehensive, bilateral FTAs—such as Taiwan's ongoing negotiations with
Singapore—which is an important first step. As Taiwan's leaders implement
meaningful market liberalization measures and pursue new trade agreements,
firm resolve and commitment to free market principles as a responsible WTO
member are essential attributes to live by. We look forward to deepening
our trade and economic interaction with Taiwan. We will support Taiwan as
it embraces these fundamental prerequisites to effective and meaningful
trade integration. Everyone in this room is an important element of what we
hope to do.

*IV. **Next Steps & Conclusion*

Just as Janie and Victor Tsao understood when they founded Linksys nearly
25 years ago, trade between Taiwan and the United States is vital to the
prosperity of both. The United States and Taiwan have a long and positive
history of cooperation and many shared interests in the region. We are
hopeful that the positive recent steps Taiwan has taken to address the beef
issue are a demonstration of the sustained commitment that will be needed
to reenergize our bilateral trade dialogue. To be sure, Taiwan, like any
democracy, will face tough choices in order to live up to its international
obligations and to put its long-term economic interests above domestic
politics. Taiwan is a part of the Asia-Pacific region’s economic future. We
look forward to working with Taiwan as it builds cooperative and credible
partnerships throughout the region, including with the United States.

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