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,

156 Pages·1994·4.8 MB·English

by  United States. Congress. House. Committee on Foreign Affairs. Subcommittee on Economic Policy, Trade, and Environment

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-