VZCZCXRO5763
RR RUEHGH
DE RUEHIN #1900/01 1530905
ZNR UUUUU ZZH
R 020905Z JUN 06
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 0493
INFO RUEHC/DEPT OF AGRICULTURE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RUEHBK/AMEMBASSY BANGKOK 3284
RUEHBJ/AMEMBASSY BEIJING 5254
RUEHUL/AMEMBASSY SEOUL 7851
RUEHGP/AMEMBASSY SINGAPORE 6461
RUEHKO/AMEMBASSY TOKYO 7739
RUEHML/AMEMBASSY MANILA 9726
RUEHJA/AMEMBASSY JAKARTA 3862
RUEHKL/AMEMBASSY KUALA LUMPUR 3499
RUEHHI/AMEMBASSY HANOI 3070
RUEHBY/AMEMBASSY CANBERRA 4205
RUEHWL/AMEMBASSY WELLINGTON 1498
RUEHHK/AMCONSUL HONG KONG 6473
RUEHGH/AMCONSUL SHANGHAI 0169
RUEHGZ/AMCONSUL GUANGZHOU 9353

UNCLAS SECTION 01 OF 06 TAIPEI 001900 
 
SIPDIS 
 
SENSITIVE, SIPDIS 
 
STATE PLEASE PASS USTR 
 
STATE FOR EAP/RSP/TC, EAP/EP 
 
USTR FOR STRATFORD AND ALTBACH 
 
USDOC FOR 4420/USFCS/OCEA/EAP/LDROKER 
USDOC FOR 3132/USFCS/OIO/EAP/ADAVENPORT 
USDA FOR FAS/ITP/SHEIKH 
TREASURY FOR OASIA/LMOGHTADER 
TREASURY ALSO PASS TO FEDERAL RESERVE/BOARD OF 
GOVERNORS, AND SAN FRANCISCO FRB/TERESA CURRAN 
 
E.O. 12958: N/A 
TAGS: EINV EFIN ECON ETRD PINR TW
SUBJECT: TAIWAN TIFA: Public and Private Outcomes 
 
 
¶1.  (U) This cable reports public and private outcomes of the Trade 
and Investment Framework Agreement (TIFA) consultations between the 
United States and Taiwan in Taipei during May 25 - 26, 2006: 
 
--Doha and economic developments in Asia-Pacific 
--Government Procurement Agreement 
--Agricultural trade and market access 
--Telecommunications policy and liberalization: 
--Investment and tax issues 
--Pharmaceuticals and medical devices market access 
--New drug approval review system reform 
   --Stages Two and Three validation 
--Intellectual property rights 
--Textiles 
--Secure trade 
--Supporting African growth and development 
--Customs Asia Pacific Reporting System (CAPERS) 
--Insurance supervision 
 
¶2.  Doha and Economic Developments in the Asia-Pacific 
--------------------------------------------- --------- 
 
(U ) A.  Public Outcomes: 
 
(1) Taiwan and the U.S. agree to work together to substantially 
improve market access in order to reach a successful conclusion of 
the Doha Round. 
 
(2) Noting ongoing trends toward Asia-Pacific economic integration, 
the U.S. and Taiwan reaffirmed their commitment to continuing to 
deepen bilateral economic cooperation. 
 
¶3.  Government Procurement Agreement 
------------------------------------ 
 
(SBU) A.  Private Outcome: 
 
(1) TECRO agrees to AIT proposal to approach China in Geneva on WTO 
GPA. 
 
(U) B.  Public Outcome: 
 
(1) AIT and TECRO agree to enhance cooperation on government 
procurement. 
 
¶4.  Agricultural Trade and Market Access 
---------------------------------------- 
 
(U) A.  Public Outcomes: 
 
(1) AIT and TECRO agree to hold discussions to establish a bilateral 
Consultative Committee on Agriculture (CCA) that will address 
agricultural trade and policy issues. 
 
(2) BAPHIQ will review BSE-related bans on non-ruminant products. 
 
(3) AIT and TECRO commit to improve cooperation on resolving SPS 
issues, and adhere to the WTO SPS Agreement and OIE guidelines in 
the development of import requirements. 
 
(4) The U.S. welcomes that the Taiwan Department of Health 
conditionally lifted the ban on import of U.S. beef on January 25, 
 
TAIPEI 00001900  002 OF 006 
 
 
2006, and will continue to provide information on BSE monitoring 
measures and related issues as relevant. 
 
(5) AIT recognizes the importance of TECRO's market access request 
for Pomelos and Longan and will facilitate the approval processes. 
 
(SBU) B.  Private Outcome: 
 
(1) The U.S. welcomes Taiwan's progress in reaching consensus on its 
Country Specific Quota (CSQ) regime and supports the new CSQ system 
to be granted legal status by the WTO as soon as possible. 
 
¶5.  Telecommunications Policy and Liberalization 
--------------------------------------------- --- 
 
(U) A.  Public Outcome: 
 
(1) The U.S. welcomed the establishment of the National 
Communication Commission (NCC) on February 22, 2006. 
 
(2) AIT and TECRO agreed to continue dialogue on how to support fair 
competition in the telecommunications and broadcasting markets 
sector. 
 
¶6.  Investment and Tax Issues 
----------------------------- 
 
1)  Bilateral Tax Agreement 
 
(SBU) A.  Private Outcome: 
 
(1) AIT and TECRO agree that such an agreement would be beneficial. 
AIT and TECRO will be in touch to schedule talks to explore the 
feasibility of such an agreement. 
 
2)  Bilateral Investment Agreement 
 
(U) A.  Public Outcome: 
 
(1) AIT and TECRO agreed to conduct further discussions on ways to 
enhance the bilateral investment relationship. 
 
¶7.  Pharmaceuticals and Medical Devices Market Access 
--------------------------------------------- -------- 
 
1)  Price Volume Survey 
 
(U) A.  Public Outcomes: 
 
(1) AIT and TECRO share the goal of ensuring a transparent, accurate 
and fair process in determining reimbursement rates for 
pharmaceuticals. 
 
(2) BNHI also agreed to hold regular meetings with AIT and private 
sector stakeholders to discuss health care reform issues including 
pricing and reimbursement, the separation of prescribing and 
dispensing and other issues of concern. 
 
(SBU) B.  Private Outcome: 
 
(1) AIT and BNHI agree that they will hold consultations between 
July 1 and September 30, that will address U.S. concerns regarding 
 
TAIPEI 00001900  003 OF 006 
 
 
the price volume survey. 
 
¶8.  New Drug Approval Review System Reform 
------------------------------------------ 
 
(U) A.  Public Outcome: 
 
(1) DOH agrees to develop any further changes to the user-fee system 
through discussion with industry and confirmed that 1) fees are used 
only to support review-related activities for which the fees are 
imposed and 2) a ten percent reduction in review times has resulted 
from the new fees to date. 
 
¶9.  Stage Two and Three Validation 
---------------------------------- 
 
(U) A.  Public Outcome: 
 
(1) The U.S. welcomes that DOH agrees to provide manufacturers with 
six months notice prior to a GMP site inspection. 
 
(SBU) B.  Private Outcome: 
 
(1) The U.S. welcomes BNHI's consensus with the pharmaceutical 
industry groups to revise the system for assigning prices of generic 
drugs at 80% of the prices for the corresponding brand name drug. 
 
¶10.  Intellectual Property Rights 
--------------------------------- 
 
(U) A.  Public Outcome: 
 
1)  AIT commends TECRO's efforts to strengthen IPR protection and 
enforcement and recognizes the significant steps TECRO has taken 
toward creating a healthy environment to support innovation, 
creativity and economic growth.  AIT welcomes TECRO's commitment to 
combating IPR violations, in particular, internet piracy, addressing 
both unauthorized peer-to-peer file-sharing and internet service 
provider (ISP) liability; stopping the unauthorized use of copyright 
material on and around college and university campuses through 
education and policies that deter illegal activities; and protecting 
patented pharmaceuticals.  AIT also supports TECRO's IPR Action Plan 
that outlines initiatives to be undertaken within the next two years 
and looks forward to seeing the fruits of those initiatives. 
2)  While recognizing TECRO's achievements, there remain a few, but 
significant issues yet to be addressed.  To this end, AIT and TECRO 
have agreed to establish consultations, to meet every six months, to 
discuss IP issues of concern.  AIT looks forward to the future 
consultations with TECRO so that practical and concrete solutions 
benefiting both US and Taiwan IP rightholders may be developed. 
(SBU) B.  Private Outcome: 
 
1)  AIT welcomes TECRO's efforts to strengthen intellectual property 
protection and enforcement, in particular the 2006-2008 IPR Action 
Plan.  AIT commends TECRO's commitment to take positive steps in the 
following areas: 
 
(a) Creating an Internet Service Provider (ISP) liability regime 
with incentives for ISPs to cooperate with copyright owners in 
deterring the unauthorized storage and transmission of copyright 
material; 
 
 
TAIPEI 00001900  004 OF 006 
 
 
(b) Continuing to combat the problem of unauthorized peer-to-peer 
file-sharing, including criminal enforcement actions that result in 
arrests, timely prosecution, deterrent sentencing and closure of 
file sharing services; 
 
(c) Providing training and resources to enforcement authorities 
responsible for Internet piracy to enable them to take significant 
enforcement actions; 
 
(d) Implementing and enforcing a policy against unauthorized copying 
of books, journals and teaching materials in university bookstores 
and in photocopy shops on and around university and cram school 
campuses; 
 
(e) Establishing a dialogue among MOEA/TIPO and MOE with the 
copyright industries to address the problem of copyright violations 
on educational campuses and TANet; 
 
(f) Continuing raids of commercial photocopy shops in and around 
universities and cram schools; 
 
(g) Implementing and enforcing a policy by MOE and MOEA/TIPO that 
deters the unauthorized storage and transmission of copyright 
materials on TANet; 
 
(h) Ensuring that the judges on the soon to be created IP Court will 
be qualified to preside over IP cases; 
 
(i) Ensuring that IP Court judges will be adequately trained on 
intellectual property rights; 
 
(j) Conducting regular raids on manufacturing plants and retail 
outlets selling pirated and counterfeit goods; 
 
(k) Conducting public education campaigns to inform the public 
against the prevalence and risks of counterfeit pharmaceuticals; 
 
(l) Initiating consultations among DOH, TIPO, AIT and the 
research-based pharmaceutical industry on the implementation of a 
patent linkage system in Taiwan; 
 
(m) Clarifying the implementation of the data protection provision 
of the Pharmaceutical Affairs Law; 
 
(n) Increasing the oversight of pharmacies through various means 
that could include surveys, periodic investigation or raids based on 
complaints. 
 
2)  TECRO agreed to further discuss AIT's recommendations that: 
 
(a) reconsideration is needed of the policy whereby a pharmacy found 
with evidence to be selling counterfeit pharmaceuticals may be 
investigated by the prosecutor's office and their business license 
suspended for a maximum of three years, such that 
 
--the revocation of the business license be commensurate with the 
judicial ruling, 
 
--deterrent administrative penalties be available if the 
prosecutor's office chooses not to prosecute. 
 
(b) effective enforcement includes the seizure and destruction of 
 
TAIPEI 00001900  005 OF 006 
 
 
pirated and counterfeit goods, the seizure and appropriate 
disposition of the material and implements used to manufacture the 
infringing goods, arrests, prosecutions and deterrent level 
sentences [that are actually served]; 
 
3)  AIT agreed to further discuss: 
 
(a) TECRO's request for relaxing limitations to parallel imports and 
rental rights in the Taiwan Copyright Act; 
 
(b) TECRO's request for recognition of Taiwan plant breeders' rights 
and agreed to work towards mutually agreeable solutions. 
 
4)  TECRO and AIT agree to establish a mechanism for regular 
consultations every six (6) months to discuss these and other IPR 
protection and enforcement issues. 
 
¶11.  Textiles 
------------- 
 
(SBU) A.  Private Outcome: 
 
(1) AIT and TECRO agree to hold meetings to discuss a Textile 
Transshipment MOU within one month of receipt by TECRO of the draft 
from AIT. 
 
¶12.  Secure Trade 
----------------- 
 
1)  Container Security Initiative: 
 
(U) A.  Public Outcome: 
 
(1) The U.S. appreciates the seizure of $1.99 million in counterfeit 
U.S. currency at Kaohsiung Port since joining CSI, and welcomes 
Keelung Harbor's active preparations to join CSI in order to expand 
cooperation with the United States in fighting against global 
terrorism. 
 
2)  Export Control Cooperation: 
 
(U) A.  Public Outcome: 
 
(1) AIT and TECRO recognize progress in securing trade and 
reaffirmed the importance of continuing to enhance efforts towards 
this end.  The U.S. welcomes that as of June 1, 2006, Taiwan will 
add 87 sensitive items to its list of SHTC items subject to export 
controls to North Korea and Iran, and that Taiwan will consider more 
items to be included in the SHTC list in the future. 
 
3)  Megaports: 
 
(SBU) A.  Private Outcome: 
 
(1) AIT and TECRO welcome the signing of an MOU on Megaports and 
look forward to the next steps in implementation. 
 
¶13.  Supporting African Growth and Development 
--------------------------------------------- - 
 
(U) A.  Public Outcome: 
 
 
TAIPEI 00001900  006 OF 006 
 
 
(1) AIT and TECRO held productive discussions relating to our shared 
goal of empowering the African economies by providing greater trade 
and investment-enhancing opportunities and related trade 
capacity-building assistance. 
 
¶14.  Customs Asia Pacific Reporting System (CAPERS) 
--------------------------------------------- ------ 
 
(SBU) A.  Private Outcome: 
 
(1) CAPERS helps strengthen and safeguard trade relationships, 
enhances the prevention of narcotics/contraband smuggling, and 
assists with the detection of other violations of Customs laws by 
the timely exchange of information.  AIT welcomes TECRO's support 
for these goals and will support Taiwan's application to join 
CAPERS. 
 
¶15.  Insurance Supervision 
-------------------------- 
 
(U) A.  Public Outcome: 
 
(1) AIT took note of TECRO concerns relating to insurance 
supervision and agreed that AIT would serve as a liaison to assist 
in this area. 
 
YOUNG