No Near Term Resolution to US Beef Controversy
China Times editorial (Taipei, Taiwan, ROC)
March 3, 2012
Summary: The U.S. beef imports issue is not merely a food safety issue. It is a Taipei/Washington trade issue, Many political and diplomatic considerations are involved. Many parties are involved. It has gone far beyond the technical realm. The problem cannot be resolved overnight. Sanchez is not coming this time. Maybe that is just as well. The bickering continues. Better not allow it to further undermine relations between Taipei and Washington.
Full Text below:
Under Secretary of Commerce for International Trade Francisco . Sanchez was scheduled to arrive in Taipei on March 4th for a three-day visit. But his trip was suddenly canceled. Washington said the cancellation was due to "unforeseen circumstances." It declined to specify the reason. But it also issued a press release criticizing our government's decision to ban the import of US beef containing clenbuterol or ractopamine. Sanchez was of course coming to promote U.S. beef exports to Taiwan. Beef exports are not just American agricultural products. They even affect U.S. trade policy and domestic U.S. politics.
The AIT previously issued a press release, announcing that Sanchez was coming to Taiwan. It stressed that the purpose of Sanchez's trip was to promote Obama's "export multiplier" plan. Beef is an important part of the plan.
Since the 2008 financial crisis, the United States has sought to reverse the trade deficit. President Obama's State of the Union address on January 10 included a plan to double exports by mid-2014. The plan is directed mainly at farmers and SMEs. It hopes to create two million jobs. Over the past several years, Washington has been unhappy with the way Taipei dealt with the beef issue. The two sides finally signed a protocol in mid-2009, But the Legislative Yuan changed its content. In 2011 Washington was about to send people to talk about TIFA when the clenbuterol and ractopamine controversy erupted. Bilateral economic and trade relations have been frozen ever since.
WikiLeaks Taiwan indicates that Washington has complained about Taipei's attitude again and again. The administration and congress have dealt with the matter in chaotic fashion. Each year the American Chamber of Commerce makes its annual visit to Washington. Members heard senior officials openly accuse Taipei of being an unreliable trading partner. In fact, U.S. beef imports last year were valued at 310 million USD. Taiwan's imports of U.S. goods were a mere 17%. They were so small as to be insignficant. But it has become a symbolic issue. Washington is angry. It is determined to force Taipei to agree.
We think Washington is insufferably arrogant. It is insisting that Taipei accept agricultural products harmful to the public's health. The U.S. beef issue affects the middle class the most. The middle class is the most concerned about food safety, US pressure has led to a powerful backlash that transcends Blue vs. Green partisanship. It is not something the ruling party can contain.
Ma Ying-jeou has been elected to a second term. This offers us a new opportunity. Taipei attaches great importance to Sanchez's visit. This means that regularly scheduled TIFA meetings, suspended since mid-2007, may be restored, This means that initial consultations on the Trans-Pacific Partnership (TPP) are now possible.
But the Legislative Yuan passed a resolution yesterday, saying that the Executive Yuan may not issue an executive order permitting imports. That means imports before June of this year are impossible. The Executive Yuan's panel of experts is subject to outside pressure, The entire meeting must be made public. As a result those who favor the inclusion of clenbuterol or ractopamine are afraid to speak up. As a result, Sanchez suddenly canceled his trip to Taiwan two days before it was scheduled to take place.
Consider the bigger picture. The U.S. beef import controversy is not an isolated phenomenon. South Korean protests have been the most vehement of all. But a free trade agreement is a powerful incentive. The Lee Myung-bak government rammed beef imports through. Japan is still reviewing the matter. Washington is particulary concerned bout the clenbuterol or ractopamine issue. It has ulterior motives. It wants to lay the groundwork. Its real target is Mainland China. Beijing imposes across the board restrictions on U.S. meat imports. Clenbuterol and ractopamine are categorically prohibited. Taipei's handling of the matter will set a precedent. It will have a major impact on whether Beijing opens its markets to U.S. beef.
South Korea initially imposed a 40% tariff on U.S. beef imports. After the two sides signed a free trade agreement, the U.S. Congress refused to ratify the treaty because of the tariff. It insisted that FTAs be unfettered. South Korea was forced to reduce the tariff incrementally year to year. That enabled a free trade agreement to take effect on the 15th of this month. Japan still imposes many restrictions on U.S. beef. Every time diplomats and trade officials from the two sides meet, beef imports come up. Late last year, Japan finally agreed to permit beef imports. Washington is using PTTs as a carrot. Its position is, "No US beef, no PTT." This is not merely an administration bargaining chip. It is evidence of pressure from members of Congress. Sanchez still intends to visit Japan. Washington is applying pressure on Tokyo, just as it is applying pressure on Taipei. The U.S. beef industry lobby is extremely powerful. Unlike other industries, the American Meat Association focuses its efforts on select members of Congress and regulatory agencies. As a result it is able to block new meat safety requirements with fewer political contributions. Regulatory agencies whose function was to consumer protection, end up favoring industry. This is true for U.S. consumers. It is even more true for consumers in other countries.
This year is an election year in the US, The theme of the election is job creation, Agricultural state legislators continue to pressure the federal government to find new markets. Congressmen and the President face election pressures, The pressure on the Commerce Department and the State Department is particularly intense, They must produce results.
The U.S. beef imports issue is not merely a food safety issue. It is a Taipei/Washington trade issue, Many political and diplomatic considerations are involved. Many parties are involved. It has gone far beyond the technical realm. The problem cannot be resolved overnight. Sanchez is not coming this time. Maybe that is just as well. The bickering continues. Better not allow it to further undermine relations between Taipei and Washington.