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Taiwan concerned by U.S. plan for unfair trade probe against China

2017/08/13 18:38:03

CNA file photo

Taipei, Aug. 13 (CNA) A possible move by the United States to launch an investigation into China's unfair trade practices based on Section 301 of the Trade Act has Taiwan worried because many of its products sold to the U.S. are processed or assembled in China.

Fearing that Taiwan could be hit by retaliatory actions by Washington if it finds forced technology transfers or intellectual property theft by China, Bureau of Foreign Trade Director-General Yang Jen-ni (楊珍妮) said Sunday the agency will carefully assess the situation as soon as U.S. President Donald Trump orders the probe.

U.S. senior administration officials have said Trump will sign an administrative memorandum on Monday ordering the Office of the United States Trade Representative to start a Section 301 investigation into China's trade practices, including alleged intellectual property theft.

Yang explained that the 301 Section of the Trade Act of 1974 was designed to investigate "unfair trade" practices, including in areas involving intellectual property rights such as trademarks, patents and copyrights.

A Section 301 investigation normally lasts one year. After the investigation is completed, the trade office will discuss its findings with related American companies and the Department of Commerce before the president proposes remedial measures, according to Yang.

Trump has not yet signed an order to launch such an investigation, she said, and her agency cannot assess its possible impact on Taiwan until Washington discloses detailed information on the products that will be investigated.

Since the World Trade Organization (WTO) was established in 1995, the U.S. has not imposed any trade investigations or sanctions based on Section 301 because that kind of unilateral action violates WTO rules requiring trade disputes among its members to be addressed on the WTO platform.

Yang said that before joining the WTO in 2002, Taiwan had been subjected to the Section 301 investigations because its trade regulations had not been aligned with global norms.

Gordon Sun (孫明德), director of the Economic Forecasting Center under the Taiwan Institute of Economic Research, warned that if the U.S. eventually imposes trade sanctions against China, "Taiwan should not take pleasure in (China's) misfortune."

Sun said there were two kinds of Taiwanese products that could be hurt by possible trade sanctions, the most obvious being goods assembled in China before they are shipped to the U.S.

The second are products that are similar to those China exports in large quantities to the U.S., such as steel or petrochemical products, Sun said.

The United States, for example, has always complained that China dumps steel on its market, and if the Trump administration were to impose heavy tariffs on Chinese steel products, the retaliatory measure could draw other countries in, including Taiwan, which counts steel as one of its major exports, Sun said.

Reuters cited U.S. senior administration officials as saying on Saturday that President Trump will order his top trade adviser on Monday to determine whether to investigate Chinese trade practices that force U.S. firms operating in China to turn over intellectual property.

Trump was reported to direct U.S. Trade Representative Robert Lighthizer to determine if an investigation is warranted of "any of China's laws, policies, practices or actions that may be unreasonable or discriminatory, and that may be harming American intellectual property, innovation and technology."

(By Liao Yu-yang and Elizabeth Hsu)