When President Tsai Ing-wen eased restrictions on U.S. pork and beef imports on August 28, she took a gamble to improve U.S.-Taiwan trade relations and smooth the way towards a bilateral trade agreement. The opposition party, Kuomintang (KMT), has vowed to seek a referendum to block the move. A free trade agreement has long been on Taipei and Washington’s wish list as a measure to draw the two partners closer together in the economic sphere. But behind a long resistance to opening Taiwan to U.S. pork and beef imports is a strong domestic concern with the use of the growth hormone ractopamine, as well as mad cow disease (bovine spongiform encephalopathy, or BSE), and a preference for pork and beef products from markets without controversial additives. Easing the restrictions on these U.S. imports does not guarantee a surge in U.S. pork and beef exports to Taiwan—consumers in Taiwan are lukewarm towards U.S. pork and beef—and thus only a partial victory for U.S. trade advocates. Yet if the reduced restrictions convince the United States to make progress on a trade agreement, the measure could be a win for Tsai’s second-term trade policy towards the United States.
The rationale behind the Tsai administration’s decision was that the reduced restrictions followed an accumulation of data on the effects of ractopamine and that the U.S.’s risk level for BSE had been assessed as negligible by the World Organization for Animal Health since 2013. In addition, the administration decided that Taiwan needed to better align itself with international norms on pork and beef trade in order to signal to other trade partners that Taiwan is willing to resolve trade obstacles. In her announcement, Tsai cited Japan, South Korea, and Singapore as recent examples of countries that have allowed imports of pork with similar safety standards. Tsai is also likely considering the trade agreement that Japan signed with the United States in October 2019, which included lower tariffs on U.S. pork and beef in a much broader trade deal. After the Trump administration withdrew from the Trans-Pacific Partnership trade agreement in 2017, renegotiating bilateral trade agreements have been Trump’s preferred approach to trade relations, making progress incremental and hard-won. For Tsai to move on the pork and beef issue is to send a strong signal to the United States that her administration wants to strike a deal.
The good news for U.S. pig and cattle farmers, however, does not guarantee a strong welcome in Taiwanese marketplaces yet. Opposition to U.S. pork and beef is well documented. Surveys conducted by Taiwan Indicators Survey Research at the end of the Ma Ying-jeou administration showed most respondents objected to importing these U.S. products—78.6% in 2013, which softened only slightly to 72.3% in 2016. A more recent survey by the TVBS Public Opinion Survey Center, conducted August 31 to September 2, 2020, found that 64% of respondents disagreed with the decision on imports. The survey also found that 80% said they would not purchase pork containing the growth hormones, and, after Tsai’s announcement, the president’s approval rating dropped four points to 48%. While these surveys show that public opinion regarding U.S. pork and beef is slowly changing, the majority still have reservations and resistance to the products, which could translate into disappointing sales for U.S. producers. Tsai promised subsidies to support Taiwan’s pig farming industry and pledged to ensure that pork and beef products in markets are labeled with their origin. Whether this is enough to reassure consumers and bolster Tsai’s support remains to be seen.
The next move belongs to the United States. Tsai’s decision has come at the cost of some domestic political capital, and the KMT-supported referendum is yet to come, but moving forward in trade negotiations would be a reward. There is a short window of safety for negotiation on the Taiwan side: the 2021 referendums and 2022 local elections may present Tsai’s critics the opportunity to solidify opposition to the import measures given the local impact of Tsai’s moves. The U.S. presidential election presents the possibility of a new administration negotiating with Taiwan, but the strong bipartisan support that Taiwan has enjoyed in Washington is a sign that there might be the willingness to move ahead regardless of who sits in the White House. Washington can take Taipei’s offering of pork and beef imports as a gesture of goodwill that provides a valuable opportunity to make substantial progress on a U.S.-Taiwan trade agreement.
Tsai’s Trade Gamble: Can Pork and Beef Imports Pave the Way to a Trade Deal?
By Pamela Kennedy Author
China
When President Tsai Ing-wen eased restrictions on U.S. pork and beef imports on August 28, she took a gamble to improve U.S.-Taiwan trade relations and smooth the way towards a bilateral trade agreement. The opposition party, Kuomintang (KMT), has vowed to seek a referendum to block the move. A free trade agreement has long been on Taipei and Washington’s wish list as a measure to draw the two partners closer together in the economic sphere. But behind a long resistance to opening Taiwan to U.S. pork and beef imports is a strong domestic concern with the use of the growth hormone ractopamine, as well as mad cow disease (bovine spongiform encephalopathy, or BSE), and a preference for pork and beef products from markets without controversial additives. Easing the restrictions on these U.S. imports does not guarantee a surge in U.S. pork and beef exports to Taiwan—consumers in Taiwan are lukewarm towards U.S. pork and beef—and thus only a partial victory for U.S. trade advocates. Yet if the reduced restrictions convince the United States to make progress on a trade agreement, the measure could be a win for Tsai’s second-term trade policy towards the United States.
The rationale behind the Tsai administration’s decision was that the reduced restrictions followed an accumulation of data on the effects of ractopamine and that the U.S.’s risk level for BSE had been assessed as negligible by the World Organization for Animal Health since 2013. In addition, the administration decided that Taiwan needed to better align itself with international norms on pork and beef trade in order to signal to other trade partners that Taiwan is willing to resolve trade obstacles. In her announcement, Tsai cited Japan, South Korea, and Singapore as recent examples of countries that have allowed imports of pork with similar safety standards. Tsai is also likely considering the trade agreement that Japan signed with the United States in October 2019, which included lower tariffs on U.S. pork and beef in a much broader trade deal. After the Trump administration withdrew from the Trans-Pacific Partnership trade agreement in 2017, renegotiating bilateral trade agreements have been Trump’s preferred approach to trade relations, making progress incremental and hard-won. For Tsai to move on the pork and beef issue is to send a strong signal to the United States that her administration wants to strike a deal.
The good news for U.S. pig and cattle farmers, however, does not guarantee a strong welcome in Taiwanese marketplaces yet. Opposition to U.S. pork and beef is well documented. Surveys conducted by Taiwan Indicators Survey Research at the end of the Ma Ying-jeou administration showed most respondents objected to importing these U.S. products—78.6% in 2013, which softened only slightly to 72.3% in 2016. A more recent survey by the TVBS Public Opinion Survey Center, conducted August 31 to September 2, 2020, found that 64% of respondents disagreed with the decision on imports. The survey also found that 80% said they would not purchase pork containing the growth hormones, and, after Tsai’s announcement, the president’s approval rating dropped four points to 48%. While these surveys show that public opinion regarding U.S. pork and beef is slowly changing, the majority still have reservations and resistance to the products, which could translate into disappointing sales for U.S. producers. Tsai promised subsidies to support Taiwan’s pig farming industry and pledged to ensure that pork and beef products in markets are labeled with their origin. Whether this is enough to reassure consumers and bolster Tsai’s support remains to be seen.
The next move belongs to the United States. Tsai’s decision has come at the cost of some domestic political capital, and the KMT-supported referendum is yet to come, but moving forward in trade negotiations would be a reward. There is a short window of safety for negotiation on the Taiwan side: the 2021 referendums and 2022 local elections may present Tsai’s critics the opportunity to solidify opposition to the import measures given the local impact of Tsai’s moves. The U.S. presidential election presents the possibility of a new administration negotiating with Taiwan, but the strong bipartisan support that Taiwan has enjoyed in Washington is a sign that there might be the willingness to move ahead regardless of who sits in the White House. Washington can take Taipei’s offering of pork and beef imports as a gesture of goodwill that provides a valuable opportunity to make substantial progress on a U.S.-Taiwan trade agreement.
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