Dwi Wanna
The Retail Committee of the American Chamber of Commerce in Taiwan has issued a comprehensive set of recommendations aimed at refining the nation’s business climate, urging the government to prioritize regulatory transparency, administrative efficiency, and the adoption of digital technologies. These proposals come at a pivotal moment in U.S.-Taiwan relations, following the landmark Agreement on Reciprocal Trade (ART) and the ongoing "Healthy Taiwan" initiatives spearheaded by the administration of President Lai Ching-te. The Committee emphasizes that by fulfilling trade-related commitments and modernizing "analog-era" regulations, Taiwan can significantly boost consumer confidence and solidify its position as a premier destination for international investment.
Strengthening the U.S.-Taiwan Trade Trajectory through ART Implementation
The momentum of U.S.-Taiwan economic cooperation reached a significant milestone with the conclusion of the Agreement on Reciprocal Trade (ART) earlier this year. A central pillar of the Committee’s current advocacy is the fulfillment of specific commitments made under this framework, particularly regarding the dietary supplement industry.
In February, Vice Premier Cheng Li-chiun successfully oversaw the conclusion of the ART, which established a path toward reducing tariff rates on dietary supplements to 10%. However, the Retail Committee notes that the practical implementation of these reductions remains stalled due to a lack of clear regulatory definitions. Currently, the Customs Administration faces challenges in applying the reduced rates because dietary supplements lack a clearly defined category aligned with the World Customs Organization’s (WCO) Harmonized System.
The Committee argues that establishing a definitive timeline for these tariff reductions is essential for the success of President Lai’s "Healthy Taiwan" and "888 Health Program" initiatives. By lowering the cost of high-quality imported supplements, the government can directly improve public health outcomes. The industry is calling for a standardized classification system that would allow for seamless customs processing, ensuring that the benefits of the ART reach Taiwanese consumers without further delay.
Balancing Food Safety and Trade Diversification: The Glyphosate Debate
A significant portion of the Committee’s recommendations focuses on the need for science-based risk assessments in food safety regulations. A point of contention remains the Maximum Residue Limit (MRL) for glyphosate, a widely used herbicide. While Taiwan announced MRL standards for glyphosate in 2019, it subsequently removed them for several applications.
Under Taiwan’s current "positive list" system, the absence of a specific MRL for a commodity effectively defaults to a "non-detective" standard. The Committee contends that this creates a technical barrier to trade, particularly for U.S.-produced crops where glyphosate is legally and safely utilized according to international standards. The proposal suggests that Taiwan should align its temporary MRL standards with regions that share similar dietary habits, such as Japan, when local data is unavailable.
By re-evaluating glyphosate through a rigorous risk assessment and re-establishing appropriate MRLs, the Committee believes Taiwan can avoid unnecessary trade interruptions and prevent food waste. This move is seen as vital for maintaining a diverse supply of imported food products, which is a cornerstone of food security and robust trade relations.
Leveraging Artificial Intelligence to Optimize Border Inspections
In a move toward "Digital Governance," the Retail Committee has proposed the integration of Large Language Models (LLMs) and Artificial Intelligence (AI) to streamline border food inspections. Currently, the Taiwan Food and Drug Administration (TFDA) requires importers to provide the exact name of manufacturing facilities. However, minor variations in nomenclature—such as "Co." versus "Company," or "Ltd." versus "Limited"—frequently trigger administrative flags.
According to the Committee, these inconsistencies often require manual explanations and documentation, leading to delays of a week or more. By deploying AI to recognize these common variations and language differences (including Japanese Kanji and Chinese variations), the TFDA could significantly reduce the administrative burden on both the government and the private sector. Furthermore, the Committee suggests that for companies operating multiple facilities within the same country, the TFDA should allow the use of the parent company name as the "manufacturer" to simplify the application process.
Modernizing Traditional Chinese Medicine and Dual-Use Ingredients
The traditional Chinese medicine (TCM) sector and the therapeutic food industry are also in need of regulatory updates. Despite the implementation of the Customs-Port-Trade (CPT) Single Window, the Committee reports that redundant batch-by-batch notifications continue to plague the Department of Chinese Medicine and Pharmacy (DCMP) system.
The Committee recommends a shift away from these redundant notifications to eliminate administrative duplication. Moreover, there is a call to update the "medicine-food homology" list—a list of ingredients that are classified as both food and medicine. The Committee notes that regulatory progress in this area has stalled, causing Taiwan’s therapeutic food sector to lag behind regional competitors. By aligning these frameworks with global scientific trends and streamlining clearance processes, Taiwan can foster innovation in its domestic health food market.
Advancing Digitalization in Cross-Border Retail and Customs
While the Ministry of Digital Affairs (MODA) has been active in promoting electronic signatures and digital infrastructure, the Retail Committee points out that many customs-related processes remain tethered to paper-based requirements. The reliance on the Citizen Digital Certificate for online procedures is cited as a significant hurdle that increases processing time and user difficulty.
The Committee’s proposal highlights three key areas for digital prioritization:
- Long-term customs-clearance authorization: Transitioning from paper to electronic authorization through the Customs Administration.
- High-dosage dietary supplements: Streamlining self-use declarations under the TFDA.
- Bluetooth device declarations: Digitizing the process through the National Communications Commission (NCC).
The Committee argues that a consistent, cross-agency application of electronic signatures would not only enhance trade facilitation but also align Taiwan with international digital trade norms, providing a more seamless experience for both businesses and consumers.
Safeguarding Consumers through Alcohol Traceability and Safety
The issue of "gray market" or parallel imports of alcoholic beverages remains a priority for the Committee. Specifically, the removal or alteration of original manufacturing lot codes by some importers poses a significant risk to consumer safety. Article 32 of the Tobacco and Alcohol Administration Act (TAAA) requires lot codes for traceability, yet some products are sold with these codes replaced by non-traceable serial numbers.
The Committee notes that major markets including the EU, UK, and Canada mandate original lot codes to ensure that products can be accurately recalled in the event of safety concerns. The proposal asks the Ministry of Finance to enforce stricter inspections and prohibit the sale of products with tampered codes. They emphasize that this is not a restriction on free trade, as parallel importers are still free to operate as long as they maintain the original, legally required traceability markers.
Unlocking New Markets: Online Sales and Age-Verification Technology
Perhaps the most forward-looking suggestion involves the modernization of Article 30 of the TAAA, which currently prohibits the online sale and delivery of alcohol and tobacco. The Committee argues that this restriction was designed for an "analog era" where age could not be effectively verified remotely.
With the establishment of MODA and the development of a robust digital identity infrastructure, the Committee asserts that multi-step digital verification—combining document authentication with in-person confirmation at the point of delivery—is now more reliable than traditional face-to-face checks by retail clerks. Referencing Japan’s successful licensing framework for online alcohol sales, the Committee urges the Taiwan government to:
- Amend the TAAA to allow online sales by licensed retailers using digital age verification.
- Establish clear standards for technology-based age verification.
- Foster collaboration between the government and the tech sector to ensure minor protection.
Removing Unnecessary Quarantine Barriers for Pet Food
Finally, the Committee addressed the importation of dry pet food, which is currently subject to restrictions related to Avian Influenza. The Committee points out that under international practices and World Organization for Animal Health (WOAH) standards, extruded dry pet food is considered a safe commodity regardless of the disease status of the exporting country.
The Ministry of Agriculture (MOA) has previously indicated a willingness to revise these regulations. The Committee is now urging the MOA to follow through on this commitment, removing what they describe as "unreasonable trade barriers" that do not align with global veterinary science.
Implications for Taiwan’s Economic Future
The Retail Committee’s recommendations reflect a broader desire for Taiwan to transition from a traditionally rigid regulatory environment to one that is agile, digital, and internationally aligned. Analysts suggest that implementing these reforms would not only satisfy the requirements of the ART but also position Taiwan favorably for future trade agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
By embracing AI in governance, modernizing food safety protocols, and enabling digital commerce for restricted goods, Taiwan can demonstrate its readiness to lead in the digital economy. The Committee concludes that these steps are essential for maintaining high levels of confidence in the Taiwan market, ultimately benefiting the retail industry and the millions of consumers it serves. The government’s response to these suggestions in the coming months will be a key indicator of its commitment to the "Digital Island" and "Healthy Taiwan" visions.
Ali Ikhwan
Iffa Jayyana
