Raul Delapena Setiawan
The Retail Committee has formally expressed its appreciation for the Taiwan government’s persistent efforts to advance public health and stimulate economic development, while simultaneously issuing a comprehensive set of recommendations aimed at refining the nation’s business climate. Following the momentum generated by the Agreement on Reciprocal Trade (ART) between the United States and Taiwan, the Committee is urging the administration to prioritize efficient governance, regulatory transparency, and a robust leap toward digitalization. These proposals, the Committee asserts, are essential for fostering a market environment that benefits both the retail industry and the general consumer base, ultimately securing higher levels of international investor confidence in the Taiwan market.
The backdrop of these recommendations is the deepening economic partnership between Taipei and Washington. As Taiwan seeks to solidify its position in global supply chains and diversify its trade portfolio, the Retail Committee emphasizes that the successful implementation of trade-related commitments is paramount. The Committee’s stance is that by aligning domestic regulations with international standards and leveraging emerging technologies like Artificial Intelligence (AI), Taiwan can eliminate non-tariff barriers that currently hinder the flow of goods and services.
Fulfilling Commitments Under the Agreement on Reciprocal Trade
A primary focus of the Committee’s advocacy involves the specific commitments made under the U.S.-Taiwan ART. Central to this is the dietary supplement industry, which is viewed as a cornerstone of President Lai Ching-te’s "Healthy Taiwan" and "888 Health Program" initiatives. These government programs aim to improve the long-term health outcomes of the Taiwanese population, and the Committee argues that affordable access to high-quality supplements is vital to achieving these goals.
The Committee highlighted the success of Vice Premier Cheng Li-chiun in concluding the ART negotiations in February, which established a path toward reducing tariff rates on dietary supplements to 10%. This reduction is expected to provide direct financial relief to consumers and encourage market growth. However, a significant technical hurdle remains: the lack of a clearly defined dietary supplement category within Taiwan’s customs framework. The Committee urges the government to establish a regulatory definition aligned with the World Customs Organization’s Harmonized System (HS). Without a clear timeline and specific HS code alignment, the Customs Administration may struggle to implement the promised tariff reductions efficiently, potentially delaying the benefits intended for the public.
Balancing Food Safety and Trade Diversity
Beyond tariffs, the Committee is calling for a more nuanced approach to food safety and sustainability. A recurring point of contention in U.S.-Taiwan trade involves Maximum Residue Limits (MRLs) for pesticides. The Committee recommends that the Taiwan Food and Drug Administration (TFDA) rigorously implement Article 19 of the Act Governing Food Safety and Sanitation. Specifically, when an MRL has not yet been established for a particular pesticide on a known crop in Taiwan, the Committee suggests assigning a temporary MRL based on rigorous risk assessments and the standards of regions with similar diets, such as Japan.
The case of glyphosate, a widely used herbicide, serves as a primary example of current trade friction. While Taiwan announced MRL standards for glyphosate in 2019, they were subsequently removed for certain applications. In the absence of an established MRL, Taiwan’s "positive list" system defaults to a non-detective standard. The Committee argues that this effectively functions as a ban on certain U.S.-produced crops, restricting food diversity and creating technical barriers to trade. The Committee urges the TFDA to conduct a fresh risk assessment of glyphosate with the intent of re-introducing appropriate MRLs, thereby aligning Taiwan’s standards with scientific international norms.
Enhancing Efficiency Through AI and Digital Governance
In an era of rapid technological advancement, the Retail Committee believes that the Taiwan government must integrate digital tools to streamline administrative processes. One significant bottleneck occurs during border inspections for food imports. Currently, importers must provide the exact name of the manufacturing facility, but minor variations—such as "Co." versus "Company" or "Ltd." versus "Limited"—often trigger red flags for inspectors. These clerical discrepancies can lead to delays of a week or more as importers are forced to provide formal clarifications.
To resolve this, the Committee proposes that the TFDA utilize Large Language Models (LLMs) and AI-driven recognition software to identify and verify company names despite common linguistic or stylistic variations. Furthermore, the Committee suggests a shift in how manufacturers are identified on application forms. For companies operating multiple factories within the same country, the Committee recommends allowing the use of the corporate name as the primary identifier rather than requiring specific production premises for every entry, which would significantly reduce the administrative burden on large-scale importers.
The push for digitalization extends to the Ministry of Digital Affairs (MODA). While MODA has been active in promoting electronic signatures, the Committee notes that many customs-related processes remain tethered to paper documentation. The current reliance on the Citizen Digital Certificate for online procedures is described as burdensome and time-consuming. The Committee encourages a cross-agency adoption of electronic signatures for key processes, including long-term customs-clearance authorizations and self-use declarations for high-dosage supplements.
Addressing Regulatory Stagnation in Traditional Chinese Medicine
The Committee also turned its attention to the Traditional Chinese Medicine (TCM) sector and the "medicine-food homology" list. Despite the integration of the Customs-Port-Trade (CPT) Single Window, the Department of Chinese Medicine and Pharmacy (DCMP) still requires redundant batch-by-batch notifications. This duplication of effort is seen as a major inefficiency. The Committee recommends streamlining these clearance processes to allow for more agile trade in herbal ingredients.
Furthermore, the Committee expressed concern that Taiwan’s therapeutic food sector is lagging behind regional competitors due to stalled regulatory progress. The lack of consensus on updating the medicine-food homology list has prevented the introduction of innovative products that blend traditional ingredients with modern nutritional science. The Committee calls for a regulatory framework that aligns with global scientific trends to ensure Taiwan remains competitive in the high-growth wellness market.
Safeguarding Consumers: Alcohol Traceability and Novel Ingredients
Consumer safety remains a top priority, particularly regarding the sale of imported alcoholic beverages. The Committee has raised concerns about parallel importers who remove or alter original manufacturing lot codes. Under Article 32 of the Tobacco and Alcohol Administration Act (TAAA), packaged alcoholic products must bear a lot code to ensure traceability in the event of a recall. The removal of these codes by third-party importers compromises the ability to track products to specific production lines and times.
The Committee notes that jurisdictions such as the United Kingdom, France, Italy, and the European Union mandate the preservation of these codes. They argue that prohibiting the removal of original lot codes does not infringe upon the principles of free trade, as parallel importers can still operate as long as they maintain the original labeling. The Committee is asking the Ministry of Finance to enforce stricter inspections and establish a robust reporting mechanism to replace the current voluntary system.
Similarly, the Committee is calling for greater transparency in the review process for "novel ingredients"—new food components that do not have a history of safe use in Taiwan. Currently, the evaluation process is described as lengthy and opaque, with no specific timelines for data assessment or advisory committee reviews. This unpredictability discourages investment in food technology innovation. The Committee recommends that the TFDA establish clear procedural timelines and allow applicants to provide timely clarifications during the evaluation phase.
Modernizing Age Verification for Online Markets
As the digital economy grows, the Retail Committee suggests that Taiwan must update its "analog-era" restrictions on the online sale and delivery of alcohol and tobacco. Currently, Article 30 of the TAAA prohibits these sales due to concerns over age verification. However, the Committee points out that since the establishment of MODA in 2022, Taiwan has the infrastructure for secure, auditable remote identity verification.
The Committee argues that digital innovation and minor protection are not mutually exclusive. Using international examples, such as Japan’s licensing framework for online alcohol sales, the Committee demonstrates how multi-step digital verification—combined with in-person checks at the point of delivery—can be more effective than the subjective judgment of a retail clerk. They urge the government to leverage Taiwan’s digital identity infrastructure to unlock these restricted products in the online marketplace responsibly.
Resolving Pet Food Quarantine Discrepancies
Finally, the Committee addressed the importation of dry pet food. Currently, Taiwan’s veterinary authorities impose restrictions on certain extruded dry pet foods due to concerns over Avian Influenza. However, international standards from the World Organization for Animal Health (WOAH) suggest that these products, which undergo high-heat extrusion, are safe commodities regardless of the disease status of the exporting country. The Committee recommends that the Ministry of Agriculture (MOA) fulfill its commitment to revise these regulations, removing unnecessary quarantine requirements that function as unreasonable trade barriers.
Implications for the Future of Taiwan’s Market
The Retail Committee’s comprehensive list of suggestions underscores a pivotal moment for Taiwan’s regulatory landscape. By addressing these technical and administrative hurdles, the government has the opportunity to significantly enhance the efficiency of its markets. The implications of these changes extend beyond the retail sector; they signal to the global community that Taiwan is committed to being a transparent, high-tech, and rule-based trading partner.
As the U.S.-Taiwan economic relationship continues to evolve through the ART and other frameworks, the implementation of these recommendations could serve as a blueprint for future trade agreements. For the consumer, these reforms promise greater variety, lower costs, and enhanced safety. For the industry, they offer the predictability and digital efficiency necessary to thrive in an increasingly competitive global economy. The Retail Committee remains optimistic that through continued dialogue and the adoption of modern governance tools, Taiwan can achieve its vision of a healthy, prosperous, and digitally advanced society.
Pevita Pearce
