Nila Kartika Wati
The Retail Committee has formally expressed its appreciation for the Taiwan government’s ongoing initiatives to bolster public health and stimulate economic growth, while simultaneously issuing a comprehensive set of recommendations aimed at refining the nation’s business climate. Building on the significant momentum generated by the Agreement on Reciprocal Trade (ART) between the United States and Taiwan, the Committee is urging the administration to prioritize more efficient governance, improved regulatory transparency, and a more robust approach to digitalization. These proposals, the Committee asserts, are designed to benefit both the retail industry and the general consumer base, ultimately fostering high levels of confidence in the Taiwan market as a stable and progressive destination for international investment.
Strengthening the U.S.-Taiwan Trade Framework
The cornerstone of the Committee’s recent advocacy involves the fulfillment of trade-related commitments established under the Agreement on Reciprocal Trade. Central to this is the dietary supplement industry, which is viewed as a vital component of President Lai Ching-te’s "Healthy Taiwan" and "888 Health Program" initiatives. These programs aim to improve the long-term health outcomes of the Taiwanese population through better nutrition and preventative care.
A major milestone in this bilateral relationship was reached in February, under the leadership of Vice Premier Cheng Li-chiun, when the U.S.-Taiwan ART concluded with an agreement to reduce tariff rates on dietary supplements to 10%. While this agreement represents a victory for consumer affordability, the Retail Committee notes that implementation remains a challenge. To ensure these benefits reach the market, the Committee has urged the government to establish a clearly defined dietary supplement category that aligns with the World Customs Organization’s (WCO) Harmonized System. This alignment is necessary for the Taiwan Customs Administration to process imports efficiently and apply the reduced tariffs without administrative delay.
Balancing Food Safety and Trade Diversity
The Committee has also raised concerns regarding the balance between food safety, sustainability, and the diversity of imported food products. A primary point of contention is the management of Maximum Residue Limits (MRLs) for pesticides. Under current practices, if an MRL has not been specifically set for a pesticide on a particular crop, Taiwan’s "positive list" system defaults to a non-detective standard. This often leads to unnecessary trade interruptions and food waste.
A specific example cited by the Committee is the herbicide glyphosate. While Taiwan announced MRL standards for glyphosate in 2019, these were later removed for certain applications. The resulting "non-detective" requirement effectively restricts the import of various U.S.-produced crops. The Committee recommends that the Taiwan Food and Drug Administration (TFDA) implement Article 19 of the Act Governing Food Safety and Sanitation more rigorously, assigning temporary MRL standards based on risk assessments or by referencing countries with similar diets, such as Japan. Re-introducing these standards would eliminate technical barriers to trade and ensure that Taiwanese consumers continue to have access to a diverse range of high-quality food products.
Leveraging Artificial Intelligence in Border Inspections
In an era of rapid technological advancement, the Retail Committee is calling for the integration of Artificial Intelligence (AI) to streamline border inspection procedures. Currently, food importers frequently face delays due to minor variations in manufacturing facility names. For instance, inconsistencies between "Company" and "Co.," or "Limited" and "Ltd.," can trigger flags during inspections, requiring explanations that can take a week or more to resolve.
The Committee proposes that the TFDA utilize Large Language Models (LLMs) to enhance the recognition of company names and common variations across different languages. By automating this recognition process, the government can significantly reduce the administrative burden on both inspectors and importers. Additionally, the Committee suggests that for companies operating multiple factories within the same country, the TFDA should allow the use of the parent company name for identification rather than requiring specific production premises for every individual application form.
Modernizing the Management of Naturally Occurring Substances
Another area requiring regulatory refinement is the handling of naturally occurring substances in food products, such as benzoic and salicylic acid. These substances are often part of a plant’s natural defense mechanism rather than additives. The Committee recommends transitioning from a literature-only background value check to a multi-evidence, science-based approach. This would involve combining literature values with manufacturing data and laboratory testing to ensure that safe, natural products are not unfairly penalized during border inspections. Harmonizing these review standards with international norms is seen as a critical step in eliminating non-tariff trade barriers.
Advancing Regulatory Transparency for Chinese Herbal Ingredients
The traditional Chinese medicine (TCM) and therapeutic food sectors in Taiwan are currently facing administrative bottlenecks. Despite the integration of the Customs-Port-Trade (CPT) Single Window, redundant batch-by-batch notifications continue to create duplication of effort. The Committee suggests streamlining these clearance processes and updating the "medicine-food homology" list.
Regulatory progress in this area has stalled due to divergent opinions, which the Committee warns is causing Taiwan’s therapeutic food sector to lag behind regional competitors. By aligning the regulatory framework for TCM with global scientific trends and clarifying the usage limits for nutritional additives, Taiwan can better safeguard consumer interests while fostering innovation in the functional food market.
Accelerating Digital Governance and Electronic Signatures
The Ministry of Digital Affairs (MODA) has been active in promoting electronic signatures to enhance the security and efficiency of online procedures. However, the Retail Committee points out that many customs-related processes still rely heavily on paper documents. Even existing online procedures are often described as burdensome due to the requirement for the Citizen Digital Certificate, which increases processing time for businesses.
The Committee encourages the government to prioritize the digitalization of key processes, such as long-term customs-clearance authorizations and self-use declarations for high-dosage dietary supplements. Implementing a consistent, cross-agency application of electronic signatures would not only facilitate trade but also improve the overall digital experience for consumers and retail entities alike.
Ensuring Traceability in the Alcohol Market
Consumer safety remains a top priority for the Committee, particularly regarding the sale of imported alcoholic beverages. Under Article 32 of the Tobacco and Alcohol Administration Act (TAAA), packaged alcoholic products must bear a lot code to ensure traceability. However, some parallel importers have been removing these original codes and replacing them with serial numbers that lack the necessary information for a recall.
The Committee is calling on the Ministry of Finance to conduct systematic inspections and strictly enforce the prohibition on selling products with altered or removed lot codes. This move is consistent with international practices in the UK, France, and the EU, and does not contradict the principles of free trade, as parallel importers remain free to import products as long as they maintain the original manufacturing codes.
Enhancing the Review Process for Novel Ingredients
The review process for "novel ingredients"—new food components not previously consumed in Taiwan—is currently viewed as lengthy and lacking transparency. Companies often face unpredictable risks and delays because there are no established timelines for data assessment or advisory committee reviews. The Retail Committee recommends that the TFDA establish clear procedural timelines and create a mechanism for applicants to provide timely clarifications during the evaluation process. Improving this predictability will support food technology innovation and make Taiwan a more attractive market for cutting-edge food products.
Unlocking Online Markets with Age-Verification Technology
As Taiwan aligns itself with global AI trends, the Committee argues that laws designed for the "analog era" must be updated. A primary example is the restriction on the online sale and delivery of alcohol and tobacco. These restrictions were originally implemented because age could not be effectively verified remotely.
However, with the establishment of MODA and the development of secure digital identity infrastructure, the Committee believes that technical feasibility is no longer the issue. Modern age-verification technology, including document authentication and in-person confirmation at the point of delivery, can exceed the safeguards provided by traditional retail environments. The Committee urges the government to launch pilot programs for online alcohol sales, leveraging these digital tools to protect minors while supporting the growth of the e-commerce sector.
Removing Redundant Quarantine Requirements for Pet Food
Finally, the Committee is addressing the importation of dry pet food. Currently, Taiwan’s veterinary authorities impose restrictions based on the risk of Avian Influenza, even though extruded dry pet food is internationally recognized as a safe commodity. As a member of the World Organization for Animal Health (WOAH), Taiwan is encouraged to avoid unreasonable trade barriers. The Committee recommends that the Ministry of Agriculture follow through on previous commitments to revise these regulations and remove unnecessary quarantine requirements for dog and cat food.
Conclusion and Strategic Outlook
The Retail Committee’s extensive list of recommendations underscores a pivotal moment for Taiwan’s economy. As the nation seeks to deepen its trade relationship with the United States and other global partners, the transition toward a more transparent, digital-first regulatory environment is essential. By addressing these technical and administrative barriers, Taiwan can ensure its regulatory framework keeps pace with technological innovation, ultimately benefiting the economy, the retail industry, and the health and safety of its citizens. The Committee remains committed to working alongside the government to transform these proposals into actionable policies that will define the future of the Taiwan market.
Pevita Pearce
Reynand Wu
