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The Retail Committee has formally called upon the Taiwan government to accelerate the improvement of the national business climate through enhanced governance efficiency, regulatory transparency, and a comprehensive shift toward digitalization. This appeal comes as Taiwan seeks to capitalize on the momentum generated by the Agreement on Reciprocal Trade (ART) between the United States and Taiwan, a landmark framework intended to deepen economic integration. By refining regulatory definitions and adopting modern technological tools, the Committee argues that Taiwan can significantly boost consumer confidence while solidifying its position as a reliable and sophisticated partner in the global retail market.
Strengthening the US-Taiwan Trade Foundation
The conclusion of the initial phases of the U.S.-Taiwan Initiative on 21st-Century Trade has set a high bar for bilateral cooperation. Central to this progress is the Agreement on Reciprocal Trade (ART), which recently saw Vice Premier Cheng Li-chiun successfully negotiate a reduction in tariff rates for dietary supplements to 10%. This move is seen as a major win for consumers and a vital component of President Lai Ching-te’s "Healthy Taiwan" and "888 Health Program" initiatives.
However, the Retail Committee notes that the practical implementation of these tariff reductions remains stalled due to a lack of clear regulatory definitions. Currently, the absence of a specific dietary supplement category that aligns with the World Customs Organization’s (WCO) Harmonized System (HS) prevents the Customs Administration from applying the reduced rates efficiently. The Committee is urging the government to establish a definitive timeline for these regulatory updates, ensuring that the promised benefits of the ART reach the market without further administrative delay.
Science-Based Food Safety and the Glyphosate Controversy
A primary concern for the Committee is the balance between food safety, sustainability, and the diversity of the Taiwanese food market. A point of contention remains the Maximum Residue Limit (MRL) for glyphosate, a widely used herbicide. In 2019, Taiwan established MRL standards for glyphosate but subsequently retracted them for certain applications. Under Taiwan’s "positive list" system, the absence of an established MRL functions as a de facto zero-tolerance or "non-detective" standard.
Industry experts argue that this rigid stance creates significant technical barriers to trade, particularly for U.S.-produced crops where glyphosate is a standard agricultural tool. The Committee recommends that the Taiwan Food and Drug Administration (TFDA) invoke Article 19 of the Act Governing Food Safety and Sanitation to implement temporary MRLs based on risk assessments from regions with similar dietary habits, such as Japan. Re-introducing a science-based MRL for glyphosate would prevent unnecessary trade interruptions and ensure that Taiwanese consumers continue to have access to a diverse range of imported food products.
Chronology of Regulatory and Trade Milestones
To understand the current urgency, it is essential to look at the timeline of Taiwan’s recent trade and regulatory evolution:
- 2019: Taiwan announces MRL standards for glyphosate, only to remove several specific applications shortly after, leading to trade friction with major grain exporters.
- August 2022: The Ministry of Digital Affairs (MODA) is established, signaling a national commitment to digital transformation and the promotion of electronic signatures.
- June 2023: The first agreement under the U.S.-Taiwan Initiative on 21st-Century Trade is signed, covering customs administration, trade facilitation, and anti-corruption.
- February 2024: Vice Premier Cheng Li-chiun concludes the ART negotiations, securing the 10% tariff cap on dietary supplements.
- May 2024: President Lai Ching-te takes office, emphasizing the "Healthy Taiwan" initiative as a cornerstone of his domestic policy.
Leveraging AI and Digital Governance in Border Inspections
One of the more innovative proposals from the Committee involves the integration of Artificial Intelligence (AI) to streamline border inspections. Currently, food importers often face delays of a week or more due to minor clerical inconsistencies in manufacturing facility names. Variations such as "Company" versus "Co." or "Limited" versus "Ltd." can trigger red flags for inspectors, requiring manual clarification and extensive documentation.
The Committee suggests that the TFDA utilize Large Language Models (LLMs) to recognize these common linguistic variations and trade usages automatically. Furthermore, the Committee proposes that when a single company operates multiple factories within the same country, the TFDA should allow the "manufacturer" to be identified by the corporate name rather than requiring specific production premises for every form, a move that would drastically reduce the administrative burden on both the state and private enterprises.
Modernizing the Alcohol and Tobacco Sector
The Committee’s report also addresses the "analog-era" constraints currently governing the sale of restricted products. Under Article 30 of the Tobacco and Alcohol Administration Act (TAAA), the online sale and delivery of alcohol and tobacco are heavily restricted due to concerns regarding age verification.
The Retail Committee argues that this prohibition is outdated. With the establishment of MODA and the development of a robust digital identity infrastructure, Taiwan now possesses the technology for secure, auditable remote verification. The Committee points to Japan’s successful model, where a multi-step digital verification process—including document authentication at the point of purchase and in-person confirmation upon delivery—has allowed for a thriving e-commerce sector that maintains high standards of minor protection.
In addition to sales channels, the Committee is pushing for stricter enforcement regarding the "lot codes" on alcoholic beverages. Currently, some parallel importers remove original manufacturing lot codes and replace them with serial numbers that lack traceability. This practice undermines consumer safety and complicates recall efforts. The Committee calls on the Ministry of Finance to align with international norms seen in the EU, UK, and Canada by prohibiting the sale of products with altered lot codes.
Harmonizing Traditional Medicine and Food Additives
The Traditional Chinese Medicine (TCM) industry in Taiwan is another area ripe for reform. Despite the integration of the Customs-Port-Trade (CPT) Single Window, importers still face redundant, batch-by-batch notifications that create administrative duplication. The Committee recommends streamlining these clearance processes and updating the "medicine-food homology" list—a list of ingredients that can be used as both food and medicine.
Currently, Taiwan’s therapeutic food sector is lagging behind regional competitors due to a stalled regulatory framework. Harmonizing the wording and usage limits for food additives and nutrient sources (such as zinc, selenium, and magnesium) is also essential. Discrepancies between the standards for "nutritional additives" and "food raw materials" often lead to confusion and unpredictable enforcement, which the Committee believes can be resolved through better alignment with international scientific trends.
Removing Barriers in the Pet Food Market
The pet food industry has also faced what the Committee describes as "unreasonable trade barriers." Despite international standards categorizing extruded dry pet food as a safe commodity, Taiwan’s veterinary authorities maintain strict quarantine requirements related to Avian Influenza (AI).
As a member of the World Organization for Animal Health (WOAH), Taiwan has committed to formulating quarantine regulations that avoid unnecessary trade interruptions. The Committee urges the Ministry of Agriculture (MOA) to follow through on previous commitments to remove AI-related restrictions on dog and cat dry food, regardless of the AI status of the exporting country, provided the products have undergone appropriate heat treatment during manufacturing.
Implications for Future Economic Growth
The Retail Committee’s proposals represent a roadmap for a more resilient and modern Taiwanese economy. By moving away from paper-based requirements—such as the current manual applications for organic product permits—and embracing electronic signatures across all agencies, Taiwan can significantly reduce the "hidden costs" of doing business.
The transparency and predictability of the review process for novel ingredients are also highlighted as critical factors for investment. Currently, the lack of specific timelines for safety evaluations and data assessments creates risks that discourage companies from introducing innovative food technologies to the Taiwan market.
If the government adopts these recommendations, the implications are far-reaching. Not only would it fulfill the spirit of the U.S.-Taiwan ART, but it would also position Taiwan as a leader in digital trade governance in the Asia-Pacific region. For the consumer, this means lower prices for health products, a wider variety of safe food options, and the convenience of a modern, digitally-enabled retail environment. For the industry, it means a stable, predictable, and transparent regulatory landscape that rewards innovation and efficiency.
Pevita Pearce
Evan Lee Salim
