TAIWAN TIFA FOLLOW UP - AGRICULTURE

UNCLAS AIT TAIPEI 003016

SIPDIS


FAS FOR ITP/AAD/SHEIKH, MIRELES AND SMITHUS

STATE FOR EAP/RSP/TC AND EB/TPP/ABT
STATE PASS AIT/W
STATE PASS USTR FOR ERIC ALTBACH, TIM WINELAND




DOC FOR 4431/ITA/MAC/AP/OPB/TAIWAN/JDUTTON

SIPDIS

E.O. 12958: N/A
TAGS: EAGR ETRD TW

SUBJECT: TAIWAN TIFA FOLLOW UP - AGRICULTURE



1. Summary. Official reaction to both the discovery of trace levels
of biotech rice in the U.S. and our response to Taiwan's audit of
U.S. beef packing plants has been as good as could have been
expected. In TIFA follow-up talks, however, the Council of
Agriculture (COA) sought to downgrade the proposed Consultative
Committee (CCA) by deleting "policy recommendations" and "market
access" issues from the scope of the CCA. Negotiations over WTO
notification procedures to establish a country specific rice quota
made some progress, but the issue is still unresolved. End Summary.

Biotech Rice -


2. Reaction to the discovery of trace amounts of the Liberty Link
601 Rice event in long grain rice in the southern United States has
been limited. Local industry and government sources confirm that
Taiwan has only imported short grain rice from the U.S. in the past.
On August 21, 2006, Taiwan imposed a temporary suspension on long
grain rice imports from the U.S. Department of Health officials
informed us they were under pressure from above to follow the ban
put in place by Japan. They pointed out that Taiwan's temporary
suspension is less severe than the Japanese ban. Press coverage has
been limited and factual. The Taiwan Department of Health has been
very flexible on documentation requirements to establish that future
rice shipments from the U.S. are not long grain varieties. The
requirements will also be based on the loading date. While
officials at the Council of Agriculture voiced concerns over the
possibility that long grain rice might be present in processed rice
products, officials at the Department of Health did not raise the
issue.

Rice CSQ notification procedure -


3. Negotiations on a procedure to notify the WTO of a Country
Specific Quota (CSQ) for Taiwan's public sector rice imports were
advanced in discussions between USTR's Director of China and Taiwan
Affairs Tim Wineland and Chinese Taipei's Ag Consular to the WTO
Susan Chang on August 21, 2006. While most substantive issues
involving the establishment of a CSQ and several other head-note
changes to Taiwan's rice schedule have been resolved for several
months, Chinese Taipei has not notified the WTO of the CSQ due to
procedural differences between Chinese Taipei and the U.S.,
Australia, and Thailand. A possible agreement on notification
procedures that would protect U.S. interests was discussed at the
meeting and will be reviewed by USTR legal staff. Taiwan's key
interest appears to be having the objections to the tariff schedule
portion of its old rice schedule lifted so that other parties do not
have the opportunity to object to its high out-of-quota rice tariff
rate.

Consultative Committee on Agriculture-


4. The Council of Agriculture (COA) in their reply to the U.S. draft
MOU and Terms of Reference for the TIFA Consultative Committee on
Agriculture sought to significantly narrow the scope of the
Committee. Their counterproposal deleted language that stipulated
that the CCA had the authority to make policy recommendations and to
discuss market access issues. The US delegation led by Deputy
Assistant USTR Eric Altbach raised our objections with a COA
delegation headed by Wen-Deh Chen, Director General of the
Department of International Affairs at COA. He pointed out that
discussing market access issues and policy recommendations was the
main point of establishing the CCA and that without that broad
mandate, it was difficult to envision high-level U.S. interest in
the CCA.


5. USDA will respond formally to COA's proposed text, and the
Minister of COA has instructed his staff to agree to CCA documents
by the end of October. Other Taiwan ministries are more
enthusiastic about this proposal.

Delivery of U.S. Response to Taiwan's Beef Audit Report -


6. Taiwan Department of Health (DOH) officials generally reacted
positively to the U.S. response to their audit report. Pending
review by a formal committee of scientific experts, DOH Officials
initially accepted USDA's responses to the principle issues raised
in the audit report - the segregation of Canadian cattle and the
used of dedicated saws. The DOH said that they will provide our
office with a formal response in the coming weeks.


7. Based on a DOH visit to the US last April, Taiwan objected to the
slaughter of Canadian cattle in the U.S. for export to Taiwan and
insisted that dedicated saws be used for animals above and below the
age of 30 months that were going to be exported to Taiwan. The U.S.
industry has agreed to segregate Canadian cattle so that they are
not immediately slaughtered and shipped to Taiwan. This will no
longer be necessary once Taiwan reopens its market to Canadian beef,
a process that will probably be delayed by the recent discovery of
Canada's eighth BSE case. After some objections, the officials
accepted our reasoning for allowing sanitation to be used in place
of dedicated saws.

YOUNG