Statement by Principal Deputy Press Secretary Speakes on the Taiwan-United States Trade Agreement

December 8, 1986

As a result of intensive negotiations in the wake of President Reagan's October 27, 1986, decision to retaliate against Taiwan for unfair trade practices under section 301 of the Trade Act of 1974, the President today announced that the United States and Taiwan have come to terms on implementing the agreement on the importation and sale of U.S. beer, wine, and cigarettes in Taiwan. This agreement will provide significant market access in Taiwan for these U.S. commodities and should mean close to $150 million in sales in the first year for the beer, wine, and cigarette industries of the United States.

This market opening agreement provides for smooth importing procedures by permitting U.S. exporters of beer, wine, and cigarettes to make a single payment of a monopoly tax in lieu of import duties and other taxes. Moreover, the tax will be low enough to allow U.S. products to be very price competitive. The agreement allows for a wide range of U.S. promotional and advertising activities and guarantees direct access by American producers to all of Taiwan's 70,000 retail outlets. It also provides broader product co]%erage for wine to include coolers and champagne.

For too many years U.S. beer, wine, and cigarette exporters faced significant barriers in the Taiwanese market, including a ban on the importation of U.S. beer; an extremely high, mandatory price differential between the retail price of domestic and imported products; and restrictions on imported products being sold at all retail outlets where competing domestic products are sold. This settlement with Taiwan successfully addresses these serious trade complaints raised by this administration and will accomplish the President's goal of obtaining access for U.S. firms to Taiwan's $1 billion annual retail beer, wine, and cigarette market. The President has directed the United States Trade Representative to take all necessary actions to implement and monitor this agreement. The section 301 proceeding will therefore be terminated.