A senior American official has warned that US businesses might begin to pull out of Taiwan if it does not forcefully tackle such trade issues as rampant piracy of electronic intellectual property.
"I think Taiwan is positioning itself for some difficult times if they don't deal with these trade issues," said Deputy Secretary of State for East Asia and the Pacific Randall Shriver.
"The American business community and the business community in Taiwan can speak for themselves, but our sense is that people are reassessing some of their long term plans based on the environment in Taiwan," Shriver said at a special briefing for Taiwan's Washington press corps.
His remarks were part of a wide-ranging discussion that also dealt with the SARS epidemic and Taiwan's bid to participate in next week's World Health Assembly meeting, arms sales and overall US-Taiwan-China relations.
Shriver called Taiwan's piracy situation "very serious" for both sides.
"Taiwan has as much an interest in having a way to protect intellectual property rights as we have an interest," Shriver said.
It's a very difficult challenge because it involves not only the Executive Yuan, but it also involves law enforcement and the judicial branch," he said.
New anti-piracy legislation that is being considered by the Legislative Yuan "will probably help a step, but it's going to require a very dedicated effort," beyond legislation to succeed in the fight against piracy, he said.
Shriver indicated that despite the sharp US-Taiwan fight over piracy and other trade issues, overall bilateral relations are improving.
Making oblique references to the dispute over the Iraq invasion that Washington has engaged in with such staunch allies as Germany and France, Shriver noted that disputes are "quite normal, even with our closest friends and allies."
"So to suggest that there are problems is not to suggest that the relationship is in any type of downward trend. I think it's the opposite. Taiwan's support in Iraq and its support in anti-terrorism has been noted and greatly appreciated," he said.
Taiwan was placed on the US Trade Representative's "Priority Watch List" over piracy for the third year in a row, after Washington said it found no real improvement in the situation despite a number of new anti-piracy laws.
The problem, the representative found, was mainly in enforcement and court proceedings.
In addition to intellectual property rights, which is the worst source of US-Taiwan trade frictions, the US has also complained about Taiwan's performance in agriculture trade, including rice, pharmaceuticals, telecommunications and other areas.
Unless Taiwan can solve those problems, US trade officials warn, Washington will not consider entering into negotiations for a free trade agreement, which Taipei is pursuing.