Memorandum on Determination Under Section 301 of the Trade Act of 1974

Memorandum for the United States Trade Representative

Under Section 301 of the Trade Act of 1974, as amended (19 U.S.C. 2411), I have determined that acts, policies, and practices by the authorities on Taiwan regarding the distribution and sale of U.S. beer, wine, and tobacco products are unjustifiable, unreasonable, or discriminatory and burden or restrict United States commerce. Under Section 301 of the Trade Act, I have decided to take proportional countermeasures against Taiwan so long as it continues these practices. I direct you as the Trade Representative to propose appropriate and feasible actions.

Reasons for Determination

In October 1985, the authorities on Taiwan agreed to provide greater access to their beer, wine, and tobacco products market for U.S. exports within six to twelve months. Specifically they agreed to: (1) lift the import ban on beer, (2) allow U.S. products to be sold at all retail outlets where Taiwanese products were sold, (3) permit the retail prices of imports to be marked up at no greater rate than the prices for domestic products, and (4) allow market forces to determine the importation of these products.

A year has passed and Taiwan has not honored its agreement. For example, it still bans the importation of beer, allows the retail price of beer, wine, and tobacco imports to be marked up at a higher rate than the retail price of domestic products (thereby increasing the price differential between domestic and imported products), and does not allow imported products to be sold at all the retail outlets where competing domestic products are sold.

These practices are unjustifiable, unreasonable, or discriminatory and burden or restrict United States commerce because they reduce our exports to Taiwan of beer, wine, and tobacco in favor of domestic products. Proportional countermeasures should be specifically proposed by you as Trade Representative in order to obtain the elimination of such practices.

This determination shall be published in the Federal Register.

RONALD REAGAN

THE WHITE HOUSE,

Washington, October 27, 1986.