Subsidies under United States Countervailing Duty Law: The Case of Taiwan

Stoltenberg, Clyde D. | January 1, 1988

The rapid industrialization of the Republic of China on the island of Taiwan during the past thirty years has been accompanied by the entry of goods “made in Taiwan” into markets around the world. Indeed, foreign trade has become the backbone of Taiwan’s economy and the impetus for its economic growth. Between 1976 and 1984, for example, year-to-year growth rates of imports ranged from 7.4% to 34.0%, while export growth ranged from 14.1% to 53.8%. In its ninth medium-term economic plan, the Council of Economic Planning and Development (“CEPD”) calls for Taiwan’s economy to grow by an annual average of 6.5% and exports of merchandise to increase by 8.2% annually from 1986 to 1989. The four-year plan projects merchandise exports of $ 40.3 billion and imports of $ 30.4 billion by 1989. This Article analyzes Taiwan’s government policies affecting production for export and their treatment under United States countervailing duty law. After describing the evolution of Taiwan’s trade policy and the present formulation of Taiwan’s law and regulation affecting production for export, the Article sets forth the applicable provisions of United States countervailing duty law. Discussion then focuses upon recent countervailing duty proceedings involving Taiwanese products, and concludes with the observation that the Taiwanese government subsidizes its exports minimally, if at all. This observation will refute the recurring argument that Taiwanese export subsidies have contributed to the United States-Taiwan trade deficit.