The delegation met with 20 U.S. business representatives in Taiwan. The feeling among the business group was that, although Taiwan was experiencing widespread economic growth, the United States was deliberately being denied access to the growing Taiwanese market. Two factors were cited. First, it was difficult, if not impossible, to integrate U.S. components into finished Taiwanese products because of a bias to use Taiwanese components, even if they are more costly than U.S. equivalents. Second, the Taiwanese were more likely to turn to Japanese rather than U.S. firms for components. The U.S. business group also noted that there was a large volume of "indirect trade" with the People's Republic of China, which was undertaken through trading companies and transshipment of manufactured Taiwanese goods by way of Hong Kong.
The delegation had a lengthy session with the deputy director and the senior unit heads of the Department of Trade. The Hong Kong system of export control is an extension of the British system. Although Hong Kong has no direct links to CoCom, it adheres to all CoCom rules. Hong Kong's import/export laws are clear, and the regulations applying to strategic commodities are quite simple. The Hong Kong Control Schedule is actually a published transposition of the CoCom embargo list.
An import or export license for trade with a nonproscribed destination can be obtained from the Hong Kong Department of Trade within three working days. Licenses for any destinations that have been proscribed by the United Kingdom take longer. In these specific cases, the U.K. Department of Trade and Industry (DTI) will issue a license only on the basis of an existing CoCom license. These cases must be referred to DTI in London.
The Department of Trade maintains a "watch list" of companies that are suspected of engaging in illegal exports. However, license requests are considered on a case-by-case basis. If a company or firm is placed on the Hong Kong watch list, it does not mean that its license applications are automatically denied, only that they are subject to greater scrutiny. Even if convicted of an illegal export, a firm does not lose its privileges to export in the future. In a recent change to Hong Kong's licensing system, either an original or a "true copy of the original license" is required for the reexport of a good. In this way, an inspector in Hong Kong can verify that a license is genuine.
The number of licenses being processed every year is said to be causing strains on the system. In 1988, 160,000 import and 290,000 export licenses