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Promote
Bilateral Partnership, Build the US-Taiwan FTA
The tide of Globalization is
rising high with the trend of bi-lateral free trade agreements
and free trade zones/ areas flourishing around the globe. Taiwan
is no exception. Taiwan has signed its first free trade
agreement with its long-time diplomatic ally, Panama and is
actively pursuing opportunities to establish free trade
agreements with other nations. The close partnership between
Taiwan and the U.S. is built upon the solid foundation of mutual
respect for free market economy and democracy. That makes Taiwan
an ideal partner for U.S. to sign a free trade agreement with.
Recently, the United States has
begun free trade agreement negotiations with several Asian
countries, such as South Korea, Malaysia… and etc. Taiwan is the
eighth trading partner of the United States, ranking between
South Korea and Malaysia. In addition, Taiwan’s democracy shine
brightly in the region and received high praise by President
Bush in Kyoto last November.
A US-Taiwan FTA has economic and political
advantages. The FTA will bring tremendous opportunities and
commercial interests to American companies. Since China attempts
to isolate Taiwan by forming ASEAN plus three, an FTA between
Taiwan and the United States will help Taiwan break its
international economic isolation. After all, Taiwan is an island
nation surrounded by the ocean. Taiwan’s livelihood depends on
the extensive and free exchange of trade and goods with other
countries. Any pressure from China on the international
economic front will seriously compromise Taiwan’s national
survival which depends largely on its vibrant economy.
Additionally, once an FTA with the United States is concluded,
we believe Beijing will be less likely to assume that it could
take military action against the island without involving the
United States. The United States and the international community
should foresee this problem and preempt it by launching the
negotiations on a US-Taiwan FTA.
Why U.S.-Taiwan Free
Trade Agreement?
The
US has concluded a FTA with a number of countries, including
Australia, Jordan, Morocco, Panama, Singapore and Central
American countries. FTA’s with Malaysia and South Korea are
presently in the works.
There
are a number of substantive arguments to move forward with a FTA
with Taiwan at this time:
1. Commercial appeal: Taiwan is America’s 8th
largest trading partner, creating some US$60 billion in two-way
trade per year. Studies by the US International Trade
Commission show that US exports to Taiwan would grow at a rate
of approximately 16% per year if a FTA were concluded.
2. High value American jobs: Taiwan’s IT and computer
sector plays a crucial role in the development and production
chain of major American companies such as Dell, Hewlett-Packard,
and Agilent. Taiwan also has an active R&D effort in new areas
such as nanotechnology and biotechnology: Partnering with
Taiwan companies would strengthen US R&D in those areas.
3. New opportunities for a diverse array of American
industries: A comprehensive FTA with Taiwan would create new
opportunities in a cross section of American economic sectors
from agriculture, biotechnology to financial services and
energy.
4. Gateway to Asia: Taiwan is a gateway to Asia. It
is strategically located in the Eastern Pacific, straddling the
sea lanes between Japan/Korea and Southeast Asia. It has the
world’s third-largest foreign exchange reserves, and is the
world third-largest exporter of information technology-related
products.
5. Foreign Competition: Because of its high-tech
capabilities, Taiwan is being aggressively courted by economic
competitors like India, Japan and the EU. An FTA would give US
companies an edge over the competition.
6. Strengthening ties to a democratic partner:
During the past two decades, Taiwan has made a remarkable
transition towards democracy. An FTA would strengthen the ties
with a major democratic ally, and enhance stability and peace in
the region. It would also help Taiwan break out of its
isolation in the regional trade integration which China tries to
impose on the island (ASEAN plus 3).
7. Major support from the American Business community:
The FTA is supported by major trade organizations such as the
US-Taiwan Business Council and the American Chamber of Commerce
in Taipei.
8. Major progress on Intellectual Property Rights:
During the past six years, the democratic DPP government has
made major progress on crucial issues such as Intellectual
Property Rights. Any remaining issues can be worked out during
the negotiation process.
9. Bipartisan support in the US Congress: From both
the Democratic side as well as the Republic side, Congressional
leaders are supporting an FTA with Taiwan, and have expressed
willingness to co-sponsor a Resolution.
Further procedure:
June
2007 is the deadline to qualify for "Fast Track" treatment. That
means that before June 2007, the FTA needs to be on the priority
agenda of the President. The formal negotiation process needs to
be started by April 2007. The Congressional resolutions in the
House and Senate are geared to get this issue on the political
agenda of the Bush Administration.
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