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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.

More news on FTA 

 

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