US-Taiwan Free Trade Agreement

Tracking news and information about the proposed US-Taiwan Free Trade Agreement (FTA)

Friday, March 30, 2007



(March 30, CNA)
The Government announced Friday the establishment of the Office of Trade Negotiations as an agency specially tasked and committed to dealing with international trade talks, with current Deputy Representative to the United States John C.C. Deng set to formally assume office as its first chief in April. President Chen Shui-bian, in the opening ceremony, called the establishment of the office¡§proof of the government’s creative and progressive thinking, which has put together a professional team to build momentum for conducting the nation’s trade negotiations.

Deng said the launch is significant in that it demonstrates to the world Taiwan’s resolution to actively participate in international economic and trade affairs, its will to pursue the cause of liberalization and its sincere wish to improve cooperative relations with trade partners and friendly countries. The office, under the Ministry of Economic Affairs (MOEA), will draft an overall strategy in trade negotiations, ensure that government policies are in line with international norms, integrate the positions of various agencies, and carry out trade talks, the MOEA said in a news release. To serve those ends, the MOEA said, the office will be comprised of a Chief Negotiator with the rank and title of Ambassador, two Deputy Chief Negotiators, ten Senior Negotiators including three in charge of market opening issues and seven dedicated to specific topics, a special assistant to the Chief Negotiator, and 15 secretaries.

Deng said that Taiwan is facing both grave challenges and abundant opportunities, one of which is the progress of World Trade Organization’s (WTO) Doha Round negotiations.¡§As the world’s seventeenth-largest trading power and one of the WTO’s 150 members, Taiwan is entitled and obligated to do its utmost to contribute to the success of the Doha Round of talks, he said. Citing the proliferation of regional trade agreements as another important trend in world economy, one especially evident in East Asia, Deng said the necessity for Taiwan to engage itself in economic integration with world’s major economies has become even more apparent.

Last May’s Presidential Office National Security Report pointed to the need to appoint a trade representative with full responsibility for handling and coordinating trade talks. The Conference on Sustaining Taiwan’s Economic Development held in July also reached consensus urging the government to set up a specialized trade negotiation agency. President Chen said he was pleased to see the plan realized, calling it¡§an achievement resulting from cooperation between government agencies and a fulfillment of people’s expectations.

Previously, Taiwan’s major trade negotiators have been officials drawn from various agencies who are heavily loaded with administrative tasks, therefore, though as excellent civil servants and the nation’s most important asset, they were not entirely devoted to negotiations, said Vice Premier Tsai Ing-wen in her address.

With the creation of the office, she said, Taiwan’s negotiation efforts will be smarter and more aggressive, as now we have a team always ready to represent Taiwan and defend the nation’s interests. She said that Deng possesses qualities required of a successful negotiator and is the best person to take up the new position. Deng had been Director of the Economic Division of the Taipei Economic and Cultural Representative Office in the U.S.A, Vice Chairman of the Mainland Affairs Council and Deputy Permanent Representative to the WTO.



(March 30, CNA)
Pointing out that few problems exist in business and trade exchanges between Taiwan and the United States, a Taiwan economics official said Thursday that he is confident Taiwan will win the U.S. private sector’s support for the signing of a free trade agreement between the two countries. Fielding questions during an online forum at, Vice Minister of Economic Affairs Fadah Hsieh said that due to the extremely close economic relationship that Taiwan has with the United States as well as to Taiwan’s efforts to address related U.S. concerns over the past few years, very few outstanding issues remain in the sphere of U.S.-Taiwan trade.

However, Hsieh continued, there are still some improvements that need to be made in the areas of pharmaceutical products and agriculture. “We are confident that these issues will be properly addressed in the near future and that the resolution of such issues will help to increase support among U.S. industries for negotiations on a Taiwan-U.S. FTA. Hsieh made the remarks when he and John Chen-Chung Deng, current deputy representative of the Taipei Economic and Cultural Representative Office in the United States, were taking questions online on the prospects and challenges of a U.S.-Taiwan free trade deal.

At the start of the forum, titled “A Path Worth Taking? The Prospects and Challenges of a U.S.-Taiwan Free Trade Deal, “ the host of the forum host said that “in recent years, the creation of numerous free trade agreements (FTAs) around the world has triggered a chain reaction, as countries fearing exclusion move forward to establish their own regional FTAs. Taiwan, the world’s 16th-largest trading power and the United States’ ninth-largest trading partner, has indicated its desire for an FTA with the United States.” “Taiwan’s technology-based economy and role as a doorway to China’s market offers a larger potential trading relationship than any other country currently negotiating an FTA with the United States,” the host said.

After pointing out that “some feel that a U.S.-Taiwan FTA would send an unmistakable signal of U.S. support for democratic Taiwan, while others believe such a trade deal would complicate the United States’ relations in the region, “ the host then asked: Is a U.S.-Taiwan trade pact a path worth taking?” In response, Hsieh said that Taiwan is in a good position to begin negotiations on an FTA with the United States, adding that Taiwan’s government has already reformed many of its policies regarding the few trade barriers cited by the United States, including those in the pharmaceuticals sector, as well as strengthened its intellectual property rights protection.

As will also probably be the case in the United States, Hsieh said, some industries in Taiwan will face increased competition as a result of an FTA. However, he said, Taiwan’s economy is relatively open in most manufacturing sectors and many areas of the service sector. The agriculture sector, by contrast, has liberalized to a lesser extent, although many tariff barriers have been lowered as a result of Taiwan’s accession to the WTO in 2002. “The Taiwan government already has in place a number of programs to encourage Taiwan’s farmers to specialize in horticultural products and higher value-added production. This is meant to help them adjust to the opening up of the market that has taken place so far, “ Hsieh noted. “The rice sector is one area that will need special attention from the government as Taiwan’s economy continues to undergo liberalization. Direct financial assistance to farmers by the government (not tied to production) is one of the ways under consideration to manage the transition. Training in shifting to other crops could be undertaken, as can programs to improve product quality and assist with marketing efforts as farmers move into new product lines,” he added.

Asked whether a Taiwan-U.S. bilateral agreement would be viewed by the Chinese as a direct economic threat, Hsieh responded by saying that Taiwan has no objection to the United States granting China preferential trade treatment, such as Permanent Normal Trade Relations (PNTR) status. As many Taiwanese enterprises have invested in China and established business networks there and as the two sides have developed an increasingly interdependent economic relationship over the past few decades, Hsieh said, Taiwan believes that a benign economic relationship between the United States and China is beneficial for Taiwan because it creates a “win-win-win situation” for the three parties.

The same rationale also applies to a U.S.-Taiwan FTA, Hsieh said. Given the deep economic engagement across the strait, an energetic U.S.-Taiwan economic relationship is definitely good for China in terms of its immediate business interests as well as its long-term economic development, he added.
When asked in what areas U.S. agricultural exports to Taiwan are likely to expand under an FTA, Deng responded by saying that Taiwan has long been one of the major export destinations for a wide variety of U.S. farm products, ranging from wheat to corn to pork. In 2005, for example, U.S. agricultural exports to Taiwan totaled US$2.3 billion. This strong trade relationship suggests that an FTA with Taiwan could provide great benefits for U.S. farmers and ranchers, Deng said, adding that Taiwan is already a leading market for U.S. exports of soybeans, feed grains, apples, peaches, plums, cherries, apricots, corn, celery, lettuce, cabbage, asparagus, broccoli, onions and bovine hides. Economic studies on the FTA suggest that Taiwan would be a very promising market for U.S. exports of fish, foodstuffs and processed foods, he added.

On why a free trade agreement is important for Taiwan, Deng said that a free trade agreement is a form of trade agreement authorized under the rules of the World Trade Organization (WTO) . Under an FTA, he said, two or more trading partners agree to remove tariffs and other barriers to trade to promote mutual economic growth and achieve greater economic integration.

Deng said Taiwan is the United States’ eighth largest trading partner and the fifth largest market for U.S. agricultural exports. In terms of economic security, he said, the objective of forging closer economic ties through FTAs is very important for Taiwan. “We understand that FTAs can lead to trade creation and trade diversion, thereby changing the competitive conditions our exporters face, sometimes favorably and sometimes not so favorably,” he added. For example, he continued, the United States has launched FTA negotiations with several of Taiwan’s neighboring countries, including South Korea, Malaysia and Thailand, and many of these countries’ products compete directly with those of Taiwan in the U.S. market. Added to that are China’s efforts to develop deeper trade relations with the 10-member ASEAN group, he noted.

If such efforts succeed, the resulting scenario would be troubling for Taiwan, since Taiwan could face being bypassed by this wave of regional economic integration. Trade and investment flows would be diverted from Taiwan to other destinations in Asia where FTAs are in place. Such an outcome would result in negative consequences for Taiwan’s future economic development and competitiveness, Deng added.

Monday, March 19, 2007

Taiwan seeks support for FTA with US