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US-Taiwan

The discussion around a possible bilateral free trade agreement between Taiwan and the US has been drawn out for years, with Taiwan requesting and the US acting lukewarm toward the idea.

At stake in any kind of bilateral trade or investment deal here is, first and foremost, the political standing of Taiwan vis-a-vis China and the rest of world. An FTA with Washington would amount to US recognition of Taiwan’s sovereignty and independence from China. This goes against Chinese policy and could trigger military action. The US adheres to Beijing’s "one China" policy while it maintains unofficial relations with Taiwan.

The economics of a potential deal are another story. Taiwan is the US’ eighth largest trading partner, and sixth largest importer of US agricultural goods, and wants its own terms of access to US markets. But the US insists that the actual benefits of an FTA for Taiwan would not be important, even though Washington constantly pressures Taiwan to improve its policies on electronic commerce, government procurement, intellectual property, food safety and US beef for the benefit of American corporations.

In the meantime, the two governments, through their respective proxy agencies, signed a sort of Trade and Investment Framework Agreement in 1994 and conduct discussions through the TIFA Council.

last update: May 2012


Taiwan: Cabinet to set up special task force for US FTA talks
The Cabinet will set up a special task force to handle the signing of a free-trade agreement (FTA) with the US in a bid to speed up the trade negotiations that have been stalled since the beginning of last year, Premier Yu Shyi-kun announced yesterday.
PNAC Paper: A US-Taiwan Free Trade Agreement
A review, published by the right-wing Project for a New American Century, of reasons why the US should go into an FTA with Taiwan.
US-Taiwan FTA would have limited impact
A report released October 21 by the U.S. International Trade Commission (ITC) concludes that a free trade arrangement between the United States and Taiwan would likely have a "very small" impact on the overall U.S. economy, but trade flows for certain trade sectors would probably "increase substantially."
Taiwan-US TIFA expected to resume this fall
Bilateral U.S.-Taiwan consultations under the Trade and Investment Framework Agreement are expected to be resumed this year, probably in the fall, a senior U.S. trade official said yesterday.