Taiwan’s Economy and the Role of a US-Taiwan FTA

Taiwan’s Economy and the Role of a US-Taiwan FTA

This article opens with a description of the recent performance of Taiwan’s economy and the state of its trade and investment ties with the US. It outlines the government’s current major economic development plans, states Taiwan’s stance on multilateral trade liberalization and the establishment of a Free Trade Area of the Asia-Pacific (FTAAP), and explains the importance of Taiwan’s role in the global value chain and the necessity of its inclusion in regional free trade arrangements.
The main nub of the article is to set out the case in favor of a US-Taiwan FTA, including: (1) the benefits to US firms from having first access to Taiwan’s strongly developing service markets; (2) the opportunities for US firms to enhance their participation in Taiwan’s huge government procurement market; (3) the boost to US exports to Taiwan, especially for agricultural products; and (4) the advantages to the US in the intellectual property sphere. After comparing the merits of US-Taiwan and US-Korea FTAs, the article describes the latest developments in cross-strait opening, and concludes with a summary of compelling reasons why it is in the best interests of the US to start negotiations for an FTA with Taiwan as soon as possible.