Monday, October 29, 2007

The Case for Taiwan-U.S. Free Trade

Free Trade has for some time been a driving force behind United States foreign relations and the role many Americans envision for their nation in the twenty-first century. Scholars, economists, innovators and businessmen and women envision a global marketplace where trade barriers have been drastically lowered or eliminated altogether; where products are more easily distributed worldwide and exchanged freely internationally as well as domestically.

Free trade, of course, is not an idea that has arrived without protest. There are concerns that unique cultures and the identities of underdeveloped nations will fall prey to the larger international market, as purveyors of locally produced goods are driven out of business by large corporations producing similar goods for less elsewhere. Yet when two modern and industrially developed nations engage each other in free trade, there cannot be much doubt that the relationship is beneficial for both.In this light, there is much to gain and little to lose when it comes to a Free Trade Agreement (FTA) between the United States and Taiwan.

Proponents of such a bilateral international deal on both sides of the Pacific have brought forth various proposals for a Taiwan-U.S. Free Trade Agreement, or TUFTA. Beginning in 2001 with the introduction of a bill by Senator Max Baucus of Montana (D) entitled, “United States-Taiwan Free Trade Agreement Act of 2001,” members of Congress from both sides of the aisle have increasingly sought to hammer out a finalized version of TUFTA for approval by the governments of the United States and Taiwan.

Most recently, on May 1, 2007, House Concurrent Resolution 137 was introduced by Congresswoman Shelley Berkley of Nevada (D) on behalf of herself and Congressmen Jim Ramstad (R-MN), Robert Wexler (D-FL), Steve Chabot (R-OH) and Dana Rohrabacher (R-CA). The bill would express “the sense of the Congress that the United States should increase trade opportunities with Taiwan by launching negotiations without delay to enter into a free trade agreement with Taiwan.” H. Con. Res. 137 currently has 27 cosponsors and is awaiting action by the House Subcommittee on Trade.

We believe that a Free Trade Agreement between Taiwan and the United States is an important next step in preserving and strengthening the economic and strategic alliance between Taiwan and the United States. Taiwan is a natural economic hub for the East Asia and Pacific region, and by negotiating lower trade barriers, the U.S. government will secure an arrangement in which American firms will be better able to access supply chains throughout the region (including in China) by participating in Taiwan’s marketplace. Taiwan too will benefit by increasing the level of bilateral trade with its fourth largest trading partner and introducing American influence and competition into its large yet underdeveloped domestic services sector.

Taiwan already heavily imports quality U.S. agricultural goods such as beef, fruits, and nuts, and these imports would expand under lower tariff rates. Taiwan’s consumers would benefit from lower overall prices while American farmers, ranchers and growers would benefit from an expanded market for their products. In short, the current proposal for TUFTA would enhance and catalyze an already symbiotic economic relationship.Every year that passes without the creation of a United States-Taiwan Free Trade Agreement represents a massive missed opportunity worth billions of U.S. dollars in terms of bilateral trade and the strengthening of commercial networks in the western Pacific Rim.

As the United States continues to expand its international Free Trade portfolio, we can only hope that TUFTA appears at or near the top of the list.

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