Houston Community News >> U.S. - Taiwan Free Trade Agreement
5/28/2006 Taiwan-- Deputy U.S. Trade Representative Karan K. Bhatia said yesterday in Taipei that it would be premature to discuss a free trade agreement with Taiwan, a remark that put paid to President Chen Shui-bian's hopes of establishing an Free Trade Agreement (FTA) with the U.S. as soon as possible.
Bhatia, the highest-ranking official from Washington to visit Taiwan in six years, is currently attending a two-day meeting under the Trade and Investment Framework Agreement, which was established in 1994 to resolve bilateral trade issues and enhance economic cooperation, before going on to Vietnam and India. Bhatia was received yesterday morning by Chen, who said that the signing of a U.S.-Taiwan Free Trade Agreement or the establishment of a closer economic partnership would leave China with less power to isolate Taiwan and to refuse to hold dialogue with the island. Such an agreement would not have any political considerations and should be solely based on the economic and trade interests it could potentially generate, Chen added.
Bhatia, however, pointed out during a speech made to the members of the American Chamber of Commerce in Taipei that the U.S. has a number of ongoing FTA negotiations underway, including proposed agreements with South Korea, Malaysia and Thailand, and is also in talks with other Asian countries to strengthen bilateral trade ties. "It will be extremely difficult for us to take on any additional FTA partners during the next year," he said.
While stressing that the U.S. would not rule out any mechanism to further enhance reasonable economic cooperation with Taiwan, Bhatia however said that the liberalization of Taiwan's self-imposed barriers to cross-strait trade would help move Taiwan's economy to the next level of economic development and benefit its own people. "It is clear that Taiwan's continued economic vibrancy will require progress in removing cross-strait economic restrictions," Bhatia said. He suggested that to ensure Taiwan's continuous participation in the region's dynamic economic growth requires the pursuit of policies consistent with the evolving strategies of multinational businesses.
Bhatia noted that although Taiwan's policymakers have begun to realize the need for robust cross-strait economic links and have implemented a series of new measures in the past two months, Taiwan should also be aware that retaining restrictions on cross-strait transfers of personnel and commodities and the lack of direct cross-strait air and shipping links would "create uncertainty as well as a distinct competitive disadvantage for Taiwan." "I encourage policymakers here to consider how the economy can be set on a course towards a restriction-free environment," he added.
Taiwan is the U.S.' eighth largest trading partner, with nearly US$57 billion in two-way trade last year. As of 2003, U.S. direct investment in Taiwan had reached US$12.1 billion, while Taiwan had stock of US$3.2 billion in FDI in the U.S. in 2004, Bhatia.