2023-0601: U.S.-Taiwan Initial Trade Deal; Taiwan Receives Missiles Under U.S. Military Aid; Ex-Australia PM Turnbull’s Remarks in Taipei

Taiwan, U.S. to Sign Initial Agreement Under Bilateral Trade Initiative

Taiwan and the United States will sign an initial trade deal on June 1 under the “U.S.-Taiwan Initiative on 21st Century Trade,” Taiwan’s government said, hoping that would pave the way for a full-scale free trade agreement (FTA) with the U.S. to ensure Taiwan’s economic security.

The signing of the deal, officially called the “First Agreement,” will take place in Washington DC at 10 a.m. local time on June 1, exactly one year after the two countries launched the trade initiative.

According to the office of the United States Trade Representative (USTR), the agreement will be signed by Taiwan’s envoy to the United States, Hsiao Bi-khim, and the managing director of the American Institute in Taiwan’s (AIT) Washington headquarters, Ingrid D. Larson.

In addition, the ceremony will be witnessed by Taiwan’s top trade negotiator John Deng and deputy U.S. trade representative Sarah Bianchi.

Over the past year, trade negotiators from both sides have conducted two rounds of negotiations to finalize the initial agreement, which covers customs and trade facilitation, regulatory practices, domestic regulation of services, anti-corruption practices, and small- and medium-sized enterprises.

Taiwan’s government has described the deal as “the most comprehensive” trade agreement signed with the U.S. since 1979.

However, the First Agreement does not cover tariff reductions or exemptions, but instead outlines practices and procedures to streamline and strengthen trade relations between the U.S. and Taiwan.

The deal that will be signed today “is not only very historic but also signals a new beginning,” Taiwan’s cabinet spokesman Alan Lin told reporters in Taipei on June 1.

“Relevant tasks are yet to be completed…. Taiwan will continue to move towards a full-scale FTA (free trade agreement) with the United States to ensure Taiwan’s economic security,” he added.

After signing the initial agreement, negotiations will start on other, more complicated trade areas, including agriculture, digital trade, labor and environmental standards, state-owned enterprises, and non-market policies and practices, the USTR has previously said.

[1] Focus Taiwan: https://focustaiwan.tw/business/202306010002
[2] CNA (Mandarin): https://www.cna.com.tw/news/aipl/202306010104.aspx
[3] Reuters: https://www.reuters.com/markets/taiwan-sign-first-deal-under-new-trade-framework-with-us-2023-05-31/

Taiwan Receives Stinger Missiles Under U.S. Military Aid Program: Report

Taiwan reportedly received a batch of FIM-92 shoulder-fired Stinger missiles on May 25 from the United States under its emergency military aid program, but Taiwan’s government would not confirm the news.

Taiwan’s Ministry of National Defense (MND) has taken delivery of the missiles, which arrived at Taiwan Taoyuan International Airport overnight on May 25, the Liberty Times reported.

The package was part of a US$500 million military aid that U.S. President Joe Biden’s administration recently decided to supply to Taiwan, using the Presidential Drawdown Authority (PDA) authorized by the FY 2023 National Defense Authorization Act (NDAA).

Taiwan and the U.S. were in talks and reached a consensus about the types of weapon systems that would be needed if the U.S. invoked PDA to address the backlog of arms due for delivery to Taiwan, the MND said, in response to the report.

The MND added that it would not reveal details about the delivery based on its practice regarding weapons packages.

The package is believed to include weapons systems earmarked for Taiwan, but whose delivery had been delayed due to the Russia-Ukraine war and supply chain issues related to the COVID-19 pandemic.

As a part of the 2023 budget, the U.S. Congress authorized up to US$1 billion in military aid to Taiwan via the PDA, which authorizes the U.S. president to transfer defense articles and services from U.S. stockpiles and ship them overseas during an emergency.

On May 8, Taiwan Defense Minister Chiu Kuo-cheng confirmed a Reuters report which said that the Biden administration was planning to send US$500 million worth of military aid to Taiwan under the PDA program that has been used to help Ukraine defend itself against Russia’s invasion.

On May 16, U.S. Defense Secretary Lloyd Austin confirmed at a Senate hearing that a substantial military aid package would be soon delivered to Taiwan using the PDA.

[1] Focus Taiwan: https://focustaiwan.tw/politics/202305260016
[2] Taipei Times: https://www.taipeitimes.com/News/front/archives/2023/05/27/2003800503

Nations Have the Right to Determine Their Own Destiny: Ex-Australia PM Turnbull

On May 29, former Australian prime minister Malcolm Turnbull said in Taipei that nations have the right “to determine their own destiny free from coercion,” and democracies must stand together to “ensure the strong do not do as they will.”

Turnbull made the remarks in his keynote speech at an annual forum hosted by the Center for Asia-Pacific Resilience and Innovation (CAPRI) think tank.

He said the fact that CAPRI had chosen to base itself in Taipei was of enormous significance because “Taiwanese perspectives and experiences are more important than ever.”

Turnbull, who served as Australian prime minister from 2015 to 2018, said the challenges posed by authoritarian governments had gone from “menacing, bullying to the brutal violence of war” in recent years.

Nonetheless, Russia’s invasion of Ukraine has made NATO stronger and the Western world “more united in defense of democracy than ever,” he said.

Ukrainians’ tenacious and courageous fight against Russia demonstrated that “democracies must support each other,” he said.

Democracies in the Asia-Pacific region should “ensure the strong do not do as they will” and that “the big fish, in Lee Kuan Yew’s words, do not eat the little fish,” he added.

“Our resolute defense of democracy, and the right of nations to determine their own destiny free from coercion, must never flag or falter,” he emphasized.

Turnbull, who serves as chair of CAPRI’s International Advisory Council, was making his first visit to Taiwan.

[1] Focus Taiwan: https://focustaiwan.tw/politics/202305290011
[2] Taipei Times: https://www.taipeitimes.com/News/front/archives/2023/05/30/2003800650