U.S. Senate Passes Bill Approving U.S.-Taiwan Initial Trade Agreement
On July 18, the U.S. Senate unanimously passed the “United States-Taiwan Initiative on 21st-Century Trade First Agreement Implementation Act” (H.R.4004), affirming Congressional support for the initial trade agreement reached under the “21st Century Trade” initiative.
The bill, which already cleared the U.S. House of Representatives on June 21, was passed in the Senate by a voice vote, and will be sent to President Joe Biden to be signed into law.
Taiwan and the U.S. signed the “First Agreement” under the “21st Century Trade” initiative on June 1, which covered customs and border procedures, regulatory practices and small business, to make trade and investment between the two countries easier.
Following the signing, the two sides said they plan to begin negotiations on other, more complicated issues, such as agriculture, digital trade, labor, environmental and nonmarket policies and practices, and state-owned enterprises and standards.
In addition to approving for the initial trade agreement, the bill will ensure that future U.S.-Taiwan trade agreements are subject to strict requirements on consultation with Congress and transparency for the American public, the U.S. Senate Committee on Finance said in a statement on July 18.
Meanwhile, in Taipei, Taiwan’s Presidential Office on July 19 thanked the U.S. Senate for passing the trade bill. It added that the bill’s passage by the U.S. Congress was smooth and fast, demonstrating bipartisan support in the United States for bolstering economic and trade relations with Taiwan.
The 21st-Century Trade initiative is an important milestone in deepening U.S.-Taiwan trade relations, Taiwan’s Ministry of Foreign Affairs (MOFA) said in a statement on July 19.
In coordination with the Executive Yuan’s Office of Trade Negotiations, MOFA will continue to work closely with the U.S. administration and Congress to elevate the Taiwan-U.S. trade partnership to the next level, the ministry added.
References:
[1] Taipei Times: https://www.taipeitimes.com/News/front/archives/2023/07/20/2003803451
[2] Focus Taiwan: https://focustaiwan.tw/politics/202307190007
U.S. House Introduces Bipartisan Bill Calling for Tax Agreement with Taiwan
On July 19, U.S. House Affairs Relations Committee Chairman Michael McCaul (R-TX), Ranking Member Rep. Gregory W. Meeks (D-NY), and Rep. Gerry Connolly (D-VA) introduced the bipartisan “Taiwan Tax Agreement Act of 2023,” authorizing the Biden administration to negotiate and conclude a tax agreement with Taiwan.
This potential U.S-Taiwan tax agreement would facilitate investment, protect against tax evasion, and allow businesses in both the U.S. and Taiwan to avoid double taxation.
So far, the United States has entered into tax treaties covering 65 jurisdictions, which facilitate economic activity, strengthen bilateral cooperation, and benefit U.S. businesses and individual taxpayers.
“I am proud to introduce this important, bipartisan legislation that will strengthen our economic relationship with Taiwan,” Chairman McCaul said in a statement.
“In addition to the advantages we will receive from more investment from Taiwan, this is another important step in safeguarding Taiwan and maintaining peace and stability in the Indo-Pacific,” he added.
The bill would authorize the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office (TECRO) to negotiate a tax agreement to deal with double taxation issues.
It also stipulates that the tax agreement shall not take effect until after Congress passes a concurrent resolution of approval.
Companion legislation (S.1457) was introduced in the Senate by Senators Bob Menendez (D-NJ), Jim Risch (R-ID), Chris Van Hollen (D-MD), and Mitt Romney (R-UT) on May 4. It was subsequently approved by the Senate Foreign Relations Committee on July 13.
When Taiwan President Tsai Ing-wen met with a U.S. Congressional delegation in Taipei on July 4, she told them that Taiwan hopes to negotiate an agreement with the U.S. on avoiding double taxation, as it would encourage bilateral investment and trade cooperation, and create more opportunities for businesses from both countries.