US-Taiwan Free Trade Agreement

Summary

As Taiwan lifted its import ban on pork with ractopamine, the major obstacle for a US-Taiwan FTA has been removed. It is time for USTR to consider starting to negotiate a bilateral trade agreement with Taiwan.

Taiwan Permitted U.S. Pork Import

On December 2020, the Taiwan Parliament passed legislation that allows U.S. pork with ractopamine residue to be imported, which was a long time precondition for USTR to enter into FTA negotiations with Taiwan.

Taiwan is One of U.S. Largest Trading Partners

Taiwan was the 11th largest U.S. trading partner with over $10 billion U.S. services exports in 2018, yielding a surplus for the U.S. of over $1.6 billion.
Taiwan is also the 8th largest agricultural export destination for the United States in 2018. U.S. trade deficit to Taiwan also decreased by 7.3% from 2017. As a result, Taiwan is an important source of job creation for the United States.

Strong Congressional Support

During the 116th Congress, 161 House of Representatives and 50 Senators signed separate joint letters to USTR to call for a trade negotiation with Taiwan.

A US-Taiwan FTA Can Strengthen Taiwan’s Sovereignty

  • Taiwan is overly reliant on the Chinese economy: 40% of exports and 70% of investment goes to the Chinese market. This gives the PRC a leverage to affect the political decision making in Taiwan and as a consequence undermines Taiwan’s sovereignty.
  • The PRC has been blocking Taiwan from signing FTAs with other countries. As a country that strongly supports market economy, it is in the U.S. interest to oppose the PRC’s bullying of Taiwan by signing a US-Taiwan FTA.

Related Bills

  • S.Res.804 (116th): A resolution expressing the sense of the Senate that the United States should initiate negotiations to enter into a free trade agreement with Taiwan. 
  • H.Con.Res.117 (116th): Expressing the sense of Congress that the United States should resume normal diplomatic relations with Taiwan, negotiate a bilateral free trade agreement with Taiwan, and support Taiwan’s membership in international organizations.