Jul 26, 2006

Taiwan Says Trade Accord With U.S. Will Help Region

Taiwan is seeking a free-trade agreement with the United States to enhance economic ties and promote stability in the Asia-Pacific region. Vice Economics Minister Chen Ruey-long called a bilateral pact a "logical next step" between the partners

Taiwan is seeking a free-trade agreement with the United States to enhance economic ties and promote stability in the potentially volatile Asia-Pacific region, a top trade official said on Monday.

Vice Economics Minister Chen Ruey-long, visiting the United States to promote the idea, called a bilateral pact a "logical next step" between partners that recorded $57 billion in two-way trade last year. Washington has yet to embrace a trade pact with Taiwan.

Such a trade deal would give U.S. firms greater access to Taipei's market for financial services, telecommunications, transportation and health care, Chen said. He cited studies estimating that annual U.S. exports to Taiwan would rise between $3.4 and $6.6 billion under an free-trade agreement, or FTA.
"The benefit of an FTA will go beyond purely economics and trade," Chen told Reuters in an interview in Washington.

"It will promote much more stability in the Asian region if there will be an FTA between Taiwan and the USA," he said, adding that the prosperity generated by growing trade was the "key to peace" in his region.

North Korea's missiles and nuclear brinkmanship dominate headlines in Asia. But Taiwan remains a potential flash point, because China claims the self-governing island and retains the right to use force to prevent Taiwanese independence.
Chen spent the past week in San Francisco discussing FTAs with Honduras and El Salvador to add to Taiwan's pacts with Panama, Guatemala and Nicaragua. All five are states which, unlike the United States, have diplomatic ties with Taiwan.
"China doesn't want to see that there are many countries who will enter into an FTA with Taiwan," he said.

China tolerates its diplomatic partners having commercial and unofficial ties with the island, but takes a tough line on official dealings with Taipei. Taiwan enjoys World Trade Organization membership as a separate customs territory.
"It is not reasonable for China to voice any objection to this idea, because this is an arrangement which could be entered into between or among WTO members," Chen said.

WTO talks on a new global trade agreement collapsed on Monday, which spurred speculation that countries would turn their attention to bilateral pacts.

Chen is slated to meet U.S. trade officials and lawmakers and to give a speech promoting the FTA idea. In February a resolution supporting a trade pact with Taiwan was introduced in the House of Representatives with 55 co-sponsors.
Deputy U.S. Trade Representative Karan Bhatia, when asked about FTA prospects at a news conference in Taipei in May, told reporters "we have a very full plate in Washington right now."