May 27, 2016
The Future of Trade in Taiwan
By Atlantic Council
Dr. Wethington remarked that the future of TPP is genuinely insecure in the current domestic context. He also mentioned that, despite current challenges, Taiwan’s economy has been outperforming expectations and has become an essential part of the global supply chain, particularly in electronics and information technology (IT). In the context of institutional positioning, he pointed out that Taiwan’s participation in global and regional institutions is not aligned with its economic performance. Lastly, he mentioned that the United States has to advocate deeper institutional integration of Taiwan, which is in the interests of the United States, its allies, and the world economy. He specifically mentioned three things: 1) the United States should not just wait until TPP is in place, 2) the United States needs a more politically-committed diplomatic strategy, and 3) the United States should tell Beijing to pay attention to the mindset of the Taiwanese people.
Ms. Overby discussed the US-Taiwan trade relationship. She mentioned about significant US policy concerns, especially in agriculture. A lack of transparency in the regulatory process is also a key concern for American businesses. Taiwan also faces trade challenges, for instance, with other countries localizing their entire supply chain and Taiwan’s over-reliance on China as an export market. Recently, President Tsai placed high priority on joining TPP. Taiwan’s inclusion in TPP will increase the trade pact’s GDP by over $74 billion. To Join TPP, Taiwan needs to address standards on foreign meat imports and non-tariff barriers pertaining to Taiwan’s nontransparent regulatory approval process. Taiwan also should create a high-level TPP preparation task force within the executive branch and reform its Administrative Procedure Act to provide more time for public feedback.
Ms. Cutler emphasized that Taiwan is facing a lot of economic challenges, including a decrease of economic growth, and an increase of unemployment, particularly for youth. She outlined seven steps for countries that are interested in joining TPP: 1) Study the TPP text in detail, 2) resolve bilateral issues of concern, 3) build support in the home economy, 4) develop an effective negotiating structure for trade agreements, 5) build support for inclusion in other TPP countries, 6) consult bilaterally with other TPP countries, and 7) avoid waiting until they participate in the TPP negotiation to undertake reforms or changes in their economy. Ms. Cutler especially emphasized the final step. She mentioned that implementing some reforms right away not only helps the economy but also demonstrates their seriousness of wanting to participate in the negotiation.