The island`s government hopes the United States has entered into bilateral trade agreements because it does not participate in the Regional Comprehensive Economic Partnership (RCEP), the world`s largest free trade agreement signed last week by 15 Asia-Pacific countries, including China. And from the U.S. perspective, a free trade agreement with Taiwan would also bring modest economic benefits. The IMF has put Taiwan`s economy in place. Its GDP of nearly $600 billion lies between Switzerland and Poland. But this underestimates its commercial role: Taiwan is America`s tenth largest trading partner, ahead of India or France. The world`s largest free trade agreement was signed on Sunday and includes 15 Asia-Pacific nations. Taiwan is not one of them. But the country has reason to be optimistic about its willingness to forge international trade agreements despite its ongoing diplomatic isolation. “We are confident that a trade agreement between the United States and Taiwan would promote the security and economic growth of the United States, Taiwan and the Indo-Pacific area as a whole,” the letter says. In August, Tsai said Taiwan would ease restrictions on U.S. imports of pork and beef, which were seen as the main obstacle to a trade agreement between the two countries.
Taiwan had blocked the importation of certain meat products containing ractopamine, an animal feed additive that is banned in most countries. Talks that took place in the midst of a controversial transition period for the US president and high regional tensions with China have not prospered Taiwan`s hopes of a trade deal with the US, although Donald Trump`s two countries have moved closer and pushed Beijing back. Taiwan and the United States held their first high-level meetings as part of a new economic dialogue in which a five-year agreement was reached and future cooperation in the areas of health, technology and security was agreed. First, it must be a comprehensive agreement that must include manufacturing, services and agriculture. You cannot repair or improve a free trade agreement after it has been signed, so it is worth spending the time necessary to make it a world class. The most sensitive sector is expected to be agriculture, as Taiwan has a large number of smallholder farmers. The island government will have to find mechanisms to help those who are struggling to compete. Instruments such as a national bank and a reverse mortgage could go around, so a farmer could sell his land to the government in exchange for a perpetuity ability to retain the property as a residence with 20 years of guaranteed income. Dick K. Nanto of CRS stressed that free trade agreements are an essential part of the long-term U.S. economic strategy, which also includes a strategic component.
According to Nanto, any trade agreement must go through the U.S. Congress. He said that following the previous day`s U.S. elections, new members are likely to be more nationalistic and less inclined to support globalization and free trade. So there is a trade agenda, but it will be less of a priority for the new Congress. He pointed out that two resolutions were adopted by the two houses that support a free trade agreement for Taiwan, but the overwhelming majority of the signatories in both cases were Republicans. Nanto agreed that the other major obstacle to a free trade agreement between the United States and Taiwan would be China. Both the U.S. government and the U.S. economy are reluctant to get to Beijing`s ire. Taiwan`s Foreign Ministry also said Sunday that it would continue its initiative to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) agreement, an agreement that grew from the Trans-Pacific Partnership (TPP) abandoned after the United States withdrew from the agreement. “I don`t think they already have a preliminary conclusion on a [bilateral trade agreement] or a [free trade agreement] that says that`s not what they want to pursue.