Taiwan can be a quick trade victory for the US in 2020

The flurry of trade negotiation announcements over recent months demonstrates an ambitious trade agenda for the United States this year. With the United States-Mexico-Canada trade agreement (USMCA) and Phase One of the Japan and China deals done, the administration’s gaze now turns to the European Union. Bilateral trade negotiations with Kenya and India were just announced. Vietnam and the Philippines have also been mentioned as potential partners. Why not Taiwan? The economic benefits would be huge, the security benefits compelling, Congress is supportive. And it would be a quick win in 2020 for American farmers and manufacturers.

A proliferation of regional trade agreements have undermined Taiwan’s economic opportunities. These agreements have excluded Taiwan under pressure from Beijing. China also prevents Taiwan from joining a number of important international organizations. The risks of Taiwan’s exclusion from organizations such as the World Health Organization have been made painfully clear from the recent coronavirus outbreak. A U.S.-Taiwan bilateral trade agreement, or BTA, would not only help reduce Taiwan’s isolation and economic reliance on China, the Congressional Research Service postulates that it would give other governments cover to resist pressure from Beijing and pursue similar agreements with Taiwan.

Taiwan serves as a model of democracy, freedom, respect for human rights and the rule of law for the Indo-Pacific region. According to Freedom House’s 2019 “Freedom in the World Index,” Taiwan scored 93 out of 100 (equal to that of the UK), and was ranked 42nd in the Reporters Without Borders’s 2019 World Press Freedom Index, ahead of Japan (67th), Hong Kong (73rd), and Singapore (151st). A high-standard BTA with Taiwan would thus support a like-minded beacon of democracy in a region that is increasingly hostile to these shared values. We only need to consider what has happened in Hong Kong to recognize the severity of the threat.

A U.S.-Taiwan BTA would bolster U.S. security. Taiwan sits in a tense region of the world and is under tremendous pressure from Beijing. Taiwan is a like-minded partner in the U.S. Indo-Pacific Strategy sitting at the center of the region atop crucial sea lanes, and offers the U.S. a key transportation and strategic hub.

Finally, moving ahead with Taiwan would be an economic win for American manufacturers and farmers. Taiwan plays an outsized role in strategically vital sectors of the U.S. economy, including sophisticated electronic components crucial for advanced U.S. defense systems. U.S. manufacturers thus benefit from having Taiwan as a strategic, secure, innovative, nimble, and reliable technology partner. A trade deal with Taiwan could help secure United States and allied supply chains by accelerating the reorganization of Asian supply chains currently underway. Moreover, Taiwan provides a resilient and growing market for U.S. farmers. Taiwan is the United States’ 8th largest global purchaser of U.S. agricultural products. A BTA will create further growth opportunities for U.S. agriculture exporters as the few remaining market access barriers are addressed during negotiations.

President Tsai Ing-wen was re-elected on Jan. 11 with a strong resolve to deepen the economic relationship with the United States. More than 160 bipartisan members of the United States Congress sent a letter to U.S. Trade Representative Robert Lighthizer in December of last year in support of a U.S.-Taiwan BTA. Taiwan is ready to move quickly to negotiate a high-standard, comprehensive, rules-based, enforceable BTA which will create more jobs and promote security and economic growth for both the United States and Taiwan and the Indo-Pacific as a whole. That indeed would be a sizeable win for the United States in 2020.

Stanley Kao is representative of the Taipei Economic and Cultural Representative Office in the U.S.