2023.03 The Taiwan Banker NO.159 / By Hank Huang (黃崇哲)
From flour sacks to sweet potato starch, a new chapter in Taiwan-US cooperationEditor's Note
The US-Taiwan Initiative on 21st-Century Trade, which will critical to the next stage of Taiwan’s economic development, is expected to target “trade facilitation, good regulatory practices, anticorruption, SMEs, and service domestic regulations.” The negotiations have progressed far more smoothly than expected. The five major issues will be signed first, and the others will be stacked like building blocks to build a bilateral trade agreement (BTA) between Taiwan and the US with high standards, which will deepen economic and trade relations in specific ways. In addition, this BTA will serve as the basis for dialogue on other bilateral and multilateral trade agreements, creating momentum for Taiwan’s economy. Although some have cautioned that tariff concessions were not discussed, and others even worry that close Taiwan-US cooperation will turn TSMC into US Semiconductor Manufacturing Company, as the name of this trade agreement shows, the topic of discussion will be economic concerns in the new century. Topics like trade liberalization and anticorruption have replaced pricing as the condition for mutual cooperation. On the contrary, it is agreement on the value of economic activities which serve as the foundation for mutually beneficial cooperation. Partners with common values can join hands amidst the fierce competition of international markets to strengthen each other's economies and maintain the standards recognized by each. This point echoes the concept of “friendshoring” advocated by the US – that supply chains should be relocated to trusted countries, and partnerships deepened with countries who share economic operation rules and values. In particular, Taiwan has been excluded from global partnerships due to political factors, despite being one of the world's important economies. The BTA will give it the opportunity to prove to the world that it is ready to meet the economic rules of the new century. I hope that it will expand mutual business exchanges in like-minded countries, in order to make our economy more competitive. The discussion on SME issues, for instance, highlights concern for development of the economically disadvantaged. The two countries will jointly promote and support trade activities of SMEs in both countries through relevant provisions, and also make special efforts to improve the business conditions for women and other vulnerable groups. In other words, at the same time that US SMEs will be welcome to invest in Taiwan, Taiwanese SMEs will go to the US for trade and investment with a more transparent and fair market position, and will no longer need to worry so much about license applications. Combined with simplified border trade procedures, this will allow Taiwanese SMEs to reduce their risks and strive for greater opportunities in the US market. It would be ideal if Taiwan’s relatively advantaged programmers, or young entrepreneurs who may want to open a bubble tea chain store with the support of Taiwanese agricultural specialties, could make a short hop into the American market and compete more conveniently. In fact, the US has long used economics and trade to defend its national interests and values, with the participation of Taiwan. During the Cold War, American investment and aid created jobs and foreign exchange income, allowing Taiwan and the other Asian tigers to create an economic miracle in East Asia. Today, in addition to relying on Taiwan’s advanced chips to maintain various manufacturing lines, the US is also the largest export market for its tapioca pearls. Who would have thought that the Republic of China, which stood at the forefront of anti-communism during the Cold War, would grow and transform with the help of flour sacks printed with “China-US cooperation,” and eventually give job opportunities and new flavors back to Americans? In the future, through the US-Taiwan Initiative on 21st-Century Trade, the SMEs and next generation of both countries will create new possibilities for the world, demonstrating the possibilities of high-standard international trade in the new model of cooperation.