Taiwan must consider ‘very influential’ businesses in US trade talks as Washington seeks to ‘cut red tape’
- Taiwan and the US began talks last year over the US-Taiwan Initiative on 21st-Century Trade following deterioration in each party’s ties with mainland China
- On Thursday, the Office of the US Trade Representative proposed a trade deal text to streamline border procedures and ‘cut red tape’ for shipments of goods
Export-reliant Taiwan should consider its “very influential” domestic businesses during its trade talks with the United States, analysts said, as Washington seeks to “cut red tape” for shipments of goods as part of ongoing negotiations.
The Office of the US Trade Representative has proposed the two sides make export shipments easier and faster as part of the US-Taiwan Initiative on 21st-Century Trade, according to a summary of negotiations released on Thursday.
Washington is also seeking rules on regulatory “transparency” and better access to licences for American professional services firms in Taiwan.
You look at Taiwan and it’s in a very weak position and should do whatever the US says, but in Taiwan the businesses are very influential
The US proposals will focus future rounds of dialogue on the small but well-off Taiwanese market, which the American Chamber of Commerce in Taiwan called out last year over “unique” and “strict” industry regulations plus a lack of “integration” with its trade partners.
Taiwan wants a deal more than the US does, said Jayant Menon, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore.
But talks could be derailed if Taiwan’s industry leaders voice fears over competition from US goods or services, said Andy Xie, an independent economist in Shanghai.
“You look at Taiwan and it’s in a very weak position and should do whatever the US says, but in Taiwan, the businesses are very influential,” he said.
US and Taiwan poised to sign a ‘rather symbolic’ trade deal
Taiwan exported US$75 billion worth of goods to the US last year and bought US$45 billion worth of American imports, according to Taiwanese trade data.
Mindful of the US’ trade deficit and the size of their US$25 trillion-plus economy – which is more than 30 times the size of Taiwan’s – US officials are expected to push at the bargaining table.
Washington has proposed a trade deal text to streamline border procedures and “cut red tape” for shipments of goods, the statement added.
“American businesses face challenges exporting their products when there are not clear or efficient import procedures in other customs territories,” it said.
US negotiators have further proposed “good regulatory practices” that include “transparent” measures and publishing draft rules with “adequate time for comments to be considered”, the statement added.
Washington has also asked for “fair” treatment in the granting of licences for US service-sector companies, according to the statement.
It said trouble in obtaining licences “can be a barrier” for architects, engineers, accountants, lawyers and other professional service firms.
When it’s about trade deals, the size of each side means a lot
Roll-out of a US free-trade deal with South Korea, which is economically similar to Taiwan, took around six years as the two sides discussed American barriers to exports of Korean textiles, apparel and steel along with trouble Koreans found accessing a US visa waiver programme.
“When it’s about trade deals, the size of each side means a lot,” said Chen Zhiwu, chair professor of finance at the University of Hong Kong.
Taiwanese firms in sectors, including finance, could be affected if US competitors rush into the market following a trade deal, Menon said.
“The US is trying to leverage that and push for its own firms, and Taiwan might be able to accommodate that for non-economic reasons,” he said.
US to begin second round of trade talks with Taiwan as Beijing watches on
In a separate statement on Thursday, Taiwan’s Office of Trade Negotiations reported “good” progress in negotiations towards the deal.
It said talks on five of the 12 broad topics up for negotiation – including concerns outlined by the US side – should be completed soon.
Other items on the agenda include anti-corruption measures and help for small- and medium-sized enterprises.
Taiwan has proposed issuing electronic receipts through an online system as a way to facilitate trade, but said licenses for American financial firms should be subject to “flexibility” due to “a high need for supervision of the finance sector”, the Taiwanese statement added.
