EDITORIAL: Paving the way for trade pacts
Last week, Taiwan and the United States announced the launch of the “Taiwan-US 21st Century Trade Initiative” to pave the way for a bilateral trade agreement, while also engaging with the EU on improving semiconductor supply chain resilience via a rare ministerial-level discussion. The latest developments are a welcome boost after Taiwan was left out of the US-led Indo-Pacific Economic Framework (IPEF) when it was launched by US President Joe Biden during his May 23 visit to Japan.
The government touted last week’s trade talks as major trade breakthroughs for Taiwan in its economic and trade relations with the United States and the EU. In general, industry representatives and trade groups welcome the new initiative between Taiwan and the United States, hoping that it will lead to a bilateral trade agreement between the two parties, allowing companies to benefit from lower tariffs and of better competitiveness. Eventually, they expect it to become a stepping stone for Taiwan to improve trade and economic relations with other economies and nations.
Nonetheless, the talks have drawn strong objections from Beijing as China continues its efforts to marginalize Taiwan. They have also drawn criticism from opposition lawmakers and critics in Taiwan that the initiative – which covers trade facilitation, regulatory practices, agriculture, anti-corruption measures, small and medium enterprises, digital trade, labor rights, environment and state- owner-owned businesses—lacks specific content and excludes tariff reductions and improved market access that free trade agreements would provide. traditional exchange.
However, high-level trade talks – such as the one between Minister without Portfolio John Deng (鄧振中) and Deputy US Trade Representative Sarah Bianchi on Wednesday and between Economic Affairs Minister Wang Mei-hua (王美花) and the Chief Executive of EU for Trade Sabine Weyand Thursday – help Taiwan achieve its goals of striking as many trade deals as possible with major economies. These talks are also helping to strengthen Taiwan’s position in rebuilding the resilience of global supply chains, especially on the semiconductor front. Moreover, the Taiwan-American initiative largely parallels the IPEF, even though Taiwan was excluded from the first round of IPEF membership.
What is more important is how the new trade talks could unfold and create opportunities for Taiwanese companies to expand their global reach and benefit the country’s economy. The substantive content of the new initiative will only be unveiled when the two sides hold their first face-to-face talks in Washington later this month, while progress in deepening relations with the EU on trade, investment and other strategic issues also depend on further discussions by new working groups. At the very least, last week’s high-level trade talks established negotiating mechanisms for nurturing closer relations with the US and EU.
The government has long maintained a building block approach to signing free trade agreements with other major economies, with areas of concern discussed first, setting aside issues that cannot be addressed at the moment and hoping to resolve those issues. thorny, including customs tariffs, when the time comes. A trade deal is always made through give and take between all parties, with gains in some areas and losses in others being part of the negotiation process.
Only when there is steady progress at the working group level will Taiwan and its major trading partners, such as the United States and the EU, perpetuate the negotiating mechanisms and thus pave the way for conclusion of bilateral trade agreements. In this regard, the question is not only whether Taiwan can properly resolve the issues that concern its trading partners during the year, but also whether the nation can achieve maximum gains in negotiations based on the agreements. reached during the talks last week.
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