Experts Talk U.S.-Taiwan Trade

At a think tank event yesterday, trade experts discussed issues related to trade with Taiwan, including Chinese economic coercion, U.S.-Taiwan trade talks, and the CPTPP.

The Hudson Institute event was moderated by Riley Walters of Hudson, and featured Abby Fu of Hudson, Wendy Cutler of the Asia Society Policy Institute, and Rupert Hammond-Chambers of the US-Taiwan Business Council.

One issue they talked about was China's overall strategy on Taiwan and "the CCP's efforts to absorb Taiwan into the People's Republic of China." On this point, Hammond-Chambers said that "a big part of the Chinese strategy at the moment is economic coercion," and "what they're in essence attempting to do is to create this view that Taiwan is a dangerous place to do business." He explained that they are trying to "curb the upward economic trajectory of Taiwan," while "putting themselves forward as the only real option for the Taiwan economy's long term future."

With regard to trade negotiations that Taiwan might engage in with the United States, Hammond-Chambers referred to the Biden administration's US-Taiwan Initiative on 21st Century Trade, which is comparable to the IPEF. While these "are useful," he said, only a Trade and Investment Framework Agreement (TIFA) "can actually handle trade liberalisation in areas that are critical for us, like investment, tax, agriculture."

Wendy Cutler countered that a full-fledged free trade agreement may not be the best approach here, saying that "I'm a big proponent of this 21st century trade initiative announced by USTR a few months ago." She argued that "it's a really good start and further than we've gone with Taiwan in the past," and is "a much better platform for strengthening our trade ties than TIFA." By contrast, FTAs are very difficult to negotiate, and she said that "if and when there is a consensus to move forward on an FTA track, let's make sure we do the proper preparatory work with Taiwan so that there are no surprises, and that the FTA doesn't actually create tension between the United States and Taiwan but actually brings us closer together."

On this same point, Abby Fu added that realistically she didn't think that an FTA "is something that is achievable within the shorter window of time that we have," and she was optimistic about the US-Taiwan initiative on trade as a substitute.

Finally, in a brief comment on Taiwan's application to join the CPTPP, Riley Walters mentioned that its chances of acceding are "really uncertain without the United States being there." While Japan is supportive, "without the United States being a member, it's really up in the air."