Washington announces start of talks for bilateral trade agreement with Taiwan

Robert Delaney and Lawrence Chung, South China Morning Post

Posted at Aug 18 2022 06:54 PM

US deputy trade representative Sarah Bianchi  EPA-EFE
US deputy trade representative Sarah Bianchi said a first round of talks with Taiwan would start in early autumn to “develop an ambitious road map for negotiations under the US-Taiwan Initiative on 21st-Century Trade”. Photo: EPA-EFE

The US government announced on Wednesday it had started negotiations with Taiwan on a bilateral trade agreement meant to cut red tape, harmonise labour standards and resist non-market practices, a move apparently aimed at countering mainland China.

US deputy trade representative Sarah Bianchi said a first round of talks would start in early autumn to “develop an ambitious road map for negotiations under the US-Taiwan Initiative on 21st-Century Trade”.

The negotiations will take place under the auspices of the American Institute in Taiwan (AIT), Washington’s de facto embassy on the self-ruled island, and the Taipei Economic and Cultural Representative Office in Washington (Tecro).

Using language that appeared to be directed at Beijing, the announcement said the agreement would address “significant distortions” caused by state-owned enterprises and harm caused by non-market practices and policies.

“The United States and Taiwan are market-oriented economies and understand the harm that can be caused by trade partners that deploy non-market policies and practices, which threaten livelihoods and can harm workers and businesses.

“The two sides will seek to adopt provisions that promote collaboration on ways to address these harmful non-market policies and practices,” it added.

The trade facilitation part of the new bilateral framework will include, among other things, fewer “border formalities”, “paperless trade and the submission of advance electronic data” and customs cooperation.

Taiwan’s top negotiator John Deng called for the first round of talks to be held in person next month to discuss such priority agendas as trade facilitation and small and medium enterprise business, and if possible he hoped it could be held in Taipei.

“Of course, it is up to the US side as they may have other thoughts,” Deng said at a news conference in Taipei on Thursday.

Deng said he singled out Beijing as the most guilty of economic coercion, saying Taiwan and the US would discuss this issue during the initiative talks, which he described as greatly beneficial to the island.

“Regarding economic coercion, everybody can tell China is the perpetrator. It not only uses coercion to [intimidate] Taiwan but also the US and many other countries, thus creating tremendous harm to the international economic order,” he said. “This is why the non-market practice agenda is included for discussion.”

Asked if it would be listed as a priority agenda in the inaugural talks, Deng said the two sides had a consensus to reach agreements on trade facilitation and small and medium enterprise issues as soon as possible, explaining why they would be put on the priority list. “But certainly, there will be more than just the two topics for discussion in the inaugural talks,” he said.

He noted that the initiative talks would help Taiwan straighten up related trade practices and statutes, paving the ground for the island to enter a future free trade agreement with the US.

In Beijing, Ministry of Commerce spokeswoman Shu Jueting said mainland China firmly opposed the US-Taiwan trade initiative.

“The Chinese side has always opposed any form of official exchanges between any country and the Taiwan region of China, including the negotiation and signing of any agreement of a sovereign or official nature,” Shu said.

“This concerns the overall situation of China-US relations and China-US economic and trade relations, as well as world peace, stability and prosperity. China will take all necessary measures to resolutely safeguard its sovereignty, security and development interests.”

The US announcement follows one of the most tense periods in Washington’s relations with Beijing, sparked by US House Speaker Nancy Pelosi’s visit to Taipei this month, a move that triggered a round of live-fire military drills by the People’s Liberation Army that nearly encircled the self-ruled island.

Beijing sees Taiwan as breakaway territory awaiting reunification and most countries, including the US, do not recognise the self-governed island as an independent state. Washington, however, opposes any attempt to take back the island by force.

The American and Taiwanese negotiators also have a mandate to coordinate on trade regulations, agriculture practices, anti-corruption tactics and digital trade facilitation, as well as standards on labour and the environment.

Deng said his office had worked with more than 20 government departments and agencies to adjust and prepare for talks with the US in the future.

“When the US administration is authorised to hold tariff talks with us, we would then be able to hold bilateral trade talks with the US,” he said.

He said the initiative talks were important because they would speed up adjustments and coordination between the two sides on trade practices and regulations, help promote Taiwan’s competitiveness, attract more foreign firms to invest in technology and other areas, improve the island’s economic image as protecting labourers and the environment and allow it to have more opportunities to join international trade organisations.

Taiwan’s foreign ministry applauded the decision for the two sides to hold the talks in coming months.

“This not only represents the strong desire and motivation of Taiwan and the US in deepening their economic and trade partnership but also starts a new page of Taiwan-US trade relations, which will set a new model for [Taiwan’s] economic and trade partnerships with others in the Indo-Pacific,” said Joanne Ou, the ministry’s spokeswoman.

Additional reporting by Orange Wang

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