Let’s Push for the TIFA Talks to Resume with Taiwan
Moving closer to the US helps shore up its support, delink Taiwan from China
Now is the time to take advantage of the mood in Washington. Earlier this year the US, Canada, and Mexico renegotiated the North American Free Trade Agreement (NAFTA). The agreement contained a change crucial for Taiwan’s interests: a clause aimed directly at China.
China’s hopes of negotiating a free trade pact with Canada or Mexico were dealt a sharp setback by a provision deep in the new U.S.-Mexico-Canada trade agreement that aims to forbid such deals with “non-market” countries, trade experts said on Tuesday.
This move signals that the US is viewing its global trade policies with China in mind. Given this, there has never been a better time to push the US into TIFA talks again.
In 1994, the US and Taiwan signed the Trade and Investment Framework Agreement (TIFA). TIFAs exist to stimulate trade between the two parties and to provide for dispute resolutions. The US has them with many nations and several multilateral organizations, such as ASEAN. TIFA is a key foundation for trade with the US, and an important step towards a free trade agreement with that giant economy.
The first TIFA talks between Washington and Taipei were held in 1995, and talks have continued annually ever since, except for the five year span of 2008–2012 when the spat over beef imports from the US brought them to a halt. This appears to have been part of the foreign policy strategy of then KMT President Ma Ying-jeou, which involved irritating relations with key allies of Taiwan to reduce their support for the island. Ma was also preserving the KMT’s rural votes by protecting Taiwan’s pork producers from US exports of beef containing Ractopamine, which could eventually lead to importation of pork containing Ractopamine, a key goal of US pork producers.
TIFA talks between Taiwan and the US were suspended in 2017 because they are traditionally conducted by the two sides’ deputy economic/trade ministers. However, the Trump Administration did not appoint a deputy trade representative until March of 2018. Taipei began negotiating for re-opening talks at that point, but none have been held to date.
A Free Trade Agreement would further help Taiwan orient its economy away from China’s, and increase US support for the island.
Supporters of Taiwan in the US should start pushing the US government to resume these talks. First, TIFA, in and of itself good, can lead to a free trade agreement with the US. Such an agreement would further help Taiwan orient its economy away from China’s, and increase US support for the island, at present Washington’s 11th largest trading partner. The inclusion of an anti-China clause in NAFTA should be advantageous to Taipei in positioning itself as the China alternative.
The US should also be encouraged to upgrade this relationship with Taiwan by sending, not the deputy trade representative, but the ranking trade representative. Taiwan should be asking this in light of the Taiwan Travel Act, which encourages the US to send high ranking officials to Taiwan. Here is an opportunity to make that legislation really work for Taiwan.
Taiwan also needs to start making concessions to the US. Beef might garner the most publicity, but US wood producers have been trying to break into the market for two decades. At present landowners can build homes made of imported wood, but the fire department will not certify them, meaning that they cannot purchase fire insurance. This kind of trade barrier needs to be lifted. Not only would it give home builders a wider range of choices, it would also be useful in reducing the destruction of rivers in Taiwan for gravel, and in reducing Taiwan’s imports of gravel from SE Asia.
Want TIFA talks toward an eventual free trade agreement? The time to act is now.
Click here to ask your Representative to support H.Res. 271 Expressing the sense of the House of Representatives that the United States Trade Representative should commence negotiations to enter into a bilateral trade agreement with Taiwan.
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