Testimony:
Office of the United States Trade Representative (USTR)

Comments Regarding the U.S.-Taiwan Initiative on 21st-Century Trade

(Arlington, Virginia, July 8, 2022)

Written Testimony. See attachment for full text, including supporting charts.

Introduction

On June 1, 2022, the United States and Taiwan launched the U.S.-Taiwan Initiative on 21st-Century Trade, intended to develop tangible ways to deepen the bilateral trade relationship. It is our understanding that this will not be a free trade agreement, and the initiative will not address tariff barriers. The two sides, represented by the American Institute in Taiwan (AIT) on the U.S. side and the Taipei Economic & Cultural Representative Office (TECRO) on the Taiwan side, are developing a roadmap for negotiations on agreements in several specified trade areas:

• – Trade facilitation
• – Regulatory practices
• – Agriculture
• – Anti-corruption
• – Supporting SMEs in trade
• – Harnessing the benefits of digital trade
• – Promoting worker-centric trade
• – Supporting the environment and climate action
• – Standards
• – State-owned enterprises
• – Non-market policies and practices

The Office of the United States Trade Representative (USTR) will lead the U.S. side of the discussion. On June 7, 2022, USTR announced in the Federal Register (#2022-12248) that it is seeking public comments on relevant matters, including U.S. interests and priorities, in order to develop their negotiating objectives and positions.

The US-Taiwan Business Council, formed in 1976, is a non-profit, membership-based organization dedicated to developing the trade and business relationship between the United States and Taiwan. Members consist primarily of public and private U.S. companies with business interests in Taiwan, and range in size from small consulting firms to large multinational corporations. The organization aspires to be an effective representative for those members in dealing with business, trade, and investment matters between the United States and Taiwan.

Since its inception, the Council has worked with our members and with the U.S. and Taiwan governments to support the bilateral trade and commercial relationship. We have solicited feedback from our member companies on the priorities that they would like to see addressed as part of this initiative, and that feedback is summarized in the below narrative.

The Council appreciates this opportunity to submit our comments to USTR as part of the preparatory stage for negotiations under the U.S.-Taiwan Initiative on 21st-Century Trade.

Priorities for U.S. Businesses

Our members are encouraged that the U.S. government appears willing to demonstrate their commitment to expanding and deepening the trade and commercial relationship with Taiwan. In examining the many facets of the relationship that this new initiative plans to cover, as enumerated above, companies zeroed in on a few key components that they see as priorities to be addressed during negotiations.

This section of the testimony covers several priority areas, including a Digital Economy Agreement, regulatory practices and standards, a Semiconductor Supply Chain Agreement, and a Double Taxation Agreement. Please see the attachment for the full text.

Conclusions

The US-Taiwan Business Council and our members are heartened by the U.S. government’s focus on this new trade initiative, and hope that it will be indeed lead to expanding and deepening the U.S.-Taiwan trade relationship. On June 27, 2022, Deputy United States Trade Representative Sarah Bianchi and Taiwan Minister Without-Portfolio John Deng held their inaugural meeting as part of this initiative, and it is encouraging to us that the work to further the bilateral trade relationship has already begun.

However, the Council also believes that Taiwan should additionally be a key target for exploring further bilateral trade deals – including negotiating and signing a comprehensive Bilateral Trade Agreement (BTA). The agenda for this initiative also overlaps with many areas covered by the Indo-Pacific Economic Framework (IPEF). We would like to see Taiwan on a path to be included in IPEF, where Taiwan’s inclusion could serve as a representation of the sustained U.S. commitment to Taiwan and to all our existing partners in the region.

The Council would be happy to discuss in further detail any of the issues raised above, and are happy to work with USTR to clarify any questions. Thank you once again for this opportunity to submit our comments.