The Biden administration is launching trade and investment talks with Taiwan, advancing U.S. ties with Taipei and likely adding to frictions with the island’s nemesis, Beijing.
Secretary of State
told a House committee on Monday about the plans for trade talks. “We are engaged in conversations with Taiwan, or soon will be—on some kind of framework agreement,” Mr. Blinken said in response to a question from
Rep. Andy Barr
(R., Ky.) during the virtual hearing.
Mr. Blinken declined to elaborate and referred questions about details to
the U.S. trade representative, who wasn’t at the hearing. A spokesman for Ms. Tai’s office said that strengthening relations with Taiwan is important, though “we have no meetings to announce at this time.”
The latest effort would revive a dormant trade and investment framework, an arrangement that isn’t as comprehensive as the free-trade agreements that the U.S. has with Canada, Mexico and other top economic partners. Taiwan for years has sought closer engagement on economic issues, and in the past year the State Department has sponsored lower-level discussions on closer economic and business relations.
U.S. ties with Taiwan, a Cold War ally, are a lightning rod in the testy relations between Washington and Beijing, which sees Taiwan as a breakaway province and vows to use military force if needed to annex the island.
Asked about the trade talks with Taiwan, a spokesman for the Chinese Embassy in Washington said the U.S. should “stop all forms of official exchanges and contacts with Taiwan, stop elevating its relationship with the Taiwan region in any substantive way.” The spokesman urged Washington to adhere to decades-old agreements with Beijing, which commit the U.S. to maintaining only formal ties as a condition for formal relations with China.
As U.S. ties with China have deteriorated in the past two years, the Trump administration upped its engagement with Taiwan—and the Biden administration is carrying that forward. Last week, it rolled out vaccine distribution plans that will include Taiwan, and a trio of U.S. senators visited the island over the weekend to highlight vaccine cooperation.
“There is also disappointment [in Taiwan] that despite staunch support from both Democratic and Republican administrations in the areas of defense and diplomacy, there has been no progress on the trade front,” said
director of the Asia program at the German Marshall Fund of the U.S.
Taiwan is a major source of semiconductors for the U.S., which imported $7 billion last year in chips and $20 billion in other computer and telecommunications equipment out of $60 billion in total imports, double U.S. exports to the island, according to the Census Bureau.
The Biden administration has made securing supply chains of critical technologies a priority, especially given China’s prominence in manufacturing, and a new trade agreement could aid that effort and bolster Taiwan at a time it is under economic and other pressure from Beijing.
“We want to talk about supply-chain security and technology,” said Bi-Khim Hsiao, who serves as the de facto ambassador to the U.S. from Taiwan. “Getting talks back going as soon as possible is an important part of that.” She pointed to Beijing’s “economic coercion” in the region.
To try to spur talks last year with the Trump administration, Taiwan eased its ban on imports of American beef and pork, putting aside a long-running dispute over U.S. farmers’ use of a feed additive. Still, then U.S. Trade Representative
declined to launch trade talks with Taiwan, in part because he wanted to preserve a trade agreement with Beijing, according to people familiar with the matter.
Removing the ban was politically risky for Taiwanese President Tsai Ing-wen and her Democratic Progressive Party, which faced criticism from civil-society groups and local pig farmers. Taiwan is set to hold a referendum in late August on whether to oppose pork imports containing the additive, ractopamine, which has been shown to cause stiffness, lameness and death in animals. Polls show a majority of voters in favor of reimposing the restrictions.
The referendum isn’t legally binding but would put significant political pressure on Ms. Tsai, whose approval ratings have fallen amid a recent Covid-19 surge, power shortages and other setbacks, political analysts say.
“Ideally the Democratic Progressive Party wants to get something as soon as possible, to be able to show that this was all worth it,”
a visiting scholar at National Taiwan University.
The U.S. and Taiwan first signed the trade and investment framework agreement in 1994. Such agreements create the basis for recurring dialogue on trade issues, and sometimes lead to full-fledged free-trade agreements.
U.S. and Taiwan officials have met irregularly to hash out trade issues under the agreement, with 10 meetings in 27 years. The last session was held in October 2016.
“We hope trade and investment talks are a springboard,” said
president of the American Chamber of Commerce in Taiwan. The U.S. and Taiwan have a range of issues to collaborate on from cybersecurity to export controls and technology transfers, he said, adding that a date for trade talks is “way overdue.”
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