The German Marshall Fund: Four Steps to Improve the Chances of a US-Taiwan Free Trade Agreement (FTA)

Port of Kaohsiung

On May 31, 2022, The German Marshall Fund of the United States published a series of policy papers edited by Bonnie Glaser titled, “Next-generation Perspectives on Taiwan.” The first policy paper, written by Tori K. Smith, is called “Four Steps to Improve the Chances of a US-Taiwan Free Trade Agreement.” The paper proposes ways to successfully achieve a US-Taiwan Free Trade Agreement/Bilateral Trade Agreement.

A free trade agreement between the United States and Taiwan would have positive economic effects for both countries. Total trade would increase by $6.2 billion annually for the United States and by $3.8 billion annually for Taiwan.The increase in trade for both countries would also have a positive impact on economic growth. US GDP would increase by $246 million, and Taiwan’s GDP would increase by $641 million. Notably, an FTA with Taiwan would likely impact trade with China. Under the Heritage Foundation model, US exports to China would decrease in nearly all sectors, China’s total trade volume would decrease by just over $1 billion annually, and China’s GDP would be negatively impacted.


It is time to stack the deck in favor of a free trade agreement with Taiwan instead of against it. The American and Taiwanese people will benefit from deeper economic engagement through an FTA. To create the best environment for one, Congress and the administration should recognize the economic benefit of such an agreement, dispel the myths that a traditional FTA between the two governments is not possible, move Taiwan to the proper office at the USTR, and consider a TPA bill that is tailored specifically for a US-Taiwan free trade agreement.

Quote from Tori K. Smith

The US-Taiwan Bilateral Trade Agreement Coalition welcomes this support for a BTA with Taiwan.

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