The Importance of a U.S.-Taiwan Bilateral Trade Agreement

In a commentary for The National Bureau of Asian Research, US-Taiwan Business Council Vice President Lotta Danielsson argues that the signing of a high-standards and comprehensive bilateral U.S.-Taiwan trade agreement would have positive political implications and help improve Taiwan’s regional economic integration.

A BTA between the United States and Taiwan has strong merit. Taiwan would make for an excellent trade agreement partner for the United States, given that the island already has well-established environmental protection, labor, and intellectual property rights laws—common issues of concern for the United States in evaluating its economic partners. It would be mutually beneficial economically, potentially offering expanded market access for U.S. companies in sectors such as agriculture, telecommunications, finance, and energy.


Negotiations for a BTA would also give the United States an opportunity to address some of the outstanding trade policy issues that the USTR identifies in its annual National Trade Estimate Report on Foreign Trade Barriers. Such issues include Taiwan’s regulations on imports of pharmaceuticals and medical devices; digital trade; issues surrounding labeling, regulations, and transparency; and other nontariff trade barriers. In addition, such a deal is likely to bind Taiwan more tightly to the U.S. supply chain—particularly in technology—and could offer a template for the United States to sign additional trade deals in the Indo-Pacific.

The current prospects for a U.S.-Taiwan trade agreement are uncertain, primarily due to the changes underway in the United States during the transition period before the inauguration of President-elect Joe Biden. Biden has said that he will wait to make drastic changes to existing tariffs, and that he will not negotiate any new trade deals right away once he takes office. Instead, he intends to focus on domestic policy. However, the foreign policy communities in both the United States and Taiwan are optimistic that under the Biden administration the United States will still be a good faith interlocutor with Taiwan. There is no reason that good relations cannot continue, given that Taiwan remains a steadfast U.S. partner both economically and politically.


A new round of TIFA talks is likely to take place before any real progress is made on negotiating a U.S.-Taiwan BTA. However, neither the Taiwan government nor those in the United States who support a full bilateral trade deal should settle for progress on parochial trade issues made under the auspices of the TIFA. While any and all movements forward on trade issues are to be applauded, the real prize is the signing of a high-standards and comprehensive bilateral agreement that can solidify the trade relationship into the future.

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