Conservative leaders are asking President Donald Trump to establish a free trade agreement with Taiwan that they say would bolster America’s interests.
Calling Taiwan “a model trade partner,” the conservative leaders write in a letter addressed to the president, “The idea of a U.S.-Taiwan free trade agreement has been blocked for decades by Washington’s concern for Beijing’s sensitivities. The most encouraging thing about your administration is its tendency to look past the way business has been done in the past and take a fresh approach when the U.S. stands to gain.”
“The veto power Beijing has exercised over this issue in administration past should be revoked,” they add. “Nothing about a free trade agreement with Taiwan is incompatible with serviceable, productive relations with China.”
The letter, which was released Wednesday, has nine signatories: Lisa B. Nelson, CEO of the American Legislative Exchange Council; Adam Brandon, president of FreedomWorks; Jessica Anderson, executive director of Heritage Action for America; Kent Lassman, president and CEO of the Competitive Enterprise Institute; Karen Kerrigan, president and CEO of the Small Business and Entrepreneurship Council; Pete Sepp, president of the National Taxpayers Union; David Williams, president of the Taxpayers Protection Alliance; Andrew F. Quinlan, president of the Center for Freedom and Prosperity; and Lorenzo Montanari, vice president of international affairs at Americans for Tax Reform.
According to The Heritage Foundation’s 2020 Index of Economic Freedom, Taiwan is the 11th freest economy in the world.
“Taiwan is ranked 5th among 42 countries in the Asia-Pacific region, and its overall score is well above the regional and world averages,” notes the index. “The Taiwanese economy has been rated mostly free for a decade. [Gross Domestic Product] growth over the past five years has been steady.”
Taiwan receives high marks for its property rights, amount of government spending, and business freedom.
The letter highlights the current U.S.-Taiwan trade relationship.
“Taiwan is America’s 14th leading export market for goods,” the conservative leaders write, adding:
For agricultural products, it is No. 8. The U.S. and Taiwan offer one another attractive opportunities in investment and services as well. Taiwan has more than $8 billion invested in the U.S., much of which is in manufacturing. And whereas the U.S. runs a trade deficit with Taiwan in goods, it runs a surplus in services.
>>> Here is the text of the full letter, which was released April 8:
Dear Mr. President:
We are writing to encourage you to initiate negotiations on a free trade agreement (FTA) with the Republic of China (Taiwan). Such an agreement would further several critical American interests.
First, it would tap into an important market for American exporters. Taiwan is America’s 14th leading export market for goods. For agricultural products, it is number eight. The U.S. and Taiwan offer one another attractive opportunities in investment and services as well. Taiwan has more than $8 billion invested in the U.S., much of which is in manufacturing. And whereas the U.S. runs a trade deficit with Taiwan in goods, it runs a surplus in services.
Second, the U.S needs a new free trade partner in the Indo-Pacific. There are dozens of trade tie ups in the region that exclude the U.S. The most significant of these are the 11-member Comprehensive and Progressive Agreement for Transpacific Partnership (CPTPP), the pending 15-member Regional Comprehensive Economic Partnership, and the E.U.-Japan Economic Partnership Agreement.
Efforts to right trade relationships can be important, as the administration has undertaken to do with KORUS, the U.S.-Japan Trade Agreement, and the Phase One trade agreement with China. But to date, there have been no attempts by the administration to reach new, encompassing agreements, even on a bilateral basis, to help anchor the U.S. economic position in the region.
Third, Taiwan is a model trade partner. According to The Heritage Foundation’s Index of Economic Freedom, Taiwan is the 11th freest economy in the world. That incorporates a range of factors from rule of law and government transparency to investment regulations and tax burden. In the area of trade, Taiwan’s average trade weighted tariff is 2% — lower than our own.
Taiwan’s tariffs are higher on some products, like agriculture (9.1%). And as with every country in the world, there remain in Taiwan other barriers to foreign trade and investment. But this is exactly why we need a FTA, to break down these restrictions to the benefit of American businesses, workers, and consumers. In fact, on some of the most difficult issues for Taiwan – regulations on imports pork and beef – it may be ready to move forward unilaterally. Indication from Washington that this would facilitate entering into negotiations of a broader agreement would help move Taiwan along in its decision making process and remove a long-standing obstacle to a closer economic relationship.
The idea of a U.S.-Taiwan FTA has been blocked for decades by Washington’s concern for Beijing’s sensitivities. The most encouraging thing about your administration is its tendency to look past the way business has been done in the past and take a fresh approach when the U.S. stands to gain. The veto power Beijing has exercised over this issue in administrations past should be revoked. Nothing about an FTA with Taiwan is incompatible with serviceable, productive relations with China.
Thank you for your consideration.
Jessica Anderson, Executive Director, Heritage Action for America
Kent Lassman, President and CEO, Competitive Enterprise Institute
Lisa B. Nelson, CEO, American Legislative Exchange Council
Adam Brandon, President, FreedomWorks
Karen Kerrigan, President and CEO, SBE Council
Pete Sepp, President, National Taxpayers Union
David Williams, President, Taxpayer Protection Alliance
Andrew F. Quinlan, President, Center for Freedom and Prosperity
Lorenzo Montanari, Vice President, International Affairs, Americans for Tax Reform