After Lai Ching-te of the Democratic Progressive Party won Taiwan’s presidential election, the US should strengthen its ties with the island nation. By voting, Taiwanese people expressed democratic values and a desire to minimize economic dependence on China. To fight the PRC’s economic coercion, a comprehensive US-Taiwan Free Trade Agreement (FTA) is proposed to diversify trade, strengthen supply networks, and protect Taiwan’s economy.
Photo from: Reuters
Election Influence and Economic Dependence
The PRC’s trade restrictions to influence Taiwan’s election show the weakness of economic dependence. Over one-third of Taiwan’s exports go to mainland China and Hong Kong. Thus, financial pressure must be avoided. An FTA between the US and Taiwan is a strategic move to reduce dependence and boost economic resilience.
Military support is essential, but Taiwan’s defense requires economic strength. The US must consider economic issues like embargoes because a PRC invasion may go beyond military action. A US-Taiwan FTA is important in a broader strategy to protect Taiwan from pressure.
A US-Taiwan FTA has many advantages. It diversifies commerce from China to the US by lowering tariffs, encouraging cross-border investment, and matching regulations. The program shows the world that the US supports Taiwan’s global integration and urges others to do so. Taiwan wants reliable supply networks and trade agreements that diversify.
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US Economic Opportunities and Interests
Besides protecting Taiwan’s interests, an FTA benefits the US economically. US farmers benefit from Taiwanese market opening, especially in agriculture. The pact could boost digital trade, financial services exports, and crucial technology supply chains. Comprehensive FTAs are strategic due to their economic benefits.
A complete FTA has been hampered by historical reluctance, primarily due to fears about disturbing US-China ties, notwithstanding limited negotiations and legislative considerations. The article argues that changing times and a recalibrated US-China trade relationship require reassessing Taiwan’s commercial relationships. The call to action prioritizes a comprehensive US-Taiwan FTA over partial measures.
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