AFX News Limited
US considers investment agreement with Taiwan
12 July 2007
WASHINGTON (XFN-ASIA) - The United States said it is considering forging a bilateral investment agreement with Taiwan but ruled out a free trade pact in the immediate future.
The two sides raised the possibility of an investment accord during annual talks under a Trade and Investment Framework Agreement, which usually precedes a free trade pact.
’Both sides agreed to intensify discussions of possible concrete steps to deepen bilateral cooperation in the investment area, including the possibility of a bilateral investment agreement,’ said deputy US Trade Representative Karan Bhatia.
’Basically, it would commit both sides to a high standard of investment protection,’ he told reporters.
Taiwan has been seeking a free trade pact with the US, its key investor, trading partner and top arms provider. Annual US-Taiwan trade is valued at about 60 bln usd.
Resolutions have been adopted in the US Congress and at least 39 of 50 US state legislatures support an FTA with Taiwan, but the US administration and business community are reluctant to pursue it with vigor due to concerns over the likely adverse reaction from Beijing.
Washington switched diplomatic recognition from Taiwan to China in 1979.
Bhatia said an FTA prospect with Taiwan did not arise because the administration of President George W. Bush had lost its nearly five-year-old Trade Promotion Authority (TPA), known as ’fast-track’ on June 30.
’In the absence of TPA, any discussion of FTA will be premature,’ he said.
Under the TPA, the administration negotiated trade agreements that could only be approved or rejected by the legislature, but not amended.