logo logo

US House approves Taiwan trade deal, demands future oversight

South China Morning Post - 22 June 2023

US House approves Taiwan trade deal, demands future oversight
By Bochen Han

  • Lawmakers reassert their authority over trade policy in demanding they be consulted on upcoming negotiations with Taipei
  • Congress has increasingly signalled its desire for the US to step up economic engagement with Taiwan

The US House of Representatives on Wednesday voted to approve the first agreement signed under the US-Taiwan Initiative on 21st Century Trade and to require congressional consultation for future negotiations.

The agreement, signed on June 1 under a framework for bilateral talks launched last year, covers streamlining customs procedures, combating corruption and helping small businesses navigate regulatory procedures in both markets. It broadly aims to strengthen the US-Taiwan trade and economic relationship, but does not include any market access provisions.

Observers say the bill, which passed by voice vote and now moves to the Senate, is as much about asserting congressional authority over trade policy as it is about showing support for enhanced economic engagement with Taiwan.

While the administration has the authority to negotiate such agreements if they don’t require a change to US law, the political balance between executive decision-making and congressional oversight “is out of whack”, said Clete Willems, a partner at the Washington-based law firm Akin Gump Strauss Hauer & Feld.

Willems said Wednesday’s bill helped fill a void left by the expiration of trade promotion authority laws that guided the administration in negotiating deals. The Biden administration has not asked Congress for such authority, which is required to negotiate trade agreements with market access components.

The legislation was announced earlier this month by bipartisan leaders in the Senate Finance Committee and the House Ways and Means Committee.

Representative Jason Smith, the sponsor of the House bill and chairman of the Ways and Means Committee, said Wednesday: “The relationship between the United States and Taiwan is vital to US interest in the Indo-Pacific.”

“This initial trade agreement negotiated by the Biden administration is a good shows the world the Chinese Communist Party will not intimidate the United States from deepening our relationship with Taiwan,” he said.

“Congress is sending a bipartisan message to President [Joe] Biden today that we will not sit idly by as the administration ignores our constitutional role in developing US trade policy,” added Smith, a Republican from Missouri.

The bill requires the Office of the US Trade Representative to show any future negotiating texts under the initiative to Congress before sharing with Taiwan or any parties outside the executive branch; provide daily briefings to Congress during negotiating rounds; and share any texts drafted by Taiwan within three days.

t also requires that future agreements not take effect unless the US president makes the text publicly available 60 days before entering into the deal and a bill approving it is enacted into law.

Rupert Hammond-Chambers, president of the US-Taiwan Business Council, said the agreement showed that there was “incremental ambition” for greater trade engagement with Taiwan.

“It creates some momentum, it creates more ambition,” he said, noting the difference between the Biden administration and the “hostility” to trade agreements with Taiwan displayed under president Donald Trump.

But as ambition continues to expand and more voices enter the fray, Hammond-Chambers said it would become harder for the two sides to conduct engagement through executive action.

“In the absence of a broader consensus on trade and the hostility to free trade agreements in many quarters of the United States, navigating a robust aspirational trade policy toward Taiwan will become more complex,” he said.

While the desire for a comprehensive free trade agreement may be mixed, Congress has increasingly signalled its desire for the US to step up economic engagement with Taiwan.

Both chambers are currently considering a bill authorising the administration to negotiate a tax agreement with Taipei that would offer residents in the US and Taiwan relief from double taxation.

 source: South China Morning Post