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US, Taiwan talks raise hopes for free-trade pact, analysts say

South China Morning Post | 17 January 2023

US, Taiwan talks raise hopes for free-trade pact, analysts say

by Lawrence Chung

  • Four-day meeting being held in Taipei under new initiative, as Washington deepens engagement with the island
  • There are ‘bigger chances’ agreement can be reached in four areas of focus for Taiwan, according to observer

Talks under way in Taipei between Taiwanese and US officials could pave the way for the two sides to sign a free-trade agreement, according to analysts.

The four-day meeting runs until Tuesday and is being held under the new US-Taiwan Initiative on 21st-Century Trade – launched in June – as Washington deepens its engagement with the self-ruled island to counter Beijing.

Terry McCartin, assistant US trade representative for China affairs, is leading a delegation of more than 20 trade officials at the talks with his Taiwanese counterpart, Yang Jen-ni, deputy trade representative of the island’s Office of Trade Negotiations, and her team.

“Among the 11 areas of negotiation, we will continue to focus on trade facilitation, the promotion of small and medium enterprises, good regulatory practices, and anti-corruption measures,” Taiwan’s top trade negotiator John Deng told reporters at the start of the talks on Saturday.

He said the island was hoping for some positive results in those four focus points.
Other areas being discussed are agriculture, standards, digital trade, labour, the environment, state-owned enterprises, and non-market policies and practices. The initiative does not cover tariff reductions.

“Our goal is to reach some high-standard and economically meaningful agreements before the US is to host the Asia-Pacific Economic Cooperation summit in [November] 2023,” he said, apparently referring to a bilateral or free-trade pact with the US.

The potential deal has angered Beijing, which sees Taiwan as part of its territory and opposes any move to sign official trade pacts with the island. It has urged the US – which does not have formal diplomatic relations with Taipei – to follow the one-China principle and accused Washington of “playing the Taiwan card”, which it said would endanger China-US ties.

Roy Lee Chun, senior deputy executive director at the Chung-Hua Institution for Economic Research’s Taiwan WTO & RTA Centre in Taipei, said there were “bigger chances” agreement could be reached on the four trade areas.

“The two sides have discussed the four areas and already had a certain consensus in their last round of talks,” he said. “If things go smoothly, they could possibly conclude their talks in November.”

Lee said the second round of in-person talks being held in Taipei reflected the ever-closer relations between the US and Taiwan. He also said that with the Republicans now in control of the House of Representatives it was unlikely President Joe Biden’s government would soften its stand on Beijing.

The two sides held their first face-to-face talks in New York in November, when McCartin and Yang were also the chief negotiators.

The US delegation in Taipei is the largest to have visited the island since 2002, as Washington seeks to reduce economic reliance on Beijing.

Li Da-jung, a professor of international relations and strategic studies at Tamkang University in New Taipei City, said the talks were a response from Washington to the island’s exclusion from the US-launched Indo-Pacific Economic Framework.

“Though Taiwan was excluded, the US quickly came up with the trade initiative, which serves to enhance bilateral ties and institutionalise their trade talks,” Li said.

He noted that Taiwanese President Tsai Ing-wen had repeatedly called for a bilateral or free-trade agreement with the US.

“The initiative talks naturally bring hope for such a deal, and this could end up being part of Tsai’s legacy when her final term ends in May 2024,” Li said, adding that unprecedented close ties with the US would be her main legacy.

 Fuente: South China Morning Post