Mon May 22, 2006

US eyes closer trade ties with Taiwan, but no pact

By Doug Palmer

WASHINGTON (Reuters) - The United States has no immediate plans to negotiate a free trade pact with Taiwan, but is eager to discuss other ways to expand economic ties, a top U.S. trade official told reporters on Monday.

"Let me just stress, people who hold out this FTA (free trade agreement) idea forget there’s a tremendous amount that can be done to strengthen and deepen investment relations without ... an FTA and we want to do that," deputy U.S. Trade Representative Karan Bhatia said before a trip beginning this week to Taiwan, India and Vietnam.

Taiwan has pressed for years to begin talks with the United States on a free trade agreement, only to see other Asian countries such as Singapore, Thailand, South Korea and Malaysia get that opportunity first.

Bhatia, who the U.S. Trade Representative’s office said is the most senior U.S. official to visit Taiwan in six years, did not respond directly when asked if Chinese objections to a U.S.-Taiwan free trade deal would make Washington pause.

He said the issue was "hypothetical" because the United States and Taiwan were far from beginning free trade talks.

Beijing considers Taiwan a rebel province and could react negatively to U.S. free trade agreement with Taipei.

"China obviously remains a critically important trading partner for us in the area and we want to strengthen our trade relations there as well. We believe that strong trade and economic relations with China on the one hand and with Taiwan on the other are not mutually exclusive," Bhatia said.

He told reporters Taipei needed to make more progress in areas ranging from agriculture to intellectual property rights protection before the two sides could begin free trade talks.

"We have a strong trade and investment relationship with Taiwan right now and we’re looking to grow and deepen that relationship," Bhatia said.

But U.S. trade negotiators already have their "hands full" negotiating free trade deals with other countries and it is unlikely the United States could start talks with Taiwan before trade promotion authority expires next year, Bhatia said, referring to legislation that lets the White House negotiate trade deals Congress is unable to change.