As Taiwanese companies look to expand their operations and investments in the U.S., Taiwan’s Office of Trade Negotiations (OTN) has been seeking to support their efforts through close cooperation with the U.S. government to facilitate bilateral economic relations. The Office points to two significant events this year: resumption of high-level trade negotiations with the U.S. after a five-year hiatus and organization of the largest delegation to attend the 2021 SelectUSA Investment Summit in Washington, D.C.
The 11th Trade and Investment Framework Agreement (TIFA) Council meeting between Taiwan and the U.S. was held on June 30. The TIFA process is one of the major mechanisms through which the two sides discuss trade and investment-related issues, enhancing their longstanding and mutually beneficial economic relationship.
Minister without Portfolio and Chief Trade Representative of OTN John Deng expresses satisfaction with the outcomes of this year’s TIFA Council meeting. Although other channels are available to deal with trade-related issues, he notes, maintaining a formal platform on a consistent basis is of immense importance to the two governments – particularly following a change in administration.
“Of course, we keep a very close watch on all the major announcements and statements coming from the Biden administration, but we still need to talk face-to-face to understand their priorities,” says Deng.
Taiwan and the U.S. enjoy a solid trade relationship – the U.S. is Taiwan’s second-largest trade partner, while Taiwan is the U.S.’s ninth-largest. Deng emphasizes the excellent prospects for further strengthening of the bilateral relationship, given that the industrial structures of the two economies are complementary.
“We see many mutual investment opportunities for the U.S. and Taiwan,” he says. “TSMC and its suppliers setting up in the United States and the many U.S. multinational corporations coming to Taiwan to establish research operations are just two examples of how we help each other create jobs.”
Aside from semiconductors, OTN sees opportunities for future fruitful collaboration in the fields of electric vehicles, green energy, vaccines, and medical devices. Deng also stresses the hope that the TIFA process can provide momentum leading to a bilateral trade agreement. He notes that both the U.S. and Taiwan would have much to gain by strengthening their economic relationship through such an agreement, especially at this time of flux in the world trade regime.
Appearing on this year’s TIFA Council meeting agenda for the first time were discussions related to labor and environmental issues. OTN Deputy Trade Representative Jen-ni Yang, who co-led the June TIFA discussions with Assistant U.S. Trade Representative Terry McCartin, notes that a labor working group was added under the TIFA framework this year to enable progress to continue in between TIFA Council meetings. OTN hopes to later add an environmental working group.
The June meeting also presented an opportunity to confer about various challenges currently impacting world trade. Deng notes that a significant issue for both sides is how to increase the benefits of globalization while minimizing its undesirable effects.
“We need a secure and resilient supply chain, but what’s the best way to implement that?” he says. “We all understand that there’s no way a country can have everything it needs within its territory, but how do we cooperate? And when we’re facing shortages or emergencies, how can we help each other?”
Besides the TIFA Council meeting, the other major recent development in bilateral economic ties was Taiwan’s impressive participation in the SelectUSA Investment Summit, which was held virtually in June. By forming the largest delegation from a foreign market ever to attend the event, Taiwan signaled its intention to expand efforts to assist its companies in making appropriate investments in key markets such as the U.S.
SelectUSA serves to connect global companies with U.S. economic development organizations to facilitate foreign direct investment into the U.S. Minister Deng led the Taiwanese delegation of 220 representatives from 153 companies and worked closely with the American Institute in Taiwan (AIT) in preparation for the event.
“AIT worked very hard to communicate with our business community about what they could offer to the participants,” he says. “They organized their own Taiwan group activities in which high-ranking U.S. officials were able to hold exclusive talks with the participants from Taiwan – something that we were very happy to see.”
The Taiwan delegation to SelectUSA included robust representation from the semiconductor industry. The Taiwan Semiconductor Manufacturing Co. (TSMC), together with around 10 other semiconductor-related companies, have made plans to invest further in the U.S. in response to the current global shortage of IC chips.
“When TSMC invests in the U.S., it brings many of its suppliers,” says Deng. “Substantial investments are happening. We’ll continue to work with the U.S. government and if a need arises from a particular company, we are here to assist.”
In addition, Deng offered OTN’s support to AmCham member companies needing closer communications with Taiwan on bilateral issues. He noted that AmCham Taiwan has made significant contributions to U.S.-Taiwan economics relations, and said that a deeper engagement by AmCham members could help both governments solve trade issues and enhance the TIFA process.