Taiwan and the United States reached a new milestone in their bilateral relationship in June when the parties unveiled the U.S.-Taiwan Initiative on 21st-Century Trade, with the ultimate aim of reaching a trade agreement.

Through the Initiative, the parties plan to develop concrete ways to deepen their economic and trade ties, advance mutual trade priorities, and promote innovation and inclusive economic growth. The ultimate aim is to reach an agreement based on shared values that benefits workers and businesses.

The ongoing trade talks were launched in response to Taiwan’s and the United States’ impressive acceleration of economic exchange since the signing of the Trade and Investment Framework Agreement in 1994. Thanks to Taiwan’s hard efforts to remove trade irritants and demonstrate its willingness to deepen economic ties, its imports from the U.S. in the last five years grew by 44%, while exports nearly doubled.

“For the past few years, Taiwan has shown its determination and capability to follow free trade principles, and the United States has taken notice,” says John Deng, minister without portfolio and Taiwan’s top trade negotiator. “The U.S. also knows that the current international rules are inadequate to solve our trade issues, so we agreed to begin with a list of pressing topics to discuss.”

The Office of Trade Negotiations (OTN), of which Deng is the Chief Trade Representative, will represent Taiwan in the ongoing negotiations. The two sides will cover trade facilitation, good regulatory practices, anti-corruption, SMEs, agriculture, standards, digital trade, labor, environment, state-owned enterprises, and nonmarket policies and practices.

“This is the first time that we are talking about a systemic arrangement and exploring such a wide range of topics,” says Deng. “The hope is that once an agreement is reached, we will have a platform where Taiwanese agencies can better cooperate and coordinate with their American counterparts.” For example, Deng cites trade facilitations that could enable customs agencies to solve issues more efficiently through direct connections.

A shared value between the U.S. and Taiwan that will be highlighted during the negotiations is the protection of workers’ rights. While Taiwan’s labor principles are robust, OTN aims to draw from existing mechanisms within trade deals – such as the USMCA between the U.S., Mexico, and Canada – to further improve labor protection standards. These existing agreements also provide a framework for other key issues.

“It’s important for us to support the alignment of Taiwanese companies with international standards, particularly in areas like digitalization, carbon emissions, and labor issues,” says Deputy Trade Representative Yang Jen-ni, who in November led the Taiwanese delegation during the first round of negotiations in New York.

“Taiwan has been isolated from many international economic platforms,” she adds. “This initiative lets us increase our connectivity with the world, creating more innovative and lucrative opportunities, especially for small- and medium-sized enterprises.”

For the Initiative to reach its full potential, Deng stresses the importance of collaboration with private sector actors. OTN has engaged with several domestic trade associations in preparation for the trade talks and will continue to hold regular meetings with the private sector to incorporate business perspectives.

“We must be more open, transparent, and willing to accept the views of the private sector,” says Deng. “This will require some adjustments for bureaucrats, but it will help our democracy continue to improve. We’ll be able to demonstrate to the international community that Taiwan has a trade regime that follows international trends. We protect the environment and workers, and we have a transparent government that takes strong measures to prevent corruption.”

Minister Deng has personally been working in the bilateral trade arena for his entire career, and the significance of the US-Taiwan Initiative is not lost on his office. This will be the first true Trade Agreement between the U.S. and Taiwan during his influential career – a development he’s “been waiting 30 years for.”

“This is the first time the U.S. and Taiwan have held talks of this scale since our World Trade Organization accession efforts two decades ago,” says Deng. “We’re very enthusiastic and hope to produce results that give the business community confidence in Taiwan.”