Fri, May 24, 2002 - Page 17 News List

US-Taiwan pact needed for security

INTERNATIONAL TRADE A free-trade pact between Taiwan and the US, along with some other countries in the region, may help to keep China from using its growing clout as a weapon


With China's growing economic influence in Southeast Asia rattling nerves from Tokyo to Singapore, the establishment of a US-Taiwan free-trade area is becoming ever more important for the nation to retain its financial independence, according to an editorial in the Asian Wall Street Journal Wednesday.

Free trade with the US was high on President Chen Shui-bian's (陳水扁) agenda earlier this month, when he said that Taiwan should consider forming bilateral or multilateral free-trade agreements with Japan, Singapore and the US.

According to Chen, Taiwan needs to look into the possibility of entering free-trade agreements to reduce its over-dependence on China, a situation which could tip the political and economic equilibrium between the two sides of the Taiwan Strait. The president also said that signing such agreements would ensure stability in the Asia-Pacific region and peace across the Strait.

"Some politicians in Washington and Taipei now think a bilateral free-trade agreement is a way to improve Taiwan's bargaining position vis-a-vis [China]," the Journal said.

Last week the US took the first major step toward a possible free trade agreement (FTA) with Taiwan when an independent government agency in the US held a hearing in which witnesses said the political benefits for Taiwan would far outweigh any economic benefits from the deal.

The International Trade Commission, which recommends trade policy to the US administration, was told that US exports to Taiwan would soar if Washington negotiated an FTA with Taipei. It was also told that such an agreement would solidify ties between Taiwan and Midwest farm states, which would be among the main beneficiaries.

The hearing also exposed how such an agreement would enhance Taiwan's position in the global trading community.

With the tech market, once the crown jewel of Taiwan's economy, hit hard by regional competition, now is the ideal time for the US to boost trade with Taiwan, the Journal commentary said.

The article quotes Antonio Chiang (江春男), a member of Taiwan's national security council and former editor-in-chief of the Taipei Times, as saying, "Enactment of a US-Taiwan free-trade agreement is the most important move America can take to guarantee Taiwan's national security. While weapons sales are obviously important, the need for enhanced economic security becomes more urgent by the day."

Referring to rising Taiwanese investment in China, Chiang said, "Absorption of Taiwan's economy into that of China's makes us completely vulnerable -- and over time defenseless."

The report said that Taiwan's becoming economically dependent on China is a real possibility. Last year alone, Taiwanese businesses invested US$3.14 billion in China -- an increase of 33 percent from 2000 -- and signed commitments for another US$6.9 billion. Total trade between China and Taiwan last year was US$32.3 billion, with 85 percent of that being Taiwanese exports (23 percent of Taiwan's total exports).

Supporters of a new strategy for Taipei argue that a US-Taiwan trade zone gives Taiwan a safer route to increased prosperity than singularly increasing economic ties to its belligerent neighbor, the editroial said.

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