Economist Derek Scissors is urging Taiwan to diversify its international investment portfolio and seek a bilateral investment treaty with the US.
Scissors, a research fellow with the Asian Studies Center at the Washington-based Heritage Foundation, says that the US and Taiwan have an extraordinarily intense trading relationship.
With a population of 23 million, Taiwan is the US’ ninth-largest trading partner. However, excluding the microstates, it is actually the US’ third-largest trading nation on a “per person” basis.
Addressing a panel discussion at the Center for National Policy, Scissors said that using the “per person” formula, the only countries ahead of Taiwan in US trade were Canada and Mexico, and the US has free-trade agreements (FTAs) with both of them.
The US-Taiwan trade relationship, he said, was “absolutely classic,” “mutually beneficial” and “very positive and healthy.”
However, Scissors said the stalled Trade and Investment Framework Agreement (TIFA) was a “waste of time” and unneeded.
He supported an FTA with Taiwan, but said the real barriers to such an agreement were US’ lack of interest and Taiwanese protectionism. Scissors said a major problem was that while Taiwan held about US$250 billion in US securities, Taiwan holds only US$4.5 billion in direct US investments, and this at a time when the return on bonds is very low.
“They may as well stick their money under the mattress,” Scissors said.
“Taiwan is much smaller as an investment partner than it is as a trade partner,” he added. “This is a real flaw in the economic relationship. If an FTA is unrealistic at this point, we should think about a bilateral investment treaty. Taiwanese direct investment in the US is far, far, too low. More investment in the US would bring the two economies closer together, would improve political ties and would diversify Taiwan away from the mainland. You want a diversified portfolio. This has nothing to do with politics.”
Taiwan could be making a big mistake by putting most of its investment capital into the Chinese basket, because the Chinese economy could stall.
Scissors said that the labor surplus upon which China relies could end, the environmental devastation of land could take a toll, return on capital could decline and China could continue suppressing innovation.
“Hooking Taiwan to China is going to look like a very bad thing by 2020,” he said.
On top of that, Scissors said, all of the ingredients are in play for “a big America-China economic blowup.”
US President Barack Obama’s administration, he said, was not committed to open trade and markets, Republican presidential candidates will be trying next year to make names for themselves any way they can, a Chinese political transition is coming soon and the US economy is stagnant.
Taiwan needs to plan for contingencies, he said.
TRAFFIC SAFETY RULES: A positive result in a drug test would result in a two-year license suspension for the driver and vehicle, and a fine of up to NT$180,000 The Ministry of Transportation and Communications is to authorize police to conduct roadside saliva tests by the end of the year to deter people from driving while under the influence of narcotics, it said yesterday. The ministry last month unveiled a draft of amended regulations governing traffic safety rules and penalties, which included provisions empowering police to conduct mandatory saliva tests on drivers. While currently rules authorize police to use oral fluid testing kits for signs of drug use, they do not establish penalties for noncompliance or operating procedures for officers to follow, the ministry said. The proposed changes to the regulations require
The Executive Yuan yesterday announced that registration for a one-time universal NT$10,000 cash handout to help people in Taiwan survive US tariffs and inflation would start on Nov. 5, with payouts available as early as Nov. 12. Who is eligible for the handout? Registered Taiwanese nationals are eligible, including those born in Taiwan before April 30 next year with a birth certificate. Non-registered nationals with residence permits, foreign permanent residents and foreign spouses of Taiwanese citizens with residence permits also qualify for the handouts. For people who meet the eligibility requirements, but passed away between yesterday and April 30 next year, surviving family members
Taipei, New Taipei City, Keelung and Taoyuan would issue a decision at 8pm on whether to cancel work and school tomorrow due to forecasted heavy rain, Keelung Mayor Hsieh Kuo-liang (謝國樑) said today. Hsieh told reporters that absent some pressing reason, the four northern cities would announce the decision jointly at 8pm. Keelung is expected to receive between 300mm and 490mm of rain in the period from 2pm today through 2pm tomorrow, Central Weather Administration data showed. Keelung City Government regulations stipulate that school and work can be canceled if rain totals in mountainous or low-elevation areas are forecast to exceed 350mm in
China Airlines Ltd (CAL) yesterday morning joined SkyTeam’s Aviation Challenge for the fourth time, operating a demonstration flight for “net zero carbon emissions” from Taiwan Taoyuan International Airport to Bangkok. The flight used sustainable aviation fuel (SAF) at a ratio of up to 40 percent, the highest proportion CAL has achieved to date, the nation’s largest carrier said. Since April, SAF has become available to Taiwanese international carriers at Taipei International Airport (Songshan airport), Kaohsiung International Airport and Taoyuan airport. In previous challenges, CAL operated “net zero carbon emission flights” to Singapore and Japan. At a ceremony at Taoyuan airport, China Airlines chief sustainability
RSS