Taiwan and the US are likely to move toward negotiating a bilateral trade agreement (BTA) after Taipei announced that it would ease restrictions on imports of pork and beef from the US, economists said.
President Tsai Ing-wen (蔡英文) on Friday announced that the government would allow imports of pork containing the controversial feed additive ractopamine and beef from cattle older than 30 months.
Those concessions have eliminated some of the main barriers the US has cited as impeding the possibility of closer trade ties, government officials said.
Deputy Minister of Economic Affairs Chen Chern-chyi (陳正祺) on Friday said that opening up Taiwan’s market to imported pork with traces of ractopamine and beef from older cattle would be “very beneficial” regarding Taiwan’s intentions to establish a BTA with the US.
US officials, including Vice President Mike Pence and Secretary of State Mike Pompeo, welcomed Taiwan’s plan to allow pork with ractopamine, which is expected to take effect on Jan. 1 next year.
Their responses reflected a tacit agreement between Taiwan and the US, signaling that bilateral trade relations could progress further in the near future, Lee Chun (李淳), deputy director of the Taiwan World Trade Organization and Regional Trade Agreements Center at the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院), said on Saturday.
It would come as no surprise if the US were to announce a plan to begin negotiations on a BTA with Taiwan, Lee said.
In May, the US became Taiwan’s second-largest export market for the first time in 11 years, and because of improved trade ties, particularly in the semiconductor and 5G industries, Lee said that bilateral ties could be boosted.
Lee said if a trade deal were to be signed, Taiwanese businesses would benefit from zero or preferential tariffs on exports to the US.
The machinery sector could be one of the beneficiaries, he said.
Taiwanese machine makers have already seen exports to the US increase as demand has grown because of Washington’s push to bring manufacturing back to the US, he said, adding that being able to ship machines duty-free would give local exporters an additional edge in the market.
A trade deal could also provide additional protection to Taiwanese investment and would be conducive to establishing regular, systematic dialogue between Taiwan and the US, Lee said.
CIER vice president Wang Jiann-chyuan (王健全) said that signing a trade pact with the US would be of great importance to Taiwan’s export-oriented economy.
It would benefit all industries that export products to the US market, including the steel, petrochemical, textile and consumer product sectors, and might even make other countries more willing to sign trade pacts with Taiwan, Wang said.
Darson Chiu (邱達生), an analyst at the Taiwan Institute of Economic Research (台灣經濟研究院), said that after signing a BTA with the US, Taiwan would have a better chance of participating in multilateral trade pacts, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
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