The first Taiwan-US Economic Prosperity Partnership (EPP) Dialogue was on Friday held virtually and in person in Washington, and it covered a broad range of issues including the US’ Clean Network program, supply chain cooperation, science and technology cooperation, infrastructure development, energy, investment review, global health and security, and women’s economic empowerment.
After a six-hour discussion, the talks on technology cooperation concluded with the most concrete outcome as both sides identified the semiconductor industry as the top priority.
The EPP Dialogue reflects both sides’ commitment to expanding cooperation and deepening their already close friendship, and represents another milestone in Taiwan-US relations.
The US in May became Taiwan’s second-largest export market for the first time in 11 years, and city officials in Phoenix, Arizona, on Wednesday approved a slew of financial incentives and government support for Taiwan Semiconductor Manufacturing Co’s (TSMC) planned US$12 billion chip plant, its first advanced manufacturing facility in the US. The plan for the 5-nanometer fab has prompted some TSMC suppliers to consider following suit.
US lawmakers have been taking measures to boost domestic high-tech manufacturing and address national security concerns over the industry supply chain, including in June proposing billions of US dollars in subsidies. The improved trade and business ties, particularly in the semiconductor and 5G industries, are expected to boost relations between Taiwan and the US.
Taiwanese companies are paying great attention to the implementation of supply chain cooperation in the semiconductor industry between the two nations and are looking forward to this partnership expanding to 5G, electric vehicles, as well as medical, energy and other technology segments. Even though the local business community expects the EPP Dialogue to pave the way for bilateral trade agreement negotiations, it is not likely to happen quickly, as a such a deal would be discussed through the Trade and Investment Framework Agreement platform.
However, there is no doubt that the EPP Dialogue reflects the trend that bilateral trade relations in the near future could progress further, and it is more than that: The Dialogue enables Taiwan to grasp the US’ economic strategy planning and gives Taiwanese firms an idea of what opportunities might come their way in bilateral cooperation.
For instance, the US’ push for a Clean Network of trusted partners is to move US production and supply chain dependency away from China, and the EPP Dialogue gives Taiwanese companies access to the US-led supply chain realignment.
As the concept of alternative supply chains is not only being promoted by the US, with countries such as Australia, India and Japan, and even the EU announcing plans to reduce their dependence on China, Taiwan must seize the opportunity.
In other words, the significance of the EPP Dialogue goes beyond the expectation of trade agreement negotiations, it also brings Taiwan closer to the US’ economic strategies and offers opportunities for Taiwanese firms.
Moreover, it helps Taiwan prepare for potential dialogues of the same kind with other major economies and ensures that its companies will not be absent from future bilateral or multinational cooperations.
While Taiwanese firms are expected to face more competition after the Regional Comprehensive Economic Partnership, signed by 15 Asia-Pacific nations on Nov. 15, takes effect, the continued US-China tensions, as well as the anti-China sentiment in many democratic countries, could work in Taiwan’s favor.
The effect of lower tariffs would be less important for other nations than having trustworthy partners such as Taiwan.
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