Celebrating the anniversary of our independence, the US makes special recognition of our friendships around the world. The relationship between Taiwan and the US has been especially close this year as, working together, the partners have succeeded in welcoming Taiwan into the WTO.
In the past year, the US and Taiwan have each experienced shocking tragedies, which have given each the opportunity to demonstrate their friendship. After the September 11th terrorist attacks, Taiwan's people showed selfless compassion and generosity toward the American public.
Meanwhile, the US provided assistance to Taiwan in the wake of Typhoon Nari and, more recently, after the crash of China Airlines Flight 611, US experts were dispatched immediately to assist in the investigation.
Recent American efforts have focused on combating terrorism worldwide. With the 1996 Money Laundering Control Act and the establishment of the Money Laundering Prevention Center, Taiwan has for years now been at the forefront of efforts in Asia to prevent the use of funds for illegal purposes.
The US will continue to cooperate with Taiwan to protect Taiwan's financial system from being misused by terrorists.
Throughout these difficult times, however, the US and Taiwan continued to benefit from our special, mutually beneficial two-way trading relationship.
Taiwan is the ninth largest export trading market for the US and our eighth largest import supplier. Taiwan trade data shows the US to be by far the island's most important two-way trading partner, with US$18.2 billion in US exports to Taiwan in 2001 accounting for 17 percent of Taiwan's US$107.2 billion in total imports.
Foreign investment further demonstrates the close economic relationship between the US and Taiwan. Over US$11.9 billion dollars have been invested in Taiwan by US firms, with 30 percent of that investment entering Taiwan over the past three years. These investment flows have made the US the largest foreign investor in Taiwan. Foreign investment in Taiwan by the end of 2001 was the second highest on record, amounting to US$5.1 billion, in spite of a one-third decrease from 2000's record-breaking figure during the worldwide economic downturn. This clearly demonstrates Taiwan's attractiveness to foreign investment.
Taiwan has, likewise, also been a leading investor in the US for many years, with investments coming not only from Taiwan's large enterprises, but also from the small and medium-sized enterprises that constitute the backbone of the Taiwanese economy.
Additionally, Taiwan is home to the world's third largest foreign exchange reserves, the majority of which are held in US dollars and include US government bonds. These holdings represent an additional form of Taiwan "investment" in the US economy.
Taiwan's smooth accession into the WTO on January 1, 2002 represented twelve years of close cooperative efforts with the US. With WTO membership, Taiwan has expanded its trade opportunities and contacts and given Taiwan consumers opportunities to benefit from market liberalization through greater choice and lower prices.
As Taiwan continues to adopt the substance and spirit of its WTO commitments it will further increase investor confidence and smooth the way for foreign firms to do more business on the island.
Taiwan consistently guarantees foreign firms national treatment and unrestricted trade-related capital flows, ensuring protection of investments and property rights. This has created a welcome climate for US investors eager to see what Taiwan has to offer as the island's residents use their technological prowess to develop new industries such as nanotechnology and biotechnology.
Over the past year, Taiwan authorities have taken major steps toward financial reform. A publicly-funded Financial Reconstruction Fund was created to assist troubled financial institutions.
The Legislative Yuan last year passed other key reform measures, including legislation allowing the establishment of financial holding companies and measures to encourage financial institutions to get non-performing loans off their books. As Taiwan reduces non-performing loans, it will strengthen its critical financial sector.
Another "investment" in Taiwan's economic future is in strengthening protection of intellectual property rights. The US looks forward to working with Taiwan to enhance enforcement and reduce piracy.
Taiwan also is considering several other reforms that would bring long term benefits. For example, the creation of an independent telecommunications regulatory agency would ensure a level-playing field for new market entrants as Taiwan expands and develops its role as an IT hub in Asia. Revisions of government procurement tendering terms and conditions would encourage more internationally recognized firms to participate in projects in Taiwan and enable the island to benefit from their international experience.
The US continues to look forward to working with Taiwan's Department of Health and the Bureau of National Health Insurance to enhance the health of the people of Taiwan while ensuring adequate reward for innovative consumer products such as new medical equipment and advanced, research-based pharmaceuticals.
Improvements of sanitary and phyto-sanitary standards will help to further open Taiwan's agricultural markets to a smooth flow of imports, broadening Taiwanese consumers' choices.
For Americans, the Fourth of July has special significance this year as a reminder of our flag and of our freedom. Despite economic and other challenges, both Taiwan and the US have persevered and are in the process of revitalizing their economies.
Taiwan and the US share a special close relationship as Pacific Rim trading partners. We are committed to ensuring that the US-Taiwan economic relationship continues to prosper.
In the years to come, the US looks forward to the new cooperative efforts, opportunities, and challenges that will continuously strengthen and enhance our partnership with Taiwan.
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