In his congressional testimony on Thursday, a senior US trade official called on Taiwan to open direct economic links with China if Taipei hopes to secure a Free Trade Agreement (FTA) with Washington.
The official, Deputy US Trade Representative Karan Bhatia, would not say, however, whether the opening of direct links would assure that the US government would be willing to start FTA talks with Taiwan.
Bhatia, who visited Taipei in May for intensive trade talks and meetings with officials and US businessmen, made his comments in testimony before a House International Relations Committee hearing on US FTAs with East Asia, and in comments with reporters afterwards.
His comments reflected statements he made during the Taipei trip.
For any FTA to become a reality, Bhatia warned, Taiwan must cultivate support among the US business community. A key way it can do that is to make Taiwan a more attractive place for US firms to set up regional offices by facilitating communications between Taiwan and China.
That would mean direct cross-strait links, he said.
Complaining about "policies that Taiwan is imposing on itself and upon its relations with the broader Asian region," Bhatia said, "The long and the short of it is that this is an increasingly integrated region. If Taiwan is going to undertake policies that make it less attractive to US companies for regional hubs, those are considerations that need to be taken into account" when looking at a possible FTA.
Taiwanese officials immediately took issue with Bhatia's comments.
Deputy Washington representative, John Deng (鄧振中), objected to Bhatia's expansion of the FTA issue from the core issue of US-Taiwan trade relations to non-related "very far away elements," or cross-strait relations.
"In Taiwan-US relations we should consider the benefits we can give to each other, rather than expanding to other elements," Deng told the Taipei Times after attending the hearing.
"If you think too far ahead, then nothing can move," he said.
He also noted that Taiwan is gradually relaxing cross-strait restrictions, pointing to this week's "direct" cargo flight from Taipei to China.
Congressman Thomas Tancredo pushed Bhatia to start FTA negotiations with Taiwan.
He chided the administration over its FTA priorities, saying that Taiwan "would be a higher priority to the USTR than access to Bahrain and Vietnam," both of which the Bush administration is now actively targeting for an FTA.
"If the US does not reach an FTA with Taipei, Taiwan's economic survival would be seriously challenged," Tancredo said, warning Washington against "capitulating to Chinese pressure and simply handing over the island" to China.
In comments to reporters after the hearing, Bhatia seemed to blame Taiwan, rather than China, for Taiwan's economic isolation in East Asia, despite Beijing's long-term policy to marginalize Taiwan in the region.
"Taiwan needs to undertake the necessary steps to insure that it remains an attractive place for US companies and other foreign companies to do business, given the important role that China plays in the Asian economy," he said.
"It is important that Taiwan not be economically isolated from developments in the rest of East Asia, and a core part is that cross-strait relations does affect that," he said.
Opening the hearing, committee chairman Henry Hyde said that he was a "strong supporter of negotiating a free trade agreement with Taiwan," fulfilling a personal promise he made to President Chen Shui-bian (陳水扁) in a telephone conversation on the eve of the hearing to express his support.
The 20-minute phone call from Chen was arranged in Washington as a way to stress the importance Chen puts on starting FTA talks with the US.
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