The Ministry of Foreign Affairs (MOFA) should discuss with Washington how arms sales would relate to its requirements regarding the Taiwan-US trade imbalance, Chinese Nationalist Party (KMT) Legislator Chen Yeong-kang (陳永康) said.
US president-elect Donald Trump might seek to tackle the Taiwan-US trade imbalance through tariffs, he said.
Washington might also seek to push Taiwan to increase its purchases of US arms, but those arms purchases likely would not count against the trade imbalance, he said, adding that the government should discuss this issue with the US.
Photo: CNA
Chen made the comments at the Legislative Yuan on Wednesday during a joint legislative committee meeting attended by officials from MOFA, the Ministry of Economic Affairs and the National Development Council.
The meeting was held to discuss the impact of the US presidential election’s outcome on efforts to establish a cooperative framework for trade and technology exchanges between Taiwan and the US.
The US is Taiwan’s second-largest export market, and Taiwan’s trade surplus with the US reached US$52.9 billion this year as of last month. During the meeting, lawmakers raised concerns that Trump is expected to put tariffs of 10 to 20 percent on Taiwanese exports, as part of efforts to bolster demand for domestic manufacturing in the US.
Chen suggested that Taiwan could seek to discuss the trade imbalance with US officials at upcoming high-level international meetings. Taiwan could convey to the US its plans to increase arms purchases accordingly as the defense budget is increased, and request that arms purchases be counted to offset the trade deficit, he said.
“This could provide leverage in tariff negotiations, but would require colleagues from the Ministry of National Defense, the Ministry of Foreign Affairs and the Ministry of Economic Affairs to jointly discuss the details,” he said.
Deputy Minister of Foreign Affairs Tien Chung-kwang (田中光) confirmed that the ministries would meet to discuss the issue.
When reached for comment, Institute for National Defense and Security Research fellow Su Tzu-yun (蘇紫雲) yesterday said that the issue of the Taiwan-US trade deficit is being raised now mainly due to complaints from the US Department of Commerce.
“However, it is general international practice not to include arms sales in calculations of trade surpluses and deficits,” he said.
“If the military procurement is commercial, it would be included in the US Department of Commerce’s statistics. Otherwise it would be included in the US Department of Defense’s statistics,” Su said.
However, Taiwan’s arms purchases create jobs in at least six US states, and some US government departments have already suggested that those purchases effectively reduce the trade deficit, he said, adding that Taiwan is only 14th on a list of the 16 economies with which the US has a trade deficit.
“Efforts could be made to balance the deficit, but there should also be more discussion from the perspective of the employment opportunities these arms purchases create,” Su said.
According to publicly available information, it takes roughly 80,000 work hours to build each F-16V, and about 65,000 work hours to renovate each M1A2T tank, he said.
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