2021 Taiwan White Paper
Messages to Washington
Messages to Washington
Taiwan has proven itself to be a trustworthy partner of the U.S. It has been a dependable supplier of cutting-edge technologies for American companies, provided public health assistance during the recent pandemic, strived to remove trade irritants, and cultivated an inspiring model of vibrant democracy. As the U.S. has come to recognize Taiwan’s contribution to safeguarding global supply chains and maintaining peace and security in the Indo-Pacific, the two sides have drawn even closer over the past several years.
At a time when the international trading order is in flux and American leadership is under serious challenge, the U.S. needs reliable friends around the world as never before. The huge US$12 billion chip-making project in Arizona being carried out by the Taiwan Semiconductor Manufacturing Co. is a concrete sign of what such mutual cooperation can bring.
Now is the time for Washington to move decisively to achieve closer economic integration and free trade with Taiwan. AmCham Taiwan calls on leaders in Washington to begin now to champion a Taiwan Commercial Initiative (TCI) – a coordinated approach comprising six parallel tracks, with the goal of concluding a Bilateral Trade Agreement (BTA).
Collaboration with Taiwan has advanced under the Economic Prosperity Partnership Dialogue (EPPD) and the Global Cooperation and Training Framework (GCTF), while loosened ground rules governing interaction between U.S. government officials and their Taiwan counterparts will facilitate such cooperation. Strong gestures of support for Taiwan during the Trump Administration have been further built upon under the Biden presidency.
Leading members of both houses of Congress from both political parties have been speaking out in favor of progress toward a BTA between Taiwan and the U.S., as well as a place for Taiwan in the World Health Assembly and other key international organizations. Legislation to date has included the Taiwan Travel Act and the Taiwan Allies International Protection and Enhancement (TAIPEI) Act, while the Taiwan International Solidarity Act and the Taiwan Fellowship Act are currently under consideration.
An American business coalition of which AmCham is a founding member has called for early action toward a BTA. For the benefit of American businesses and workers, we urge the Biden administration to bring together the various nascent initiatives and proposals into a coordinated TCI drive for strengthened cooperation with Taiwan along the lines set out below.
Track 1: TIFA – Give an Immediate Signal of Intent to Restart Soon.
There have recently been promising indications that the bilateral Trade & Investment Framework Agreement, or “TIFA talks,” which provide a practical and symbolic foundation for commercial ties, may soon be restarted after a five-year hiatus. The negotiations are conducted by teams led by the Office of the U.S. Trade Representative (USTR) and Taiwan’s Ministry of Economic Affairs (MOEA), and typically cover areas such as IPR protection, pharmaceuticals, medical devices, and agriculture, which are critical U.S. interests.
These talks not only serve to remove impediments to two-way trade and investment, but also help set strategic direction for further cooperation. Their absence has held back progress on other economic initiatives. Among the principal trade irritants in recent years has been Taiwan’s restrictions on the import of U.S. pork products containing traces of a certain feed additive. The issue has been controversial in Taiwan because opponents of relaxing the regulation have portrayed the matter as one of food safety. When the Tsai Administration took the politically courageous step last year of opening the market by accepting international standards for the additive, it stressed the importance of resolving the issue in order to put the trade relationship with the U.S. back on track.
Yet the topic remains a political hot potato in Taiwan, with a public referendum on the question scheduled to be held August 28. A negative result in that poll would likely represent a major setback in the bilateral trade relationship. As a signal that it recognizes Taiwan’s efforts to ease trade irritants like the pork restrictions, we urge USTR to announce plans by mid-August to resume the TIFA talks, even if for a to-be-determined date and with a virtual format.
Track 2: EPPD – Looking toward a Second Round with Private Sector Engagement in 2021.
The initial round of the EPPD last November showed that it is an effective way to supplement traditional trade and investment talks with science, technology, and economic security concerns, opening new avenues for the U.S. to collaborate with its technologically advanced, strategically placed partner, Taiwan. Expanding the dialogue to one through which businesses and civil society can make common cause with governments to tackle 21st century challenges would make the process even more relevant. In fact, leveraging the EPPD to encompass public-private approaches would empower all the TCI tracks and better tap Taiwan’s capacities. Excluded from most international forums, Taiwan is particularly reliant on public-private participation.
We understand that the American Institute in Taiwan (AIT) is planning a 2021 round of the EPPD. AmCham hopes that the scope will be expanded to include the private sector and that the agenda will include topics such as strengthening supply chain structures and building cutting-edge technologies from 5G to medical supplies – all areas in which AmCham members can make a significant contribution. The Chamber looks forward to making available the expertise of some of our more than 520 member firms, whether in a business advisory function, engaging in parallel B2B activities, or by fostering ventures to commercialize the fruits of EPPD agreements.
Track 3: U.S.-Taiwan Trade & Investment Platform – Convoked by USDOC and MOEA.
Transaction-oriented platforms organized by governments but driven by the private sector can help translate market-access or strategic cooperative agreements into job-and-wealth-creating business. Such an approach for the U.S. and Taiwan has been suggested by thoughtful Washington trade insiders such as Evan Feigenbaum and Barbara Weisel. It holds promise as a promotional complement to the access- and policy-heavy first and second tracks. Taiwan has consistently been among the world’s largest participants in the SelectUSA Investment Summit and recent announcements by TSMC and Hon Hai (Foxconn) suggest a wave of U.S.-bound direct investment that this track should aim to facilitate with sustained interaction.
As part of such a platform, the U.S. Department of Commerce (USDOC) and Taiwan’s MOEA could invite companies and associations to explore business development issues in areas of mutual promise. These are likely to include semiconductor and e-mobility investment in the U.S., defense industry collaboration, joint development of pandemic mitigation/response solutions, and expanded cooperation to promote third-country infrastructure investment, including green energy projects.
The Infrastructure Finance Framework set up at AIT in late 2020 may offer technical support for the latter work-streams, which also dovetail with Taiwan’s New Southbound Policy. Taiwan should also be engaged within the State Department’s Blue Dot Network to support the global development of quality infrastructure. Other U.S. Trade Promotion Coordinating Council (TPCC) agencies – notably the Small Business Administration and the Development Finance Corporation – might lend technical assistance and help identify business opportunities.
Track 4: DTA – With a Legal Template for Economic Agreements with Taiwan.
The U.S. has several tax treaties in the Indo-Pacific but lacks one with top-10 trading partner Taiwan. Double Taxation Agreements (DTAs) prevent redundant taxation of the income of American individuals and businesses working in signatory countries, and vice versa. They help to minimize tax evasion, make it easier for talent to circulate between co-signers, and improve bilateral relations and investment. By enhancing efficiency, they lead to more job creation, which stands to offset revenue lost to the Treasury.
Tracks 1-3 address a swath of sectoral opportunities without requiring Congressional action. Narrow functional agreements such as a DTA may be equally important and are often less complex to negotiate than broad trade agreements. However, they may also require approval by one or more houses of Congress, as would a BTA. In the absence of a formal government-to-government relationship with Taiwan, the State Department’s legal office and other agencies need to engage Congressional leadership to design the legal structure for economic agreements with Taiwan.
As the legal issues are resolved, AmCham looks forward to sharpening the business case for a DTA – and in so doing to help pave the way for a BTA.
Track 5: Plurilateral Economic Talks – Bring Taiwan into Existing and New Conversations
To reinforce the four bilateral tracks, Washington should continue to bring Taiwan into discussions with Japan and other similarly minded governments involving digital trade, export controls, cybersecurity, and other issues where Taiwan stands to contribute more as it breaks through its enforced international isolation. As the expansion of the GCTF platform and increased support for Taiwan’s participation in international bodies have shown, Asian and European partners are keen to work with Taiwan given its strong rule of law, transparent governance, and protection of intellectual property rights. Additionally, Washington could play an invaluable role in convening a timely discussion primarily among the private sector actors driving semiconductor technology and supply chain matters. Such interaction may include Japanese, Korean, and Dutch firms, as well as Taiwanese and U.S. companies.
Track 6: BTA – TCI Homestretch Requiring Patience…and Opportunity to “Fast Track.”
The preceding tracks, while important and timely, do not preclude the need for a BTA, as the Chamber and its BTA Coalition partners, including the U.S.-Taiwan Business Council, have advocated. Indeed, a BTA with Taiwan is an American priority interest that should be taken up as soon as feasible as the keystone of the TCI. The U.S. national economic interest case for a BTA – already a strong one when first broached two decades ago – is now compelling, whether considered in macroeconomic, strategic sector/technology terms or from a political, defense-security, and geopolitical viewpoint.
The Biden Administration’s re-emphasis on U.S. alliance architecture and soft power utilization further underscores the value of a BTA with Taiwan. The idea is highly popular on Capitol Hill, standing alone for the high degree of bipartisan support it enjoys in both the House and Senate in an era of general skepticism about trade. Just six months ago, 161 members of Congress wrote to the previous USTR urging him to open negotiations with Taiwan. The letter argued that “As the trade and investment relationship with Taiwan already supports an estimated 373,000 U.S. jobs, working toward [a BTA] would further enhance…the global competitiveness of U.S. industries while spurring American job creation.” The authors noted that “Taiwan already affords its workers a high standard of labor protection, consistent with ILO conventions, and is a leader in environmental protection in the region.”
A patient, multi-track approach to laying the groundwork for the BTA is needed. AmCham looks forward to expanding the Coalition and making a strong case in the coming year for how a BTA would benefit American business and employment. In parallel, the Biden administration should create an interagency task force to conduct a “gap analysis” aimed at identifying areas where Taiwan’s domestic laws and regulations are inconsistent with recent high-standard trade agreements. At the same time, the BTA is so important and timely that legislative action to expedite it should be considered as well. Language instructing the administration to embark on BTA negotiations with Taiwan may represent the swiftest such approach and we urge members of Congress to consider providing this impetus and direction in the U.S. Ensuring American Global Leadership and Engagement Act (EAGLE) Act of 2021 or other relevant vehicles.
Conclusion
While ambitious in scope, the TCI we have proposed above is feasible given the broad support for its objectives on the U.S. and Taiwan sides and among the private and public sectors. While the tracks reinforce one another, they are neither interdependent nor rigidly sequenced. Indeed, given the potential of a U.S.-initiated BTA to set in motion further economic liberalization both within Taiwan and beyond, its conclusion might constitute more of a starting block than a finish line. AmCham enjoins readers in Washington to help us get started on this proposal today. As one of the most impactful, influential, and diverse business organizations in Taiwan, the Chamber is eager to join a collective effort to push forward this initiative and share its vision with stakeholders in America, Taiwan, and globally.
Addendum
While the six TCI tracks listed above constitute the core items on AmCham’s advocacy agenda for 2021-2022, we provide two additional recommendations that we view as equally important to enhancing the U.S.-Taiwan relationship and ensuring that Taiwan is able to maintain its status as one of the U.S.’ most critical economic partners.
Pass, fund, and expedite initiation of the Taiwan Fellowship Act. AmCham welcomes the reintroduction in this Congress of the Taiwan Fellowship Act. The bipartisan proposal would provide a great opportunity for a rising generation of U.S. government Asia specialists to experience Taiwan’s political and economic strengths and make meaningful, long-lasting connections with their Taiwan counterparts while building core career expertise, including Chinese language skills. It would also encourage knowledge sharing and help to address inefficiencies in both partners’ governing systems. We call on Congress and the Biden administration to make a clear commitment to this program by swiftly enacting and implementing the Taiwan Fellowship Act and preparing to announce and launch the program this year. Doing so would set the stage for the first cohort of fellows to be welcomed to Taiwan in 2022.
Ensure Taiwan’s access to a sufficient supply of vaccines. As AmCham Chairperson CW Chin noted recently in a letter to the COVID-19 coordinators at the U.S. Department of State and the White House, the current outbreak of COVID-19 in Taiwan has threatened to cause serious disruptions to some of its most vital manufacturing operations, including those of its semiconductor producers. Of particular concern is the fact that Taiwan is among the world’s most densely populated locations, increasing the potential for the situation to badly deteriorate. Were the virus to spread out of control, it would likely have a negative impact on U.S. industry and interests. For a number of reasons, Taiwan has had limited success in securing a sufficient and timely supply of vaccines. We urge our friends in Washington to push for Taiwan’s inclusion at the appropriate level in all efforts to direct the U.S.’ surplus supply of vaccines to areas of critical need overseas.
台灣是美國可靠夥伴,實證歷歷。不僅提供美國公司足以信賴的先進科技,在最近疫情期間提供公衛支援,台灣也努力排除干擾貿易的因素,其民主政治活力充沛,更足堪表率。近年,美方重視台灣維繫全球供應鏈及印太區域和平安全的貢獻,雙方關係更加緊密。
如今國際貿易秩序不斷變化,美國領導地位倍受挑戰,遠比以往更需要世界各地的可靠盟友。台積電斥資120億美元在亞利桑那州設置晶圓廠,足證美台合作的價值。
儘速強化與台灣之間的經濟整合、自由貿易,是華府當前要務。台灣美國商會呼籲華府領袖們一同支持「台灣商業計畫」(Taiwan Commercial Initiative, TCI)。它包含六個平行的行動路徑,旨在促成「雙邊貿易協定」(BTA)。
美台合作在「經濟繁榮夥伴對話」(EPPD)、「全球合作暨訓練架構」(GCTF)之下有所進展,處理美台政府官員互動關係的準則放寬,也有利雙方合作。川普執政時明確表態支持台灣,拜登政府以此為基礎,並且更進一步。
美國兩大黨在國會參眾兩院的領袖,都表明支持台美之間簽訂雙邊貿易協定,也支持台灣參與世界衛生大會等重要國際組織。立法方面的進展,則包括《台灣旅行法》、《台灣友邦國際保護及加強倡議法》,以及目前在審議中的《台灣國際團結法案》與《台灣研究獎學金法案》。
美國商會參與成立的一個美國商業聯盟,也呼籲美國政府加速推動簽署美台雙邊貿易協定。為使美國企業及就業者得到好處,商會籲請拜登政府整合各種新推出的計畫及提案,形成「台灣商業計畫」,參考以下列出的幾個行動路徑,更密切地與台灣合作。
路徑一: 立即表示有意在近期重啟TIFA協商
跡象顯示,為美台雙邊商務關係促進提供實務及象徵基礎的「貿易暨投資架構協定」(TIFA)協商,經過五年中斷,近期可能重啟。TIFA協商由美國貿易代表署及台灣經濟部各自領軍的團隊參與,內容通常包括智慧財產權保護、製藥、醫療器材與農業,皆是美方利益所在。
TIFA協商不僅有助排除美台之間貿易投資阻礙,也為雙方後續合作提供策略方向。協商中斷,讓其他經濟計畫的進展受限。近年,干擾美台貿易重要因素之一,是台灣對殘留某種飼料添加物的美國豬肉產品限制進口。由於反對解除禁令的人士將此議題塑造成食安危機,爭議難解。所幸蔡英文政府去年勇敢行動,依循添加物殘留國際標準開放了市場,突顯化解爭議讓美台貿易重回正軌的重要性。
但美豬爭議尚未落幕,台灣預計8月28日針對美豬議題舉行公投。如果公投結果負面,對美台貿易關係可能帶來重大衝擊。我們籲請美國貿易代表署在八月中前發表聲明要重啟TIFA協商(即便確切日期待定,並以網路視訊形式進行),對台灣努力排除美豬進口限制這類貿易干擾因素表達肯定。
路徑二:在2021年第二屆EPPD會議,擴大民間部門參與
去年11月首屆美台「經濟繁榮夥伴對話」(EPPD)顯示,在傳統貿易投資相關討論之外,輔以科學、科技與經濟安全議題,確有實效,能讓美國能以更多新管道,和技術先進、佔有重要戰略位置的台灣合作。擴大對話內容,使業界及公民社會能與美台政府共同努力,克服21世紀的挑戰,也能讓對話更富實質意義。事實上,善用EPPD,凝聚公、私部門共識,可賦予TCI更多力量,台灣也更能發揮所長。台灣被大多數國際組織論壇排除在外,結合公私部門的參與,對台灣特別重要。
美國在台協會正籌劃2021年度的EPPD。商會期盼此次會議能開放民間部門參與,把強化供應鏈結構,發展5G及醫療用品等尖端技術納入議題。這些皆是商會會員能有重要貢獻的領域。商會也希望能將520多個會員企業的專業能力,藉由商業顧問功能、B2B活動,或是推動計畫,將EPPD相關協定成果商業化。
路徑三:美台貿易及投資平台,由美國商務部、台灣經濟部召集成立
政府建構但由民間推動的交易平台,能將以市場准入、策略合作為主軸的協定,轉化為創造就業及財富的商機。Evan Feigenbaum、Barbara Weisel等思考縝密的華府貿易專家,曾建議美台貿易也可採取此一作法。相對於TCI側重市場准入及政策面的第一、二條路徑,這條路徑在行銷推廣層面提供了補強。在「選擇美國投資高峰會」上,台灣一直是參與人員最多的代表團之一,近來台積電及鴻海(富士康)所發布對美投資計畫也顯示:我們應該透過這種平台,協助美台互動,促成新一波對美直接投資。
美國商務部及台灣經濟部可以透過這個平台,邀集企業及協會組織,在對雙方都有利的領域謀求商業發展機會。這可能包括投資美國半導體和智慧移動產業、國防產業合作、共同研發疫情緩解/反應解決方案,以及增加在第三國進行綠能計畫等基礎建設的投資合作。
2020年底美國在台協會成立的《美台基礎建設融資及市場建立合作架構》,或許能為第三國投資案相關工作提供技術支持,它也可與台灣「新南向政策」銜接。台灣應參與美國國務院推動的「藍點網絡」計畫,支持在全球建立高品質基礎建設。美國貿易促進協調委員會(TPCC)的其他成員機關,尤其是小型企業署、發展金融公司,也可提供技術支援,協助找到商機。
路徑四:附帶法律範本的DTA,為美台經濟協定做預備
美國與印太區域內數個國家簽訂了租稅協定,但與身為前十大貿易夥伴之一的台灣之間卻沒有簽訂。雙重課稅協定(DTAs)可以避免在締約國家工作的美國個人及企業所得被重複課稅,也可避免締約國家在美工作人員被重複課稅。它有助減少逃稅,讓人才跨國流通更為便利,也增進雙邊關係與投資。租稅協定提高效率,有助創造就業,也讓企業彌補因繳稅損失的收入。
第一、二、三條路徑,可為公、私部門創造許多機會,無須國會介入。DTA這種只有特定功能的協定,也很重要,跟牽涉廣泛的貿易協定相比,DTA協商通常不會太複雜。然而正如雙邊貿易協定,DTA仍須國會參眾兩院之一或兩院共同通過,才能完成簽署。美、台政府之間欠缺正式邦交,美國國務院的法律辦公室等單位,有必要與國會領袖溝通,研究如何設計與台灣達成經濟協定的法律架構。
一旦法律議題獲解決,商會期待更能以商業角度推動促成DTA,為美台雙邊貿易協定鋪路。
路徑五:透過多邊經濟協商,讓台灣加入現有及新的對話
為了強化上述四條路徑,華府應在與日本等理念類似政府探討數位貿易、出口控制、 網路安全等議題時,也邀請台灣一同參與。只要台灣有機會突破在國際社會的孤立處境,就能在這些議題上做出更多貢獻。隨著GCTF平台逐步擴大,以及更多人支持台灣參與國際組織,亞、歐洲夥伴也樂於與台灣合作,他們看重台灣是法制社會,治理透明,並致力維護智慧財產權。此外,華府也可扮演要角,及時邀請半導體業及供應鏈事務的民間代表,展開討論。日、韓、荷商企業,以及台、美企業,都可參與。
路徑六:BTA作為TCI最終努力目標,須要耐心促成,也須把握機會轉進「快軌」
一如商會及美台商業協會等「BTA聯盟」夥伴們的共同倡議,前述幾條路徑,雖然重要也十分即時,但不代表雙邊貿易協定(BTA)已無其必要。一旦時機成熟,美台BTA這個對美方有重大利益的協定,應被視為TCI重點部份來推動。在廿年前美國初探美台BTA時即看到許多對美國經濟有利的觀點,此時看來更具有說服力。無論從總體經濟、策略產業/科技,或從政治、國防安全、地緣政治等視角來看,都是如此。
拜登政府對強化美國盟友架構及運用軟實力的重新強調,更突顯了美台BTA有其價值。美台BTA的構想,在美國國會廣獲支持。在眾人普遍對貿易抱有懷疑的這個時代,能贏得參眾兩院兩大黨成員高度支持,實屬罕見。才不過半年前,161位聯邦議員聯名寫信給前任美國貿易代表,敦促他與台灣展開協商。信中指出:「對台貿易投資關係,支持著美國約373,000個工作職位,簽訂BTA將進一步強化美國產業全球競爭力,為美國創造更多就業機會。」這些議員寫道:「台灣以高標準維護勞工權益,遵循國際勞工組織公約,也是區域中的環保領袖。」
要為BTA的簽署奠定基礎,必須投入時間,多方努力。商會期盼更多夥伴加入「BTA聯盟」,並在未來一年就美台BTA對美商企業、創造美國就業的裨益,提出強而有力的說明。美國政府也應組成跨部會工作小組,針對與近期高標準貿易協定內容不符的台灣法規,進行「差距分析」。美國也應考慮採取立法行動,加速實現重要且應時的BTA。國會明言指示行政部門展開美台BTA協商,應是最快方式。我們籲請美國國會議員考慮透過2021年《確保美國領導暨參與全球事務法案》(EAGLE)等相關法案,表達立場,指出前進方向。
結論
商會提出的TCI,看似願景宏大,但其目標在美、台民間及公部門都不乏支持者,確實可能達成。各種路徑之間彼此互補,並非彼此依賴,也無執行先後順序之分。考量由美國發起的BTA,在促進台灣及其他地方經濟自由化的潛在助益,我們不應把實現美台BTA視為終極目標,應將它當作起點。商會呼籲在華府的讀者,立刻開始協助我們展開這個計畫。身為台灣最具影響力、組成最多元的商業組織之一,台灣美國商會熱切盼望與夥伴們一同推動此計畫,與在美國、台灣及全球的利益關係人,分享願景。
補遺
上述六項「台灣商業計畫」相關路徑,是2021到2022年商會在政策倡議方面的工作重點。我們同時提出另外兩項建言。它們在深化美台關係、確保台灣持續作為美國關鍵經貿夥伴方面,同樣意義不凡。
通過《台灣研究獎學金法案》,撥下經費,加速啟動相關計畫。商會樂見美國國會這次再次提出《台灣研究獎學金法案》。這由兩黨共同支持的法案,對於美國政府新一代亞洲專家而言,是體驗台灣政治經濟優點,與台灣官員建立有意義、長遠關係的絕佳機會。他們也能藉此培養中文技能等職涯核心專業。這有利知識分享,彌補美、台政府體系各自效率低落之處。我們籲請美國國會及拜登政府儘快通過並實施《台灣研究獎學金法案》,在今年之內就公佈與啟動計畫,表明支持態度,以助首批獲獎助官員能在2022年抵台。
確保台灣取得充足的疫苗。最近商會會長金奇偉致函美國國務院及白宮負責新冠肺炎事務協調工作的官員,信中指出:台灣目前爆發的疫情,可能對某些最重要的製造業營運造成嚴重干擾,包括半導體廠商。台灣是世界上人口密度最高地方之一,這可能導致疫情惡化,令人擔憂。病毒傳佈若無法控制,恐對美國產業、利益造成衝擊。由於某些因素,台灣在取得疫苗的數量及時效上,成果有限。我們促請華府友人協助發聲,使美國將供給過剩疫苗送往海外有急需地區時,也考慮輸往台灣。
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