U.S. and Taiwan restart TIFA consultation, Taiwan hopes to sign FTA with U.S.

After a five-year absence, the U.S.-Taiwan Trade and Investment Framework Agreement (TIFA) consultation opened successfully on Wednesday, June 30 at 7:00 a.m. Taipei time (June 29 at 7:00 p.m. EDT) with a meeting between U.S. Trade Representative (USTR) Assistant Trade Representative Terrence J. McCartin and Deputy Chief Negotiator Jenny Yang of the Executive Yuan Office of Economic and Trade Negotiations. McCartin and Jenny Yang, Deputy Chief Negotiator of the Office of Economic and Trade Negotiations of the Executive Yuan of Taiwan, respectively, led U.S. and Taiwan officials from various ministries to hold talks via web video.

A statement released by the Office of the U.S. Trade Representative after the meeting noted that the U.S.-Taiwan talks “focused on enhancing the long-standing trade and investment relationship between the United States and Taiwan,” and that both sides expressed a desire to work together to improve the security and stress tolerance of key supply chains.

Jenny Yang, the lead negotiator for the Taiwan delegation, said at a post-meeting press conference that the two sides agreed during the talks to simplify import and export verification procedures for medical equipment so that consumers can expedite access to medical equipment. Taiwan also called on the U.S. side to expand the supply of the New Crown vaccine through bilateral cooperation in the form of authorized OEMs.

The shortage of vaccines has been a major concern in Taiwan since the epidemic spiked in mid-May after a breach in the epidemic prevention. On the eve of the opening of the TIFA talks, President Tsai Ing-wen called on the U.S. and Taiwan via Facebook to streamline the import and export procedures for vaccines as an important issue in the TIFA consultations.

Promoting the negotiation of a bilateral free trade agreement between Taiwan and the United States is also one of the important objectives of Taiwan’s participation in the TIFA consultation.

At the post-meeting press conference, Jenny Yang said that the U.S. side deeply understands Taiwan’s reasons and determination to sign the bilateral trade agreement. It will continue to strengthen bilateral relations through TIFA in the future. She said the U.S. side considered the meeting highly successful and laid the foundation for bilateral relations, and both sides emphasized that the working groups will be allowed to work closely together in the future under the TIFA structure.

Deng Zhenzhong, a member of Taiwan’s Executive Yuan and chief negotiator of the Executive Yuan’s Office of Economic and Trade Negotiations, said at a press conference after the meeting that the TIFA meeting was very different from the past. In the past, the U.S. side was asking Taiwan to “do this and that,” but this meeting was based on the spirit of cooperation. He believes that the reason for this is that Taiwan has addressed the concerns of the U.S. side.

The U.S. and Taiwan signed the Trade and Investment Framework Agreement (TIFA) in 1994 and then held the first TIFA meeting in 1995. But the tenth consultation was held in 2016 and then stalled. It is widely believed that Taiwan’s failure to open up imports of U.S. pigs containing aldactamine (commonly known as “leptin”), as requested by the U.S. side, was the main reason for the suspension.

In January, Tsai Ing-wen’s government resisted strong public pressure to open up imports of U.S. pigs, which also paved the way for restarting the TIFA consultation.

“This made the U.S. side fully understand Taiwan’s determination to want to align with the U.S. in terms of policy, and thus handled today’s meeting with a positive attitude,” Deng Zhenzhong told reporters.

In his speech after the opening of the TIFA consultation, Deng Zhenzhong said that TIFA meetings can make each other’s economies more prosperous and create more jobs. He hopes that through the TIFA platform, the U.S. and Taiwan will continue to deepen their relationship and gradually move toward a bilateral free trade agreement.

The TIFA meeting will lay an important foundation, and she hopes that the goodwill and mutual trust that both sides have accumulated step by step will become the driving force for future bilateral trade agreements.

Successive governments in Taiwan have viewed the signing of bilateral trade agreements or free trade agreements with the United States as an important strategic goal to strengthen their relationship and move away from over-dependence on the mainland. But for more than two decades, the Office of the U.S. Trade Representative (USTR) has not seemed enthusiastic about negotiating a U.S.-Taiwan free trade agreement. Top USTR officials have said that the U.S.-Taiwan TIFA platform can discuss any issue of trade and investment, including the issue of free trade, so there is no need to hold separate FTA negotiations.

But with the intensification of the U.S.-China strategic competition and the rapid warming of U.S.-Taiwan relations, the U.S. approach to the negotiation of a U.S.-Taiwan free trade agreement is likely to change.

According to Reuters, a bipartisan group of 42 U.S. senators sent a letter this week to U.S. Trade Representative Katherine Tai asking her to “take steps to lay the groundwork to begin negotiating a free trade agreement or other preliminary agreement with Taiwan.

The senators’ joint letter states that “maintaining U.S. economic influence there and reducing Taiwan’s dependence on China is critical to ensuring that the region remains free and open.

China has always opposed the negotiation of free trade agreements between other countries and Taiwan because it believes that FTAs can usually only be signed between countries, and Beijing views Taiwan as part of its territorial sovereignty, often threatening to reunify the mainland with Taiwan even at the cost of a war. Many countries, fearful of China’s economic power, are not eager to risk offending China and consider signing FTAs with Taiwan. However, Taiwan already has bilateral free trade agreements with Singapore and New Zealand.