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Publications Topics Archive Topics Archive 2007 Vol.37- No.5 Commentary: When Doors Close, Windows Open
Publications Topics Archive Topics Archive 2007 Vol.37- No.5 Commentary: When Doors Close, Windows Open | Commentary: When Doors Close, Windows Open |
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"When Doors Close, Windows Open"
But not all is lost. Although President Bush no longer deals with a Republican-controlled Congress, interest exists across party lines to find a way to extend TPA so the U.S. can continue working on the Doha Round of WTO negotiations, as well as conclude additional FTAs. Many Democrats indicate they could support extension if more stringent labor and environmental requirements are guaranteed in future negotiations. Debate on renewal may drag on for months, but that doesn't mean Taiwan has to wait until the Office of the U.S. Trade Representative (USTR) is given the go-ahead to resume FTA negotiations. There are other means to ensure that momentum is not lost. Since 2004, the United States and Taiwan have been conducting a reinvigorated series of bilateral economic negotiations called the Trade and Investment Framework Agreement (TIFA) talks. These discussions, held between senior Taipei and Washington officials, received a shot in the arm in May 2006 when Deputy USTR Karan Bhatia visited Taiwan for the most recent round of talks. Issues on the table included many of the same topics as the FTA negotiations between the U.S. and other trade partners. Each TIFA round has focused on agriculture, trade and market access, financial services, pharmaceuticals, medical devices, intellectual property rights, government procurement, trade security, and other issues. Similar to FTA goals, TIFA talks work to strengthen two-way trade, which in 2006 was an impressive US$61.2 billion, making Taiwan the ninth largest U.S. trade partner. The door to an FTA may be closed for the moment, but many windows of opportunity are open. The U.S. and Taiwan should take this chance to step back and view the on-going TIFA talks in a broader context and fine-tune the "tone" of the talks as well. USTR negotiations on FTAs, as well as TIFA, tend to be somewhat adversarial, with both sides engaged in tough negotiations on the issues. This is to be expected, as the negotiators represent powerful business interests on their respective sides. But a new development in the latest round of TIFA talks has signaled a fruitful new direction. At the May 2006 talks, both sides agreed to establish a Consultative Committee on Agriculture - a decidedly cooperative venture, not an adversarial one, with the purpose of focusing senior-level attention on critical agricultural issues. Although market access is on the agenda, the committee also sets up a mechanism to discuss broader agricultural policy and development goals. As Taiwan's agriculture sector makes its sometimes painful transition to high-value, high-tech, globally competitive agriculture production, U.S. collaboration and experience could well smooth the path and help senior decision-makers to shift more efficiently and effectively into biotech, biofuels, and other emerging technologies. The committee will also broaden the TIFA process by providing regular opportunities for senior officials from both sides to discuss issues, solve problems, and plan for the future - all to the continuing health and growth of two-way agricultural trade. This development deserves special attention because it addresses an often unrecognized problem: The U.S.-Taiwan trade relationship has been so strong for so long that it has been taken for granted. As manufacturing sectors shrink in both economies, it is time to stimulate new areas of trade. For example, U.S. service industries have much to offer the Taiwan consumer, and also offer rich areas for joint ventures, franchising, and other investment and trade possibilities. The impact on new employment, job training, and related social issues (such as private-sector healthcare for an aging population) could be profound. The United States and Taiwan remain primarily focused on existing areas of trade. It's time for more innovative thinking. The new directions and business sectors identified by the Agricultural Consultative Committee are a good start, but Taiwan's total agricultural sector accounts for less than 2% of GDP. Services, on the other hand, account for 73%. Because they remain underdeveloped and far from world class, service industries offer vast possibilities for cooperative development. In yet another addendum to the TIFA talks, the U.S. and Taiwan are currently working on three bilateral agreements - on investment, tax, and government procurement. Each would have solid impact on business operations on both sides. Of these, a government procurement agreement has long been seen as a way to stimulate substantially greater investment interest in Taiwan. This is a good time to focus on concluding the deal on all three agreements. Despite the closing of the FTA door, for now at least, the TIFA talks open many windows of opportunity that should be aggressively pursued by both the United States and Taiwan. The longstanding bilateral trade relationship can in fact get even better with a constructive mix of bilateral negotiations and cooperative endeavors. - Richard R. Vuylsteke is executive director of the American Chamber of Commerce in Taipei. |
