The word “trade” all too often carries a negative connotation for many Americans, reminding them of shuttered factories and lost jobs due to competition from imports. But studies have consistently shown that the export of American goods and services creates far more employment opportunities in the United States than are lost because of the inflow of foreign products.
Although the Obama administration is yet to formulate a comprehensive trade policy, a promising start was made this month with announcement of the launching of an ambitious National Export Initiative. NEI aims to double American exports over the next five years in support of some 2 million jobs, particularly among Small and Medium Enterprises (SMEs).
Key U.S. government agencies appointed to the new Export Promotion Cabinet under the NEI are now drawing up recommendations for action plans to meet those objectives. Diplomatic posts abroad – including AIT in Taiwan – will also be making suggestions regarding their particular markets. AmCham Taipei pledges its whole-hearted cooperation with the NEI program to help American companies tap opportunities in the dynamic Taiwan market (already the 15th largest destination for U.S. exports) to their full potential.
The Chamber also has some suggestions to help ensure the export initiative’s success. Among the most urgent is altering the current U.S. policy of taxing the income earned by Americans living and working overseas. The United States is the only major industrial country that taxes its expatriates, and in recent years that tax burden has been growing increasingly heavy. The result has been to discourage individual Americans from working overseas, and to deter corporations with tax equalization programs from employing American citizens because of the added expense.
To promote American exports, it is vital to have U.S. nationals on the ground in foreign markets. Even when they work for foreign companies, they are more likely to recommend procurement of American products and services than would their counterparts of other nationalities. The Export Promotion Cabinet should call on Congress to revise current tax legislation that discourages the employment of Americans abroad.
Regarding Taiwan more specifically, the NEI should take full advantage of all available mechanisms for enhancing market access. Largely because of disputes over Taiwan’s restrictions on the import of certain U.S. beef products, it is now nearly three years since the last round of bilateral negotiations under the Trade and Investment Framework Agreement. TIFA is an essential vehicle for improving business conditions in Taiwan for a broad range of industries, and should not be allowed to remain obstructed because of the single issue of beef.
The U.S. government should also find a way to enter into a Bilateral Investment Agreement with Taiwan – an idea that appears stalled because of concern in Washington over technical complications. Since trade invariably follows investment, a BIA would be another way to lay the groundwork for increased U.S. exports.
AmCham welcomes the National Export Initiative, and hopes that its implementation will start with the addressing of practical problems standing in the way of a more robust U.S. trading presence in Taiwan and around the world.