Washington, Taipei Bolster Ties With High-Level Economic Talks

November 22, 2020 Updated: November 22, 2020

TAIPEI, Taiwan—U.S. Secretary of State Mike Pompeo on Nov. 21 welcomed deepening ties between Washington and Taipei following a high-level economic dialogue between the two sides.

The inaugural talks, under the auspices of a new Economic Prosperity Partnership Dialogue (EPP), were held virtually and in-person in Washington on Friday. It focused on areas including science and technology, supply chain restructuring, and 5G networks.

“The United States and Taiwan are strong partners in defending freedom, advancing economic ties, and promoting our shared democratic values. The American Institute in Taiwan Economic Prosperity Partnership Dialogue strengthens our economic relationship even further,” Pompeo wrote on Twitter on Nov. 21.

The talks are part of the Trump administration’s increased engagement with the democratic island. In recent months, two senior U.S. officials visited Taiwan, a departure from previous administrations, while the state department has recently approved three different arms packages to Taiwan, the latest being a $600-million package of advanced drones.

Friday’s talks were hosted by the American Institute in Taiwan (AIT), the de-facto U.S. embassy in Taiwan, and the Taipei Economic and Cultural Representative Office (TECRO) in the United States. TECRO serves as Taiwan’s de-facto embassy in the United States as the two sides do not have formal diplomatic ties.

Washington has maintained a non-diplomatic relationship with Taipei based on the Taiwan Relations Act (TRA), which authorizes the United States to provide the island with military equipment for its self-defense, and also set up a nonprofit corporation called AIT.

Taiwan’s Deputy Minister of Economic Affairs Chen Chern-chyi led a delegation to the United States for the dialogue on Friday. Under Secretary of State for Economic Growth, Energy, and the Environment Keith Krach and Assistant Secretary of State for East Asian and Pacific Affairs David Stilwell participated in the talks.

Washington and Taipei agreed to cooperate on multiple fronts, including giving top priority to the semiconductor industry, according to AIT. Other areas of cooperation included 5G security, healthcare, investment screening, and women’s economic empowerment. The two sides finalized their cooperation by signing a five-year memorandum of understanding.

“Future EPP Dialogues will help strengthen the U.S.-Taiwan economic relationship, further magnify the two societies’ respect for democracy, and strengthen our shared commitment to free markets, entrepreneurship, and freedom,” announced the State Department in a statement published on Friday following the conclusion of the talks.

In response to Pompeo’s tweet, Taiwan’s President Tsai Ing-wen took to her Twitter account to applaud the growing bilateral ties.

“We look forward to continuing our robust partnership with the US in the interests of peace, democracy, & freedom across the region,” Tsai said on Sunday.

Liu Pei-chen, a researcher at Taipei-based think tank Taiwan Institute of Economic Research, said that Washington and Taipei will each benefit by working closely together on semiconductors.

In an interview with Taiwan’s government-run Central News Agency, Liu said the two sides are set to harness each other’s strength, with the United States being a leader in chip design while Taiwan’s strength lies in manufacturing, packaging, and testing chips.

Chipmaking is a highly specialized process involving more than a thousand steps, including chip design and packaging. The end product, semiconductor chips, are used to power nearly all electronic devices, from smartphones and computers to satellites and missile systems.

Taiwan is becoming an increasingly attractive investment destination for foreign tech companies. In early September, Google announced plans to set up another data center in Taiwan, according to local media. In October, Microsoft announced plans to establish its first cloud data center region on the island.

In May, Taiwan’s TSMC, the world’s largest contract chipmaker, announced plans to invest $12 billion to build a factory with its 5-nm processing technology in Arizona.

On Nov. 18, city officials in Phoenix approved a development agreement with TSMC, where the city would provide $205 million for local infrastructure projects, such as roads and water improvement, according to Reuters.

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