Republicans Introduce Resolution Urging US to Negotiate Trade Agreement With Taiwan

December 24, 2020 Updated: December 24, 2020

TAIPEI, Taiwan—More than 30 Republican lawmakers in both chambers of Congress have recently introduced resolutions urging the U.S. government to begin negotiating a free trade agreement (FTA) with Taiwan.

“As an important trading partner for the United States and Pennsylvania, a free trade agreement with Taiwan will enhance our economic, diplomatic, and security partnership in the Indo-Pacific while also countering the Chinese Communist Party’s aggression in the region,” Rep. Guy Reschenthaler (R-Pa.) said in a Dec. 23 statement.

The House resolution (H. Res. 1268) was introduced by Reschenthaler, Steve Chabot (R-Ohio), and Mario Diaz-Balart (R-Fla.) on Dec. 17. On the same day, Sen. Pat Toomey (R-Pa.) introduced the companion version (S. Res. 804) in the Senate, co-sponsored by 25 senators, including Tom Cotton (R-Ark.), John Kennedy (R-La.), and Marco Rubio (R-Fla.).

Congressional resolutions do not have the force of the law and they do not need to be signed by the President.

“Building closer trade ties between the United States and Taiwan is a win-win for both countries,” Toomey stated in a statement.

Toomey added: “American workers and manufacturers would have more customers, American consumers would have access to more affordable goods, both economies would grow faster, and America would strengthen its relationship with a key regional ally and increase our economic engagement in the Indo-Pacific region.”

Taiwan was the 10th largest goods trading partner with the United States in 2019, with bilateral trade in goods accounting for $85.5 billion, according to U.S. government statistics. Bilateral trade in both goods and services topped about $104 billion in 2019.

Meanwhile, Taiwan’s economy is heavily dependent on China, the latter being Taiwan’s largest trading partner—occupying 24.3 percent of the island’s total trade in 2019. The United States is in second place, at 13.2 percent.

Taiwan’s effort to sign FTAs with other countries has been hampered by opposition from the Chinese regime, which sees the island as a part of its territory that must one day be united with the mainland. However, the self-ruled island is a democratic market economy with its own currency, military, and constitution.

On Nov. 20, 2017, The Australian Financial Review reported that the Australian government decided to put FTA negotiations with Taiwan on hold because it did not want to upset Beijing, especially after China and Australia signed an FTA in 2015.

The next day, Lu Kang, who was China’s foreign ministry spokesperson at the time, was asked about the Australian report, during a daily press briefing. In response, Kang stated that China opposed “any official contracts and exchanges” between Beijing’s allies and Taiwan.

Kang added that countries should “stick to the one-China principle” and “properly handle the relevant issue with caution.”

Countries that have signed FTA with Taiwan include New Zealand, Panama, Guatemala, and Nicaragua. The two central American countries are Taiwan’s diplomatic allies; the United States is currently not Taiwan’s ally but has maintained a robust relationship with the island on the basis of the Taiwan Relations Act (TRA).

Taiwan’s representative to the United States Hsiao Bi-Khim welcomed the resolution. “As both Taiwan and the United States are making every endeavor to ensure supply chain security and trading relationships that will provide us with more resilience and restore our economic growth in the aftermath of the COVID pandemic, a bilateral trade agreement would be a sensible and necessary move to achieve those goals,” she said in a statement.

There has been strong bipartisan support for the United States to ink an FTA with Taiwan.

In December last year, 161 House lawmakers signed a joint letter addressed to U.S. Trade Representative Robert Lighthizer, encouraging him to start FTA negotiations with Taiwan.

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