An early harvest agreement under the U.S.-Taiwan Initiative on 21st Century Trade was announced May 18. The Office of the U.S. Trade Representative said that once this agreement is signed in the coming weeks the two sides will launch talks on additional (and generally considered to be more challenging) issues set forth in the initiative’s negotiating mandate. Taiwanese officials said they hope to conclude those negotiations by the end of the year.
The two sides launched this initiative in June 2022 after the U.S. left Taiwan out of the Indo-Pacific Economic Partnership due to concerns about how its inclusion might be received in China. In August officials announced a negotiating mandate envisioning high-standard commitments and economically meaningful outcomes in areas such as trade facilitation, good regulatory practices, small and medium-sized enterprises, agriculture, standards, digital trade, labor and environment, state-owned enterprises, and non-market policies and practices.
According to USTR, the first agreement under this initiative covers the following topics.
Customs administration and trade facilitation – streamlines border procedures and reduces red tape (e.g., by allowing customs forms to be submitted electronically and border agencies to accept electronic payment of duties, taxes, and fees), which will not only make it “easier, faster, and cheaper” for U.S. businesses to bring their products to Taiwan but will also lower greenhouse gas emissions and reduce spoilage, especially of perishable goods
Good regulatory practices – creates improved transparency tools and mechanisms (e.g., public consultations on draft regulatory measures) that will help SMEs better understand regulatory procedures in both markets, and establishes a committee to monitor implementation of related obligations, improve information sharing, and facilitate enhanced regulatory cooperation
Services – ensures that service suppliers are treated fairly when they apply for permission to operate and that there is a smooth flow of information between the license applicant and the regulator; requires regulators to be independent of the industry they oversee, inform applicants of the requirements to obtain a license, provide applicants a fair opportunity to demonstrate that they meet the requirements, and make timely decisions on whether to issue a license; and prohibits licensing rules that discriminate on the basis of gender
Anti-corruption – commits the two sides to establish comprehensive anti-corruption measures that will prevent and combat bribery and other forms of corruption; addresses money laundering, denial of entry for foreign public officials, the recovery of proceeds of corruption, and enhanced protections for whistleblowers; and mandates procedures for possible removal of public officials who are charged or convicted of corruption
SMEs – encourages SME trade and investment opportunities, including through training programs, trade education, trade finance, trade missions, and improving SME access to capital and credit
Press sources note that news of the agreement came just before planned talks between U.S. and Chinese trade officials on the sidelines of an Asia-Pacific Economic Cooperation ministerial meeting in Detroit. The two economic giants have seen tense bilateral relations in recent months, with Taiwan as one the primary focal points. According to an article in The Japan Times, the Chinese embassy in Washington warned that “the U.S. must not negotiate agreements with sovereign implication or official nature with China’s Taiwan region or send any wrong signal to the ‘Taiwan independence’ separatist forces in the name of trade and economic interactions.”
For more information on U.S. trade negotiations with Taiwan and other partners and how your company could benefit, please contact Nicole Bivens Collinson at (202) 730-4956 or via email.
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