Remarks by AIT Director Stephen M. Young at Chinese National Federation of Industries Leaders Forum
OT0713E | Date: 2007-08-16
Thank you Chairman Chen, ladies and gentlemen. It is a privilege to address so many of Taiwan's leading business representatives. The more time I spend in Taiwan, the more I am struck by the remarkable diversity and dynamism of the Taiwan economy. Those of you responsible for Taiwan's success understandably focus on challenges to future growth. Still, I tend to remain optimistic about your economy, encouraged by the long history of vibrant and expanding U.S.-Taiwan economic relations.
Taiwan is our ninth-largest trading partner, and we are your third-largest economic relationship. In the first half of the year, a 19 percent increase in U.S. exports to Taiwan paced overall bilateral trade growth of 7 percent. We're on track for another record high in total annual trade. Our economic relationship has never been stronger.
We must not take this success for granted. Both sides have a vital stake in continuing to build economic ties and sustaining mutual prosperity. Taiwan has thrived in East Asia, arguably the world's most competitive economic region. Honing our competitiveness is key to the future of both the U.S. and Taiwan economies.
The U.S.-Taiwan Trade and Investment Framework Agreement (TIFA) is the primary vehicle for deepening our already flourishing bilateral economic relationship. Although TIFA is already over ten years old, I am delighted to report that the process has seen renewed vigor over the past eighteen months, most recently with July's successful round of talks in Washington.
Through TIFA, the U.S. and Taiwan are working together to achieve concrete results that will deliver real benefits to both sides. We have, for example, established a Consultative Committee on Agriculture (CCA) to address priority issues, including giving Taiwan consumers the chance to enjoy a full range of U.S. agricultural products. The U.S. and Taiwan share the critical goal of protecting consumer health. As we address food safety issues, therefore, the U.S. will continue to encourage our Taiwan colleagues to review accepted international standards and adopt a science-based approach that ensures consumer safety while avoiding unnecessary trade disruptions.
On a broader level, we are working through TIFA to improve bilateral investment opportunities. We are doing everything we can to have the greatest positive impact on the business and investment climates in both the U.S. and Taiwan.
At the same time, we are working to enhance protection for intellectual property rights to encourage our inventors and innovators. We applaud Taiwan's recent efforts to improve IPR enforcement, including passage of a law restricting peer-to-peer file-sharing, and the establishment of a court of appeals for IP issues. We look forward to continued improvements in this area.
We understand Taiwan's strong commitment to ensuring the best possible health care for its people. Availability of world-class pharmaceuticals is part of such care. We will therefore continue to encourage Taiwan to implement a mandatory standard contract for all agreements between hospitals and drug companies as quickly as possible. When implemented, this measure will encourage and reward drug-makers' innovation while enabling them to offer the most effective pharmaceuticals to the people of Taiwan.
We are grateful for Taiwan's cooperation in implementing and enforcing export controls on strategic items. In particular, we note Taiwan's recent efforts in investigating and prosecuting violators of Taiwan's export control rules and regulations. We look forward to continued active cooperation with Taiwan on meeting international non-proliferation goals.
Taiwan's ambitions to emerge as a regional service center depend upon continued legal and regulatory reform. As in the U.S., the service sector now accounts for over two-thirds of the Taiwan economy. We encourage your efforts to reform and liberalize Taiwan's financial sector. As two of the world's leading centers of high-technology research and development, the U.S. and Taiwan also have much to gain through increased cooperation and investment in e-commerce, biotechnology, telecommunications, and other knowledge industries.
While the pace and nature of results under the TIFA process may vary, the trend is clear: the U.S. is firmly committed to expanding our economic relationship with Taiwan. Our work is reinforced by the tireless efforts of the American Chamber of Commerce in Taiwan. In fact, AmCham's high profile role across the gamut of economic reform issues is one of the best testaments to the scope of our economic ties. Quite simply, Taiwan and America's prosperity matter to each other.
Many of my Taiwan friends seem preoccupied by doubts about Taiwan's economic competitiveness and future. Given your many strengths, I think you have little reason for worry. The U.S. remains an admirer and staunch supporter of Taiwan's vibrant democracy. What you have done in building the foundation for a strong and enduring democracy is remarkable. You should be very proud of this achievement, especially as you approach the legislative and Presidential elections. The U.S. respects the democratically expressed voice of the Taiwan people, and we will work closely and productively with whoever is elected president.
As you prepare for the upcoming election, we note that economic issues are emerging as a major topic of discussion. We welcome this debate on Taiwan's economic future, including the future direction of cross-Strait trade and investment, and expect that the views of the Taiwan business community will help inform dialogue on this issue.
Taiwan both contributes to AND benefits greatly from mainland China's dramatic economic growth. Expanding economic ties across the Taiwan Strait will serve to enhance further Taiwan's global competitiveness. Improving cross-Strait links will make Taiwan an even more attractive economic partner for the U.S. At the same time, economic opening to China will help Taiwan achieve its ambition to become a regional service hub.
In that vein, please allow me to urge Taiwan's manufacturers to apply your high standards of labor practices and environmental protection to your factories in mainland China, setting an example of corporate responsibility across the Taiwan Strait.
Free trade remains at the heart of U.S. economic policy. This commitment is nowhere more evident than in Asia, the fastest-growing economic region in the world. Although some may disagree about the pace and scope of expanding free trade, we must not forget that trade is never a zero-sum game.
As one of the world's major trading economies, Taiwan is well-placed to benefit from the continued expansion of global trade. Facilitating market liberalization in the Doha Round is at the core of U.S. trade policy. As a WTO member, Taiwan has a positive and important role to play in supporting the global economic agenda. APEC is another key international organization in which Taiwan makes a vital and continuing contribution toward expanding international economic cooperation, and we are grateful for your useful role and active participation.
Our commitment to free trade extends to the bilateral level. The U.S. has strong economic interests in Asia, and we are working to expand trade with many of our partners in the region. The U.S.-Korea Free Trade Agreement, once ratified by our Congress and the South Korean legislature, will represent a new regional standard for economic liberalization. All should welcome the prospect of growing trade and accelerated growth between two of the region's - and the world's major trading powers.
Through TIFA, the U.S. is also expanding its economic relationship with Taiwan. We hope that our friends in Taiwan will continue to use TIFA to enhance Taiwan's attractiveness as an economic partner, and make Taiwan a model for free trade in the Asia-Pacific region.
In closing, let me once again express my fundamental belief in Taiwan's bright economic future. Just as important, allow me to reiterate my faith in the U.S.-Taiwan economic relationship. Our flourishing economic ties have been an important, if sometimes under-appreciated, achievement. We remain committed to the TIFA process as the best vehicle for expanding our trade and economic relationship. Given our progress thus far, I am convinced that both sides will continue to enjoy the fruits of a vibrant bilateral economic relationship in the coming years.