US mulls investment agreement with Taiwan
Friday, 13 July 2007
WASHINGTON, July 12 (AFP): The United States said yesterday that it was considering forging a bilateral investment agreement with Taiwan but ruled out a free trade pact in the immediate future.
The two sides raised the possibility of an investment accord during annual talks under a Trade and Investment Framework Agreement, which usually precedes a free trade pact.
"Both sides agreed to intensify discussions of possible concrete steps to deepen bilateral cooperation in the investment area, including the possibility of a bilateral investment agreement," said deputy US Trade Representative Karan Bhatia.
"Basically, it would commit both sides to a high standard of investment protection," he told reporters.
Taiwan is desperate for a free trade pact with the United States, its key investor, trading partner and top arms provider.
Annual US-Taiwan trade is valued at about 60 billion dollars.
Resolutions have been adopted in the US Congress and at least 39 of 50 US state legislatures support an FTA with Taiwan, but the US administration and business community are reluctant to pursue it with vigor because it may incur the wrath of China.
Washington switched diplomatic recognition from Taiwan to China in 1979.
Bhatia said an FTA prospect with Taiwan did not arise because the administration of President George W. Bush had lost its nearly five-year- old Trade Promotion Authority (TPA), known as "fast-track" on June 30.
Under the TPA, the administration negotiated trade agreements that could only be approved or rejected by the legislature, but not amended.
The last deal signed by the United States before the TPA expiry was an FTA with South Korea-the biggest since the 1993 North American Free Trade Agreement (NAFTA).
The US free trade pact with Taiwan's top competitor South Korea would result in trade diversion from Taiwan and put the island at a disadvantage, Taiwan officials say.
"Given the similar competitiveness between Taiwan and South Korea, I'm afraid a lot of trade opportunities (due with Taiwan) would go to South Korea," Taiwan's de facto envoy to the United States Joseph Wu said recently.
The two sides raised the possibility of an investment accord during annual talks under a Trade and Investment Framework Agreement, which usually precedes a free trade pact.
"Both sides agreed to intensify discussions of possible concrete steps to deepen bilateral cooperation in the investment area, including the possibility of a bilateral investment agreement," said deputy US Trade Representative Karan Bhatia.
"Basically, it would commit both sides to a high standard of investment protection," he told reporters.
Taiwan is desperate for a free trade pact with the United States, its key investor, trading partner and top arms provider.
Annual US-Taiwan trade is valued at about 60 billion dollars.
Resolutions have been adopted in the US Congress and at least 39 of 50 US state legislatures support an FTA with Taiwan, but the US administration and business community are reluctant to pursue it with vigor because it may incur the wrath of China.
Washington switched diplomatic recognition from Taiwan to China in 1979.
Bhatia said an FTA prospect with Taiwan did not arise because the administration of President George W. Bush had lost its nearly five-year- old Trade Promotion Authority (TPA), known as "fast-track" on June 30.
Under the TPA, the administration negotiated trade agreements that could only be approved or rejected by the legislature, but not amended.
The last deal signed by the United States before the TPA expiry was an FTA with South Korea-the biggest since the 1993 North American Free Trade Agreement (NAFTA).
The US free trade pact with Taiwan's top competitor South Korea would result in trade diversion from Taiwan and put the island at a disadvantage, Taiwan officials say.
"Given the similar competitiveness between Taiwan and South Korea, I'm afraid a lot of trade opportunities (due with Taiwan) would go to South Korea," Taiwan's de facto envoy to the United States Joseph Wu said recently.