Taiwan and the US have concluded negotiations on five issues since the announcement of the Taiwan-US 21st Century Trade Initiative’s launch in June 2022, including trade facilitation, good manufacturing practices, domestic regulations for service industries, anti-corruption, and small and medium-sized enterprises. This is a key step towards the completion of the Taiwan-US FTA using the building block approach. The first agreement is expected to be signed in the next few weeks. This agreement will represent the signing of the most comprehensive trade pact between the United States and Taiwan since 1979 when the US switched diplomatic recognition from the ROC (Taiwan) to the PRC.
The first agreement contains 81 articles, the key elements of which are as follows:
(1) The agreement declares that by coming to a high-standard and economically significant trade agreement, on which future priorities can be built.
(2) In the field of “trade facilitation,” make sure that customs procedures are efficient and transparent to simplify customs clearance and border inspection processes. Also, accelerate customs clearance through electronic methods to cut down on the time and expense of customs clearance for manufacturers.
(3) In the field of “good legal practice”, the central government should adhere to the principles of perfection and transparency when drafting laws and should consider how such legislation would affect SMEs.
(4) in the field of “domestic regulations for service industries”, the competent service sector authorities should use a reasonable, objective, impartial, and independent approach when issuing licenses to service sector operators.
(5) Taiwan and the US will cooperate in the “anti-corruption” field to combat and prevent bribery and corruption that harms international trade and investment, as well as to encourage community involvement. Both sides will also uphold their obligations under the UN Convention Against Corruption and the WTO Agreement on Government Procurement.
(6) With regard to SMEs, the two sides shall work together to improve business possibilities for SMEs and foster SME growth and employment on both sides, including through information exchange and ongoing communication channels.
(7) The agreement will include exceptions to the general exceptions, security exceptions, taxation measures, prudential measures in the financial sector, and indigenous peoples’ rights; both sides will establish contact points to exchange information on topics covered by the agreement.
(8) To resolve disagreements between the parties about the implementation of the Agreement and to govern the processes for amendment, entrance into force, review, and termination of the Agreement, a consultative mechanism will be developed.
There are still at least seven more issues to be negotiated in the future and the agreement will be expanded upon completion of the negotiations.