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US-Taiwan Trade Relations: Alliance Based on Trade Policy
The Building Block of a Trade Policy

Taiwan was formerly known as Formosa. It is the main island of the Republic of China. Its humble beginnings marked a very good signal for its future trade. Agriculturally, Taiwan is self-sufficient under the Chinese rule. After the 17th century, Taiwan was under the Japanese rule and was developed by the latter as a rice-exporting colony. It was further tapped to be the supplier of sugarcane, bananas, pineapples, raw materials and tea for Japan.

Industrialization of Taiwan started in 1949 and by the year 1980's it was already considered a modern nation. Bulk of its work force is comprised by highly competent and trained individuals who made several industries flourish for the nation. The major products seen on the land are textiles, electronics, clothing, toys, footwear, ships and handicrafts brought by tradition. The principal crop of the country is rice while the livestock is primarily boosted by water buffalo, pig, poultry and chicken. Fishing was also a favorable way of living for the Taiwanese.

As Taiwan enjoys its economic standing, the US was just behind to support the concerns of this Asian nation. In fact, the alliance became even more fortified with the possibilities of a free trade agreement. The trade policies followed by the American government were also considered by Taiwan in its own economic issues. Political stability was also one of the reasons that tied the two nations together.

Before actually coming up with a free trade agreement, several seminars were attended by participants from both governments. This created proper positioning of the objectives of open markets. This also created a positive impact to the participants. The good thing with this is that both nations encouraged the membership of industry representatives as well as scholars in order to come up with vital and concrete ideas that can be put into reality. From then on, the two nations moved forward together.

Major Imports and Exports Between the Two Nations

The major products exported by Taiwan to other members of world trade are computer products and electrical equipment, metals, textiles, plastics, rubber products and chemicals. Its main export trading partners are China, Hong Kong, US and Japan. The products that Taiwan imports from other lands are machinery and electrical equipment, minerals and precision instruments. The major suppliers are Japan, China, US, South Korea and Saudi Arabia.

The United States ranks third among the export partners and suppliers of Taiwan. This was furthermore seen in the records of the US Census Bureau which is responsible for providing trade balances between two nations. Besides this fact, it also has records for goods traded between the US and other countries in the world. For the ten-month period ending October 2008, US exports to Taiwan amounted to as much as $22.54 billion while US imports to the said country is $30.98 billion. Here are the records that the bureau tracked for the trade between these two nations in 2007:

  • Taiwanese Exports to US. Exports coming from Taiwan sold by US amounted to a total of $38.30 billion in 2007. Out of this total amount, semiconductors and related devices made sales of $4.52 billion which is equivalent to 11.80% of the year's total. Included on top of the list were: computer accessories, peripherals and parts; telecommunications equipment; television, VCR's and other video equipment; clocks, portable typewriters and other household goods; other parts and accessories; electric apparatus and parts; advanced iron and steel manufactures; toys, shooting and sporting goods and bicycles; and other industrial machinery. Other industrial machinery made sales of $974.46 which is 2.65% of 2007's total.
  • Taiwanese Imports from US. For the year 2007, the total amount for imports from US to Taiwan was $26.36 billion. Of this total, semiconductors made it to the top with sales amounting to $4.58 billion or 17.37% of the year's total. Joining semiconductors on the list were: other industrial machines; organic chemicals; civilian aircraft; measuring, testing and control instruments; corn; soybeans; steelmaking materials; telecommunications equipment; and plastic materials. Plastic materials were sold for $556.22 million which is equivalent to 2.11% of 2007's total.
  • Fastest-Growing US Exports to Taiwan. The trade relations between these two nations were supported by remarkable sales of goods in their respective markets. One good example is the percentage increase in sales of goods coming from US to Taiwan. On this note, fuel oil topped the charts in 2007 with sales of $9.10 million equivalent to an increase of 3,972.49% from 2006 to 2007. Other goods sharing the status of fuel oil were: natural gas liquids; oilseeds and food oils; records, tapes and disks; and steelmaking materials. Steelmaking materials made it on the list with the sales of $745.97 million which is higher by 292.13% than in 2006.
  • Fastest-Growing US Imports from Taiwan. As goods from Taiwan were entering the boundaries of the United States, remarkable statistics were also recorded. Sales percentage increased by thousands with records, tapes and disks topping the list. The said commodities were sold for a total of $558.83 million which increased by 897% from 2006. Other goods included along this line were: cotton, wool and other natural fibers; other commercial vessels such as barges and tugboats; other military equipment; and footwear of leather, rubber or other materials. The last products earned total of $193.99 million which is equivalent to an increase of 346% from 2006.
Trade Agreements between the Two Nations

Despite not being able to focus on the long overdue US-Taiwan Free Trade Agreements, there were several pacts made to enhance the business opportunities between these two nations. All of the treaties concentrated on the various aspects of trade. Some of the unforgettable pacts made between these two nations are:

  • Taiwan Agreement on Export Performance Requirements. This particular agreement focused on the automotive sector. It further signified Taiwan's desire to meet the investment requirements along this line. It also paved the way to the removal of export performance requirements that affect the area.
  • Taiwan Agreement Concerning Trade Matters. This is one of the bilateral trade agreements entered into by the two nations. This is concerned with the reduction of tariffs on exports coming from Taiwan by the US authorities. In the same manner, products coming from the US bound for Taiwan will also benefit from the rules of this trade. This enhanced bulk of the export concerns of the two countries.
  • Taiwan Friendship, Commerce and Navigation Treaty. This is a pact primarily concerned with the aspects of strengthening the bonds of camaraderie and commerce between the two nations. It was entered into force November 30, 1948 after its signing on November 4, 1946. Cultural, spiritual and economic concerns were vitally discussed. Copyright relationships were also part of the mainframe of this act. The elimination of discrimination was also very important not only for the nationals but also for companies doing business on each of the grounds of the contracting parties.
Trade Disputes between the Two Nations

The many trade agreements entered into by Taiwan and the US was not sufficient enough to eliminate the trade barriers between the two nations. Not even the actual talks were seen to penetrate the trade disputes. Different issues needed to be settled including agricultural issues, pharmaceutical concerns, intellectual property rights and investment matters.

There were different conflicts involved in the rules of trade. The primary issue that needs to be tackled is on taxation. Double taxation on products entering Taiwan was a big concern that has to be settled. This was always said to be a hindrance in any trade relations. Despite the desire of the nations to come up with a core trade agreement, there were things that were neglected along the way.

The good thing behind this matter is the fact that there were no disappointments felt by the government officials. They have hoped that further talks will open a way to settle the conflicts and lead them to a better trade relationship. There may no be concrete results of the discussions but they believe that the future has much more in store.

The Future of Free Trade between the Two Nations

Since there is still a pending US-Taiwan Free Trade Agreement, other things are deemed to happen in the future. While officials of both governments focus on improving their trade status and agreements, there will soon be a gateway to better standing in world trade. The blockades of the present are temporary as they are considered spices to the alliance.

The statistics gathered and recorded by the US Census Bureau are good indicators of a flourishing future for the two countries. With a huge amount of imports and exports coming from and going to the territorial jurisdictions of Taiwan and US, an increase will surely be seen ahead. This will bring hope to the benefits that each side will derive. The good spirit and mindset of the individuals who want to achieve prosperity is a signal that will bring the divided issues into one common goal.

US-Taiwan Trade References

Note: Trade statistics, industry links, economic projections and global business resources on this page have been compiled from hundreds of trade related websites, government guides and resources on the Internet. We provide this valuable information for industrial suppliers, manufacturers, exporters and importers seeking to enter or expland business opportunities in Taiwan.


Market Research

The dominant political issues continue to be the relationship between Taiwan and China, as well as domestic political and economic reform. The country has a dynamic capitalist economy with gradually decreasing guidance of investment and foreign trade by government authorities

Primary Trading Partners

Major Goods Exported

Major Goods Imported

Industrial Outlook

While Taiwan is a major investor throughout Southeast Asia, China has become the largest destination for investment and has overtaken the US to become Taiwan's largest export market.

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