Greenbacks and New Taiwan dollars. Photo: Twitter
According to experts, the US economy is not about to fall into recession. Photo: Twitter

Two former US envoys in Taiwan have joined calls from a US congressional committee for Taiwan to enter a free trade agreement (FTA) with the US. Failing to do so, they say, would place the self-governed island’s economy and trade at Beijing’s mercy.

Stephen Young and William Stanton, both former directors of the American Institute in Taiwan, Washington’s de facto embassy on the island, made the call on Sunday at a Taipei forum on Taiwan-US relations co-hosted by the Taiwan Thinktank and the Washington-based Global Taiwan Institute.

This year’s event focused on how Taiwan and the US can work together to face China’s power, the island’s semi-official Central News Agency reported.

Young told the panel that as China’s power grows, in addition to finding a “more creative approach to support Taiwan’s military needs” and encouraging visits by senior US officials under the newly-enacted Taiwan Travel Act, the US and Taiwan should renew efforts to nail down an FTA at an early date.

Young also called into question Taiwan’s import restrictions on US pork and certain beef products, which have long been seen by Washington as a major hurdle in trade relations impeding the signing of a Trade and Investment Framework Agreement.

Stanton concurred with Young’s view, adding that an FTA with Taiwan could be of strategic significance to the US, even if the America’s trade volume with Taiwan may not take up a substantial share of its total.

“If you look at the history of the US’ FTAs, the very first FTA we had was with Israel. Was it because we thought Israel was an important economic partner? Or why did we have an FTA with Morocco or Jordan? Was it because they were important economic partners? No, it was … for strategic reasons,” he said.

“In the same vein, the US needs to think more strategically about Taiwan, not just simply [about] the need to export more pork or beef to the island.”

Nien Su, former chief economic adviser to the US House of Representatives Committee on Foreign Affairs, said that with the strong bipartisan support that Taiwan enjoys, free trade could be the next area after defense cooperation for both sides to work on. However, noted Su, the Tsai Ing-wen administration first needs to give a clear signal of intent to the US.

Taiwan and the US should make free trade a priority next year so as to achieve positive progress on related negotiations or any type of agreement before 2020, when Tsai’s term ends, to “avoid another missed opportunity”, according to Su.

However, Project 2049 Institute executive director Mark Stokes, a former Pentagon official who served as senior country director for Taiwan and China, advocates the pursuit of a fair-trade agreement instead.

Trade in goods between the US and Taiwan accounted to US$68.2 billion in 2017, with the US recording a deficit of US$16.7 billion,  according to the US Census Bureau, while the US recorded a surplus of US$32.6 billion in its trade dealings with Hong Kong during the same period.

Taiwan continues to enjoy normal trade relations status granted by the US, as well as barrier-free, ready access to the US market. In recent years, the AIT’s commercial dealings with Taiwan have focused on expanding market access for American goods and services on a reciprocal basis.

Taiwan acceded to the WTO in 2002 as a “Separate Customs Territory of China: Taiwan and its outlying islands” (referred to as “Chinese Taipei”) despite its disputed status with the mainland.

Read more: Former US envoy says Hong Kong serves as a lesson to Taiwan