First Taiwan-U.S. trade deal could serve as model for others: Scholars

Taipei, Dec. 11 (CNA) The implementation of a trade deal between Taiwan and the United States is expected to have a "ripple effect" on Taiwan's other trading partners considering bilateral trade deals, Taiwanese scholars said Tuesday.

On Tuesday, Taipei and Washington announced that the first agreement under the Taiwan-U.S. Initiative on 21st-Century Trade had officially been implemented.

Three Taiwanese scholars told CNA later that day that the deal could influence others considering striking a similar agreement with Taiwan and further the country's bid to join regional trade blocs.

National Taiwan University Department of Political Science associate professor Chen Shih-min (陳世民) called the deal "a significant breakthrough in Taiwan's foreign relations."

Chen said the European Union, Southeast Asian countries and Japan all have close relations with Taiwan but are hesitant to sign similar deals due to a lack of diplomatic relations.

Kuo Yu-jen (郭育仁), a professor at the Institute of China and Asia-Pacific Studies at National Sun Yat-sen University, said the deal is expected to have a "ripple effect" and could even boost Taiwan's chances of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a regional trade bloc.

Raymond Sung (宋承恩), vice president of the government-funded Prospect Foundation, said the first agreement under the initiative established the necessary infrastructure for the development of economic integration between the two sides.

Sung noted that the CPTPP, one of the world's biggest trade blocs representing around 15 percent of the global economy, places high importance on such infrastructure, meaning the deal could increase Taiwan's chance of joining.

During an annual summit in Vancouver held late last month, CPTPP members failed to initiate Taiwan or China's accession process.

Instead, CPTPP members decided to launch the process for Costa Rica, which applied to join the bloc in August 2022, a year after Taiwan and China.

Meanwhile, Kuo and Sung both said it was unlikely that the incoming Donald Trump administration would overturn the Taiwan-U.S. deal.

Sung said Trump is expected to focus on balancing the trade deficit between the U.S. and its trading partners, but that the first agreement under the Taiwan-U.S. initiative focuses more on building a legal structure to promote a sound environment for trade.

Sung also said he believes Taiwan has enough leverage to face the second Trump administration even if the latter is shifts on policy, without elaborating.

Kuo told CNA that Trump was unlikely to overturn the deal because it did not specifically relate to the trade deficit issue that the President-elect is hoping to tackle.

The total value of goods and services traded between the U.S. and Taiwan was an estimated US$160.0 billion in 2022, according to data from the Office of the U.S. Trade Representative (USTR).

The data showed that U.S. exports were valued at US$54.5 billion, while imports were US$105.5 billion, meaning America's trade deficit with Taiwan stood at US$51.0 billion in 2022.

Taiwan and the U.S. launched the Initiative on 21st-Century Trade on June 1, 2022.

The first agreement under the initiative is an important "building block" toward future free trade agreements, Taiwan's Office of Trade Negotiations (OTN) said in May 2023, calling it the "most comprehensive" deal agreed between the two trading partners since 1979.

The agreement covers commitments to customs administration and trade facilitation, regulatory practices, rules for running domestic service industries, anti-corruption and small- and medium-sized enterprises, according to the OTN.

The USTR also issued a statement on Monday (Washington time) confirming that the initial agreement had come into force.

According to the USTR statement, the U.S. and Taiwan have been making progress on a second agreement under the initiative which covers areas including labor, the environment and agricultural matters. Discussions are ongoing.