Taiwan signs trade deal with U.S. to cut tariffs, open markets (update)

Taipei, Feb. 13 (CNA) Taiwan and the United States signed a reciprocal trade agreement in Washington on Thursday, capping U.S. tariffs on Taiwanese goods at 15 percent and granting preferential market access for U.S. industrial and agricultural exports, including automobiles, beef, and pork.

Under the U.S.-Taiwan Agreement on Reciprocal Trade, the U.S. tariff rate on Taiwanese imports will be maintained at 15 percent, while Taiwanese semiconductors and related products will be granted the most favorable treatment under Section 232 of the Trade Expansion Act, according to Taiwan's Cabinet.

The 15 percent tariff matches the rates on goods from major U.S. trade partners such as Japan, South Korea, and the European Union.

An additional 2,072 Taiwanese items will also be exempt from reciprocal tariffs and will be subject only to the Most-Favored-Nation (MFN) tariff rate when imported into the U.S., the Cabinet said in a statement.

Of the 2,072 items, 261 are agricultural products such as Phalaenopsis orchids, tea, tapioca starch, coffee, pineapple cakes, guava, fruit juices, and mangoes, the Cabinet said. The 261 products account for 42 percent of Taiwan's agricultural export value to the U.S., bringing in US$374 million per year, it added.

The other 1,811 items are industrial products, with exports to the U.S. valued at US$9.56 billion annually and accounting for 36 percent of Taiwan's total industrial exports to the U.S., The Cabinet said. They include radio navigation equipment, communications instruments, lithium-ion batteries, pharmaceuticals, fertilizers, and light oil products, it said.

Meanwhile, Taiwan has agreed to eliminate or reduce 99 percent of its tariff barriers on U.S. industrial and agricultural imports, according to the Office of the United States Trade Representative (USTR). The list includes automobiles and auto parts, chemicals, seafood, machinery, health products, wheat, beef and beef products, dairy products, pork and pork products, lamb, ketchup, and peanuts, the office said.

"The Agreement on Reciprocal Trade is a testament to the importance of the U.S.-Taiwan relationship and reflects both sides' ambition to increase bilateral investment and commercial opportunities, deepen their high-tech strategic partnership, ensure supply chain resilience, and jointly promote stability and prosperity," the USTR said.

Taiwan's Cabinet said the trade agreement aims not only to establish a mutually beneficial economic and trade framework, but also to further build a "Taiwan-U.S. high-tech strategic partnership" centered on "technological innovation, supply chain resilience, and economic security."

The trade pact was signed in Washington by Taiwan's representative to the U.S., Alexander Yui (俞大㵢), and Ingrid Larson, managing director of the American Institute in Taiwan's (AIT) Washington Office.

Vice Premier Cheng Li-chiun (鄭麗君), Taiwan's top trade negotiator Yang Jen-ni (楊珍妮), U.S. Trade Representative Jamieson Greer, and U.S. Commerce Secretary Howard Lutnick presided over the signing ceremony.

Under the agreement, Taiwan has also agreed to remove quantitative restrictions on U.S. motor vehicles and accept those that meet U.S. safety and emissions standards, according to the USTR. Taiwan will also accept the U.S. FDA marketing authorizations for medical devices and pharmaceuticals manufactured in the United States, without additional requirements for importation, the USTR said.

In addition, Taiwan will resolve and remove non-tariff barriers to U.S. agricultural exports, including beef, pork, poultry, and processed potatoes, and will complete the regulatory process to allow the importation of bison meat, the USTR added.

The reciprocal trade agreement signed on Thursday followed nearly a year of trade negotiations between Taiwan and the United States and builds on agreements reached in mid-January. The agreement will now be sent to Taiwan's Legislature for review and approval.