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Dear Ambassador Portman:
Please allow me to extend my most sincere congratulations on your confirmation as the United States Trade Representative.
Taiwan and the U.S. have been fortunate to enjoy very extensive and close trade and investment relations for many years. The U.S. is Taiwan’s largest trading partner and the leading investor in Taiwan. Taiwan is the eighth largest trading partner overall of the United States. Since Taiwan’s accession to the WTO on January 1, 2002, the U.S. and Taiwan have had many opportunities to work together to advance the negotiations on the Doha Development Agenda. Taiwan continues to liberalize its tariff regime as a result of the concessions negotiated during our WTO accession. The U.S. and Taiwan have also worked together effectively in the Asia Pacific Economic Cooperation (APEC) forum to further trade liberalization and trade cooperation among APEC’s 21 member economies.
A matter of great importance to my government is the further expansion of Taiwan’s trade ties with the United States through the negotiation of a bilateral free trade agreement (FTA). I visited Washington, D.C. in December 2004 to propose the launching of FTA negotiations, and called on the Bush Administration, in its second term, to make the U.S.-Taiwan FTA a reality.
Studies have shown that a bilateral free trade agreement would be very beneficial for both the United States and Taiwan. For example, in its October 2002 report on prospects for a U.S.-Taiwan FTA, the U.S. International Trade Commission found that negotiation of an FTA between the United States and Taiwan would increase U.S. exports by 16%, or $3.4 billion annually, with particular gains in areas such as motor vehicles, rice, fish and other foods. Services will also show important gains, including in areas such as telecommunications, transport, financial services and education services. A report released in December 2004 by the Institute for International Economics (IIE) found that U.S. exports to Taiwan would grow by as much as $6.6 billion under a U.S.-Taiwan FTA, with overall gains in economic welfare surpassing those with a number of actual and prospective FTA partners that were also studied, notably Australia, Singapore, Chile, Morocco, the South African Customs Union, the Philippines, Indonesia and Botswana.
The future promises to bring with it many more opportunities for pursuing important economic interaction between Taiwan and United States. Taiwan and U.S. firms already carry out considerable collaboration in the information technology sector. U.S. firms have established research and development centers in Taiwan, which they can use as a base for expanding operations throughout the Asia Pacific. Taiwan has moved to put a strong regime of intellectual property rights protection in place, and our progress in this regard was recognized by the United States during the November 2004 meeting under our Trade and Investment Framework Agreement, and in January 2005 upon USTR’s completion of our out-of-cycle review under Special 301. Taiwan’s vast network of trade and investment ties throughout Asia, including in China, provide U.S. firms a ready means for pursuing new competitive opportunities in those markets. Consequently, I believe that expanded economic ties between the U.S. and Taiwan will pay dividends far beyond what we might now imagine.
I look forward to working with you as we explore new directions for broadening and deepening U.S.-Taiwan economic relations.
In closing, I would like to wish you a great success with your new duties at the Department of State.
Sincerely yours,
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