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Benefits of the US-Taiwan FTA » Sector by Sector
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A United States-Taiwan Free Trade Agreement (FTA) will enhance the strong relationship between our two democratic countries by expanding trade and investment, promoting economic security, and creating new opportunities for workers and businesses in the US and Taiwan.
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FINANCIAL SERVICES and TAIWAN  
A Partner for Growth: An FTA will enhance an already strong and dynamic partnership.
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The economy of Taiwan possesses a large manufacturing sector¡X4.25 times larger than Singapore, a current US FTA partner¡Xand a number of capital and technology intensive components. These huge amounts of funds required by these industries helps form a major capital market in Taiwan, in which both local and foreign financial institutions are eager to participate.
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Foreign investment in financial and insurance companies in Taiwan shot up an impressive 99.7% to $1.62 billion in 2005 compared to 2004. The securitization market in Taiwan is expected to increase more than four times to reach around $15.6 billion or NT$500 billion in the next three years.
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The financial services sector is an area of U.S. comparative advantage and offers some of the most significant gains from a U.S. Taiwan FTA, according to a report by the Institute for International Economics (IIE).
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The service sector now accounts for 73% of Taiwan¡¦s GDP. Services will be the source for the future growth of Taiwan¡¦s economy. The Taiwanese government is currently undertaking a campaign to increase foreign investment in the rapidly growing sectors of financial services, telecom, express delivery, and health care. A US-Taiwan FTA will allow the US to be the first country to access Taiwan¡¦s services market on a preferential basis. Given the strength of US services companies, these firms will enjoy leading roles in Taiwan¡¦s economy as a result of the FTA.
A Unique Opportunity: An FTA will allow U.S. companies to increase access to all of Asia.
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Financial reforms took an important step forward with the establishment of the Financial Supervisory Committee (FSC) on July 1, 2004. The FSC is charged with monitoring the financial markets and is an important measure for ensuring the long-term profitability of the financial markets of Taiwan. Taiwan has reformed its financial sector faster than required, demonstrating a dedication to true liberalization of the sector, according to the National Trade Estimate Report by the USTR.
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Taiwan occupies a pivotal position in the vast network of trade and investment in the East Asia region. The dynamic trading vitality and increasing outward investment orientation of economies in Asia Pacific give rise to a substantial demand for financial services.
Regional Financial Services Promotion Plan
This plan, created in 2004, demonstrates Taiwan¡¦s commitment to the creation of an open and profitable financial services sector.
Targets under this plan include:
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Raising the financial services industry's GDP contribution to 13% by 2008.
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Increasing foreign shareholding in the local stock market to 25%.
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Growing the total asset value of financial institutions by 30%.
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THE NEXT LOGICAL STEP: A U.S.-Taiwan FTA holds great promise for both U.S. and Taiwanese companies and workers. The agreement will bring with it new dynamism that will keep U.S.-Taiwan economic relations vital and strong. We look forward to working together with you to make this historic agreement a reality.
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