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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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INFORMATION TECHNOLOGY and TAIWAN  
A Partner for Growth: An FTA will enhance an already strong and dynamic partnership.
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To tap the emerging global market for digital consumer electronics, U.S. companies can leverage Taiwanˇ¦s unique position and advantage in original design manufacturing (ODM). Taiwan has demonstrated to the world that it has successfully transformed into an ODM from OEM (Original Equipment Manufacturing), which means that it is no longer just a manufacturing base but a research and development center. U.S. information technology companies that plan to enter the digital consumer products market or want to keep their leading status in the sector will benefit from Taiwan's ODM strength.
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By virtue of its management and ownership of production capacity in Mainland China, Taiwan is also positioned as an indispensable Original Equipment Manufacturing (OEM) partner to the U.S. IT sector. These companies build component products, such as modems, scanners, and LAN cards, specifically designed to fit with larger products made by U.S. firms. This OEM partnership exists between Taiwan and virtually the entire brand-name tier of the U.S. IT industry.
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Taiwanese partners are well positioned to grow and innovate with U.S. businesses as their partnerships expand: 12 information technology (IT) products from Taiwanese companies held the ranks of the largest or second largest market shares in the world, according to the Institute for Information Industry (III). Routers posted the biggest share at 89.2%, followed by WLAN products, motherboards and notebook computers.
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The partnership goes both ways, as Taiwan heavily relies on the U.S. for computer services and software, where a strong reputation has allowed U.S. businesses to dominate the market. In 2005 Taiwan imported $1.99 billion worth of computer services and software, and the U.S. supplied over 80% of that total. That equates to over $1.5 billion of high-tech U.S. exports. The production value of Taiwanˇ¦s computer systems amounts to over $40 billion per year, and continues to post strong growth. During the first half of 2005, production value increased over 20%, according to statistics from the Market Intelligence Center.
A Unique Opportunity: An FTA will allow U.S. companies to increase access to all of Asia.
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Taiwan offers a high value research and development base from which U.S. companies can integrate with all of Asia. Taiwan is effectively leading the global integration of Chinaˇ¦s high-tech economy into established global supply chains, and the technology and capital of the U.S. should be a part of this process.
THE NUMBERS
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Taiwanˇ¦s computer product exports are expected to grow 10-20%
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The lucrative personal computer sector commands 58% of the production value in Taiwan
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Computer services and software are one of the leading sectors for growth of U.S. exports to Taiwan, according to a report by the U.S. Commerce Department
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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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