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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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AUTOS and TAIWAN  
A Partner for Growth: An FTA will enhance an already strong and dynamic partnership.
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The current tariff and non-tariff barriers to automotive trade in Taiwan have restricted U.S. access to a lucrative potential market. In the wake of these restrictions on U.S. access to the Taiwan market, Japan has filled the void, providing 70% of Taiwanˇ¦s 4.7 million passenger vehicles.
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Negative effects on the U.S. auto market will be minimal due to the fact that Taiwan is not a major world producer that producies vehicles that conform to the standards of neighboring export countries. Taiwan produces 269,000 vehicles a year compared to the 11.4 million that are produced domestically. These vehicles are primarily designed for domestic and regional markets, and do not pose a significant threat to U.S. auto manufacturers.
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Automobile exports to Taiwan will rise by $441 million, and worldwide by $369 million, while increasing overall sector output growth by only .1 percent. The favored access to the Taiwan market will allow U.S. auto manufacturers to undercut their Asian rivals in Japan, Korea, and ASEAN+3.
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It is important to take advantage of the current trade situation that exists in Taiwan. Presently, Taiwan restricts the importation of motor vehicles and auto parts from mainland China. A loosening or lifting of this ban, or an agreement with neighboring Asian countries will undoubtedly erase any advantages that U.S. auto manufacturers may gain.
A Unique Opportunity: An FTA will allow U.S. companies to increase access to all of Asia.
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Taiwan also 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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The U.S. motor vehicle and parts sector stands to grow by $629 million, an increase of 400 percent under a U.S.-Taiwan FTA.
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Under a US-Taiwan FTA, US auto manufacturers will be exempt from onerous quota restrictions and debilitating 17.5% tariff that they are currently facing.
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The motor vehicle and auto part industry will contribute to an overall $369 million trade surplus under the agreement.
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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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