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Benefits of the US-Taiwan FTA » State by State
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California  
Taiwan has close economic relations with California. In 2006, California exported $5.64 billion worth of products to Taiwan, making Taiwan its 6th largest export market. Leading exports to Taiwan include computer and electronic products, machinery, chemicals and transporation and equipments. In order to further strengthen the trade and investment relationship between California and Taiwan, Taiwan is actively promoting the signing of a U.S. and Taiwan Free Trade Afreement (U.S. ¡V Taiwan FTA). We are pleased to see that the California Senate and House of Representatives passed a resolution in support of U.S. ¡V Taiwan FTA in 2007.
California¡¦s main industries include semiconductors, electronics and computers, digital content, nanotechnology, biotechnology, information technology and agriculture. Taiwanese companies have invested in California in the computer electronics, biotech, trade services and hotel sectors. It is estimated that there are over 1,400 Taiwanese companies in California, which is the highest number among all the states in the U.S. Taiwan is devoted to developing digital content, biotech, and nanotech industries, areas in which California is a global leader. From many existing cases, we can see that Taiwan¡¦s business sector plays the role of integrating business activities in the golden triangle of China, Taiwan and the U.S., because of our proximity to China, our sharing of a similar cultural background and common language with China, and our having the same business mindset as the Americans.
If a Taiwan-U.S. Free Trade Agreement (U.S. ¡V Taiwan FTA) is signed, it shall certainly prompt bilateral investment and enhance cooperation between these two countries. In other words, tariff reductions and greater trade facilitation would help California increase exports to Taiwan and promote bilateral cooperation particularly in the area of high-tech R&D. In 20063, Taiwan imported $18473 million worth of agricultural products from California, making Taiwan the 7th largest buyer of such products. The major imports items are cotton, rice, peaches and nectarines. With an FTA in place, the tariff rates on the majority of agricultural and industrial products will fall to zero. This would not only help stimulate industrial development in California, but also help California¡¦s products and services enter Asia-Pacific markets via Taiwan.
The service industry has becoming increasing important to Taiwan¡¦s economy. The government is developing several strategic service industries and taking steps to protect IPR. We would like to invite Californian companies to again take the lead and invest in new growth areas, such as information services, environmental services and financial services. In 2005, Taiwan was removed from the U.S. Special 301 Priority Watch List. We are also making great efforts to enhance public and students¡¦ awareness about the importance of respecting intellectual property rights.
Convenient air transportation between Taiwan and California promotes not just international trade and investment, but also promotes tourism and education. California has one of the largest populations of overseas Taiwanese and they contribute a lot to the local community development. We hope that the benefits resulting from U.S. ¡V Taiwan FTA will further enhance this special relationship. In addition, the benefits from U.S. ¡V Taiwan FTA are expected to be greater than those from existing FTAs between the U.S. and Jordan or Morocco because U.S.¡¦ trade with Taiwan is much greater than that with either of those two countries.
The U.S.¡¦ conclusion of the bilateral free-trade agreement negotiations with South Korea on April of 2007 has had a very strong impact on Taiwan and other countries in the region. Both Taiwan and Korea are large and advanced economies. In 2006, Korea and Taiwan were the United States' 7th and 9th largest trading partners. From a commercial perspective, if Korea can offer a huge potential opportunity for the U.S., Taiwan will be able to do so, too. Moreover, most Taiwanese products are in head-to-head competition with those of Korea in the U.S. market. We worry that Taiwan will lose out in the U.S. market as soon as the Korea-U.S. FTA comes into effect. Taiwan has a unique geographical location in the Asia Pacific region and a long-term partnership with the U.S. For our mutual benefits and America¡¦s strategic interests in this region, we hope to launch the negotiation with the U.S. as soon as possible.
Taiwan has been promoting the U.S. ¡V Taiwan FTA and, as of April 2007, the U.S. ¡V Taiwan FTA proposal has been endorsed by a total of 64 legislatures of 38 states, the Council of State Governments and the National Association of Secretaries of State. Givent the benefits to the State of California and Taiwan made possible by U.S. ¡V Taiwan FTA, we hope that the administration, Senate and House of Representatives of the State of California will support Taiwan¡¦s proposal to sign U.S. ¡V Taiwan FTA to the Bush Administration.
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