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Benefits of the US-Taiwan FTA » State by State
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Kansas  
Taiwan maintains close economic and trade relations with the U.S. According to U.S. statistics, bilateral trade between the two sides amounted to $61.2 billion in 2006. The value of U.S. exports to Taiwan reached $23 billion, of which Kansas accounted for $122.27 million. Still, there remain substantial opportunities for Kansan companies to expand their business and cooperation with Taiwan. In hopes of strengthening economic ties between the U.S. and Taiwan, including business opportunities for Kansas, Taiwan has been pushing for the signing of a U.S.-Taiwan Free Trade Agreement. If the U.S.-Taiwan FTA is signed, Kansan exports to Taiwan shall considerably increase. Having already recognized the benefits for the State of Kansas made possible by the U.S.-Taiwan FTA, the State Senate of Kansas passed the resolutions supporting it in 2005 and 2006.
Kansas is a major agricultural state, with farm production totaling $10 billion. Beef is the major one of Kansan exports in agricultural products, amounting to $6.1 billion in 2006. Indeed, Taiwan is one of Kansasˇ¦ most important markets for beef, accounting for 39% of total beef exports. Taiwan also remains the 5th largest importer of U.S. agricultural goods overall (the U.S. is the largest supplier of agricultural products to Taiwan) and in 2005 dispatched a procurement mission to nine major farming states. The procurement mission signed a letter of intent to purchase 14.5 million metric tons of grain and 6 million pieces of leather in 2006 and 2007. The value of the purchase is expected to reach $3.1 billion, $400 million more than the last purchase agreement signed in 2003. A report by the U.S. International Trade Commission on the impact of U.S.-Taiwan FTA also estimates that U.S. exports of vehicles and food products to Taiwan will increase by more than 100%. The auto and food industries of Kansas would enjoy immediate benefits from the signing of U.S-Taiwan FTA as a result of the elimination of tariffs on most agricultural and industrial products and an increased Taiwanese demand for U.S. products and services.
Kansas is also a leader in a variety of other industries. Utilizing its central location in the United States, Kansas has become a leader in the wholesaling, packing and assembling industries. The city of Wichita is also a well-known airplane-manufacturing center. Indeed, the aviation industry continues to be a core industry in Kansas, with companies like Spirit Aero Systems, Cessna, Raytheon, and Learjet maintaining operations in the state. Annual production in the Kansas aviation industry is around $6 billion, accounting for 5% of the GSP (Gross State Production) and providing 43,000 jobs. These important industries would benefit from tariff reductions and further liberalization made possible by a U.S.-Taiwan free trade agreement. The U.S.-Taiwan FTA will also create opportunities for Kansan businesses to both collaborate with Taiwanese companies and utilize Taiwan as a gateway to China and other Asian markets. Through joint ventures in high-tech industries, for example, Taiwan could become a major platform for Kansas companies to expand their reach into the Asia Pacific region. Indeed, Taiwanese companies continue to be leading forces of development in China in various fields as well as key investors in several emerging Southeast Asian countries, including Vietnam, Malaysia, Thailand, the Philippines and Indonesia. The signing of U.S.-Taiwan FTA would lead to closer investment and trade relations between the U.S. and Taiwan and, accordingly, Kansas and Taiwan. Garmin Co., a Kansas-based firm set up by a Taiwanese citizen, has already invested in Taiwan to build global positioning systems. There remains significant potential for Taiwanese enterprises to increase their human and capital investment in Kansas and vice versa. The U.S.-Taiwan FTA would provide the perfect vehicle for them to do so.
The level of trade between the U.S. and Taiwan far exceeds that between the U.S. and many of its FTA signatories. Looking at U.S. trade with FTA signatories such as Jordan and Morocco, for example, the U.S.-Taiwan trade level is 38 and 50 times greater, respectively. For the people of Kansas and its businesses, the strengthening of Taiwanˇ¦s existing relations with the U.S. would translate into real and immediate benefits. In conclusion, it is clear that signing the U.S.-Taiwan FTA would be good for Kansas and good for America.
As of April 2007, the U.S.-Taiwan FTA proposal has been endorsed by a total of 64 legislatures in 38 states, the Council of State Governments and the National Association of Secretaries of State. Given the great benefits to the State of Kansas made possible by the U.S.-Taiwan FTA, we hope that the administration, the Senate and the House of Representatives and the private sector of the State of Kansas can further promote it, so that the enormous economic potential that exists between Kansas and Taiwan may be fully realized.
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