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Benefits of the US-Taiwan FTA » State by State
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Louisiana  
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 Louisiana accounted for $331.31 million. Still, there remain substantial opportunities for Louisiana 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 Louisiana, Taiwan has been pushing for the signing of a U.S.-Taiwan Free Trade Agreement. If the U.S.-Taiwan FTA is signed, Louisiana・s exports to Taiwan shall considerably increase. Having already recognized the benefits for the State of Louisiana made possible by the U.S.-Taiwan FTA, the State Senate and the State House of Representatives passed resolutions supporting it in 2005 and 2006.
Louisiana is an important agricultural state, producing sugarcane, fish, rice, soybeans, cotton, beef, cherries, potatoes, corn, and strawberries and accordingly ranks among the top ten U.S. producers of cotton, sugarcane, potatoes, rice and the 2nd largest producer of fishery products in the U.S. Louisiana・s agricultural, forestry and food industries add $13 billion to the state・s production, or 10% of the GSP (Gross State Production), while the food processing industry accounts for 14% of Louisiana・s total exports. Taiwan remains the 5th largest importer of U.S. agricultural goods (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 these purchases 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 a U.S.-Taiwan FTA estimates that U.S. exports to Taiwan of rice, fishery products and other foods will increase by more than 100% with the signing of U.S.-Taiwan FTA. As a result, Louisiana rice and fishery industries would enjoy immediate benefits from the signing of U.S.-Taiwan FTA, which would eliminate tariffs on most agricultural and fishery products and increase Taiwanese demand for U.S. products and services.
Louisiana is also a leader in a number of other industries. It is the 2nd largest U.S. producer of petrochemical products, with output valued at $19.6 billion, making the state the 2nd biggest producer of gasoline and natural gas in the U.S. The Department of Louisiana Economic Development is also working to create industry clusters in advanced materials, durable goods/manufacturing, energy/oil and gas, agricultural/forest and food processing, entertainment, ICT, life science/biotechnology, logistics and petrol-chemical and environmental protection under its Louisiana Vision 2020 Project. All of these industries would benefit from tariff reductions and further liberalization made possible by the U.S.-Taiwan FTA. The U.S.-Taiwan FTA will also create many opportunities for Louisiana 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 Louisiana companies to expand their reach into the Asia-Pacific region. Indeed, Taiwanese companies continue to be a leading force for 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, Louisiana and Taiwan. Currently, Taiwanese companies have invested in Louisiana・s petrochemical, plastics and prospecting sectors, with Formosa Plastics and Nan Ya Corp. representing the country・s biggest investors in the state. Still, there remains significant potential for Taiwanese enterprises to increase their human and capital investment in Louisiana 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 Louisiana and its businesses, the strengthening of Taiwan・s economic relations with the U.S. would translate into real and immediate benefits. In conclusion, it is clear that the signing of U.S.-Taiwan FTA would be good for Louisiana 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 Louisiana made possible by the U.S.-Taiwan FTA, we hope that the administration, Senate and House of Representatives and the private sector of the State of Louisiana can further promote it, so that the enormous economic potential that exists between Louisiana and Taiwan may be fully realized.
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