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Benefits of the US-Taiwan FTA » State by State
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Maryland  
Taiwan and the United States share important economic relationships: Bilateral trade has increased steadily over the past 40 years or so, with especially marked growth in the past decade. The United States is now Taiwan・s 3rd largest source of imports (after Japan and China), while Taiwan is the 9th largest trading partner of the United States, its 11th largest export market overall and the 5th largest destination for U.S. agricultural products. In 2006, trade flow between Taiwan and the United States totaled $61.2 billion.
As of the end of 2006, U.S. investment in Taiwan reached $15 billion, making the U.S. Taiwan・s leading foreign investor. U.S. investments in Taiwan are concentrated in the manufacturing sector, especially in electronics and chemicals. Other sectors U.S. companies have invested in include wholesale trade, finance, insurance, and real estate. The U.S. represented the 2nd largest destination for Taiwan・s $8.9 billion foreign direct investment in 2006. Taiwan・s investments in the United States are centered on the computer, electronics and electrical appliances, plastics and rubber, and chemical products industries.
The U.S.-Taiwan Free Trade Agreement will increase Maryland・s exports to Taiwan. In 2006, Maryland・s exports to Taiwan totaled $62 million. The leading exports include chemicals, machinery, computers and electronics, waste and scrap, and transportation equipment. According to a report released by the U.S. International Trade Commission in 2002, the elimination of tariffs and other trade barriers under the U.S.-Taiwan FTA would result in significant gains for Maryland・s leading industries, including a 7% increase in American exports of electronics to Taiwan, a 17% rise in machinery and other equipment exports and an 11% growth in trade of chemicals and other products with Taiwan. Maryland and Taiwan have long enjoyed strong and mutually beneficial trade and investment relationship. We strongly believe that the U.S.-Taiwan FTA will build upon this foundation, bringing not only important market access opportunities for Maryland exports to Taiwan but also a platform for Maryland businesses to extend their reach into the dynamic Asia-Pacific region.
The U.S.-Taiwan FTA will create opportunities for investment and technical cooperation. In order to further develop bilateral trade and investment opportunities, the State of Maryland set up a Business Center in Taipei in February 2000. To announce the arrival of a new director -- Mary Ann Wo -- for the Business Center in August 2005, Maryland・s Department of Business & Economic Development noted, ：Throughout the past 16 years, Maryland and Taiwan have shared a common interest in key industries, such as biotech, life sciences, information technology, telecommunications, electronics, and defense/aviation. There are enormous opportunities that Maryland and Taiwan can develop together to support business and economic development.； The U.S.-Taiwan FTA is an ideal vehicle to achieve these goals. Through the easing of restrictions and the increase of openness between the two economies, the U.S.-Taiwan FTA provides both Taiwan and the State of Maryland with many opportunities for investment and technical cooperation in emerging technology fields.
The U.S.-Taiwan FTA will bring both immediate and long-term significant benefits to Maryland businesses. Some industry-specific examples are listed below:
1) Opening markets for Maryland・s chemicals exports: Chemicals are Maryland・s leading export, with $1.4 billion in sales around the world in 2006. Taiwan currently imposes, on average, a 5% tariff on chemical goods imports. Under the U.S.-Taiwan FTA, Taiwan would eliminate duties on chemical goods, providing Maryland chemical companies with new export opportunities to the Taiwanese market
2) Opening markets for Maryland・s autos and auto parts: Transportation equipment is a key export of Maryland to Taiwan, with nearly $3.1 million in sales in 2006. At present, Taiwan levies an average import tariff of 30% and 10% on autos and auto parts, respectively. The U.S.-Taiwan FTA will eliminate these duties, opening up the Taiwanese market to Maryland・s top exports.
3) Opening markets for Maryland poultry: Poultry is the leading source of Maryland・s farm cash receipts and exports. U.S. poultry exports currently face duties as high as 20% on both fresh and frozen products to Taiwa U.S.-Taiwan FTA will directly result in increases in exports of poultry from Maryland by allowing Maryland farmers duty-free access to Taiwanese consumers.
4) Opening markets for Maryland dairy products: The dairy products industry is the second largest source of Maryland・s farm cash receipts. Taiwan currently levies a $0.26 per pound import duty on dairy products from the U.S. Under U.S.-Taiwan FTA, Taiwan・s tariffs on dairy products will be eliminated, increasing Maryland・s exports to Taiwan・s market.
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. We hope that the administration, the Senate and the House of Representatives of the State of Maryland will similarly convey strong support for U.S.-Taiwan FTA to the Bush Administration to enhance the economic benefits for both Maryland and Taiwan.
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