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Benefits of the US-Taiwan FTA » State by State
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Massachusetts  
The United States and Taiwan share close economic and trade relationships. According to U.S. statistics, in 2006 trade volume between Taiwan and the U.S. reached $61.2 billion. Taiwan and Massachusetts also maintain a close bilateral relationship. Massachusetts・ exports to Taiwan amounted to a total of $749 million in 2006. Massachusetts・s major exports to Taiwan include computer and electronic products, non-electrical machinery, and electrical equipment, appliances and component. In hopes of strengthening economic ties between the U.S. and Taiwan, including business opportunities for Massachusetts, Taiwan has been pushing for the signing of a Taiwan-U.S. Free Trade Agreement (The U.S.-Taiwan FTA). We welcome and applaud the consecutive passing of resolutions by the Massachusetts・ Senate and the House of Representatives from 2004 to 2007 in support of the U.S.-Taiwan FTA.
Massachusetts is one of the major centers for high-tech industries. Along both sides of Highway 128, the Silicon Village of the East Coast, there are many high-tech companies in the information, telecommunication, biotech, healthcare, and financial services sectors. Massachusetts・ output reached $325 billion in 2005, with 4.5% of that invested into R&D. This is one of the most important engines for the vigorous spurring of Massachusetts・ exports and maintaining the state・s leadership in the high-tech industry. According to WISERTrade, Massachusetts・ total exports reached $24 billion in 2006, of which 40% were high-tech products. The state exported another $3.7 billion in biotech, pharmaceutical, and life sciences related products, accounting for a combined 55% of Massachusetts・ total exports. Massachusetts and Taiwan share a similar direction in terms of their industrial development and accordingly have many areas for potential collaboration. Most Taiwanese businesses in Massachusetts are involved in high-tech industries such as biotech, medical devices, information, and telecommunications. The signing of the U.S.-Taiwan FTA would increase Massachusetts・ high-tech exports to Taiwan and create more opportunities for bilateral investment and technical collaboration through tariff reduction and trade facilitation measures. Furthermore, issues involving intellectual property rights protection, a major concern for the high-tech industries, would be fully negotiated and covered under the U.S.-Taiwan FTA.
Specifically, electrical products, electronics, and machinery equipment are Taiwan・s major imports from the U.S. The immediate benefit of signing a Taiwan-US FTA would be the reduction of tariffs on most industrial products to zero, which would facilitate U.S. exports to Taiwan. The major export items of Massachusetts include computer and electronic products, chemicals, non-electrical machinery, miscellaneous manufactured commodities, and electrical equipment, appliances and component, all of which would benefit from the U.S.-Taiwan FTA. In particular, 25% of Massachusetts・ manufacturing employment is supported by exports, much higher than the national average of 20.5%, making Massachusetts the state which is the 4th most reliant on exports among all 50 states. Increasing exports would mean more employment and bring benefits to Massachusetts・ high-tech oriented economy. The U.S.-Taiwan FTA would provide the perfect vehicle for that.
The U.S.-Taiwan FTA will also create many opportunities for Massachusetts businesses to both collaborate with Taiwanese companies and utilize Taiwan as a gateway to China and other Asian markets. The entire world is watching the development of the Chinese market, but the reality is that economic reforms are still underway, and many regulations and the legal system have not kept up with the pace of economic development. That presents severe challenges and risks to foreign investors. Taiwanese companies have accumulated years of experience doing business in China and also serve as major investors in Southeast Asian countries. As a result, Taiwanese companies have created a sophisticated business network across Asia. A free trade agreement between Taiwan and the U.S. would allow Massachusetts・ companies to increase their presence in the entire Asian market. This would certainly bring substantial benefits to Massachusetts・ economy in both the short and the long-term.
Free trade has long been a major driver of economic growth in Massachusetts. Massachusetts built many strong partnerships with countries that signed FTAs with the U.S. Canada, a member of NAFTA, has been Massachusetts・ largest export market for many years, while Massachusetts・ increasing export levels to Mexico and Singapore have also been enabled in large part by the signing of FTAs. The scale of Taiwan・s economy, compared with Singapore and Mexico, is at least the same but more likely even larger. Taiwan also has specific competitive advantages in manufacturing and R&D. We strongly believe that the U.S.-Taiwan FTA would not only bring more opportunities to both Massachusetts and Taiwan but also help Massachusetts・ products and services enter Asia-Pacific markets via Taiwan. In conclusion, it is clear that the signing of the U.S.-Taiwan FTA would be good for Massachusetts 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 Massachusetts made possible by the U.S.-Taiwan FTA, we hope that the administration, the Senate and the House of Representatives of the State of Massachusetts can further express their support for a U.S.-Taiwan FTA to the Bush Administration.
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