US and Taiwan Talks to Focus on Supply Chain and Digital Trade

Taiwan and the United States will discuss supply chain security and digital trade in their first trade talks in five years, as the two countries seek to deepen economic ties in the face of rising tension with China.

Negotiations are scheduled to begin on Wednesday and will allow both sides to focus more firmly on trade to match their efforts Strengthening security and political relations Amid growing tensions with Beijing. China claims that Taiwan is part of its territory and threatens to invade if Taipei resists unification indefinitely.

“We want to raise our business relationship to the next level of cooperation, the right level for the future,” john ding, the trade representative of Taiwan, told the Financial Times. “We like to talk about supply chains, digital trade, and trade facilitation.”

Washington’s decision to resume talks under the Trade and Investment Framework Agreement (TIFA) marks a shift from the Trump administration, which has prioritized agreeing a limited trade deal with Beijing.

Taiwan has been pushing for a bilateral trade deal since President Tsai Ing-wen opened The country marketed to American beef and pork last week, a move Washington has demanded.

Deng admitted that it may not be possible to reach such an agreement immediately. “The BTA is our example and that’s the reality,” he said. “[The US] Bilateral trade agreement talks with any country will not quickly start. But we can gradually pave the way.”

Sarah Bianchi, who has been nominated for deputy US trade representative, said Thursday that re-engaging with Taiwan under Teva was an example of the Biden administration’s work with allies “to meet the growing challenge of China.”

“I don’t think the Trump administration has integrated trade policy and strategy,” said Jeff Schott of the Peterson Institute for International Economics, a think-tank. “It is clear that the Biden administration is taking a more holistic approach to relations with China, and sees the Taiwan relationship as a more important one.”

The new talks follow an internal debate in Washington that included calls from the State Department to add an economic component to efforts to strengthen ties with Taipei.

Catherine Taye, the US trade representative, was less enthusiastic, but Jake Sullivan, the national security adviser, urged her office to begin talks, according to four people familiar with the situation.

“Ambassador Tay and the Biden administration are committed to strengthening our economic and trade relationship with Taiwan, and we look forward to discussing a range of issues during this week’s Teva meeting,” the Office of the United States Trade Representative said.

The US will likely focus on supply chain security for semiconductors and digital commerce, as well as press Taipei to follow through on a commitment to open its markets to American pork.

Tsai government did Little To encourage public acceptance in the United States of pork, which may arguably contain traces of the feed additive ractopamine. A referendum organized by the Taiwan opposition on the acceptance of US pork is scheduled for August.

Deng cautioned that a decision not to open the market could stymie discussions. Will the United States continue the Teva talks and deepen our trade relationship further? I guess they won’t – they will argue if you can’t even deal with these current issues, why are we discussing future issues with you? ” He said.

“But we shouldn’t continue to rely mostly on one market, it’s just too big a threat to Taiwan,” he added, referring to China.

Digital commerce, one of the issues the two sides focus on, covers topics including duty-free trade of digital products, barriers to data localization, cybersecurity and privacy rules.

Wendy Cutler, a former US trade negotiator, said it would be necessary for the talks to yield some joint initiatives, rather than just a “commitment to talk and coordinate more” to effectively boost trade ties.

Cutler suggested that the United States and Taiwan could practically work together on mapping semiconductor supply chains amid a global chip shortage.

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