The Trade and Investment Framework Agreement (TIFA) between Taiwan and the United States was suspended in 2007 due to Taiwan’s restriction on imports of American beef. Owing to pressure from regional trade agreements that exclude Taiwan, TIFA is back on center stage as a main issue among Taiwan’s foreign policy-makers.

The Trade and Investment Framework Agreement (TIFA) between Taiwan and the United States was suspended in 2007 due to Taiwan’s restriction on imports of American beef. Owing to pressure from regional trade agreements that exclude Taiwan, TIFA is back on center stage as a main issue among Taiwan’s foreign policy-makers.

The United States has been one of Taiwan’s most important trading partners. On the surface, Taiwan had been reluctant to lower the restriction on American beef due to the level of additive ractopamine, a drug used to promote leanness. Out of health and safety concerns, or more likely, the economic interests to protect domestic beef industry, the regulation has delayed the progress of further free trade agreements between the two parties.

There are two sides to every coin: both liberalization and protectionism sacrifice certain parties’ interests. However, Taiwan is an island dependent on exports to sustain its economic development. Maintaining a good trade relationship with other nations has always been essential to Taiwan’s growth.

The ECFA (Economic Cooperative Framework Agreement) between Taiwan and China has brought a tremendous economic growth to Taiwan since 2010. Taiwan has been striving for a greater opportunity to develop bilateral commercial relationships with trading partners during past years. However, the economic competition and pressure have challenged Taiwan to keep pace with the trade agreement signing.

Recently in the Asian region, more and more countries are consolidating their competitiveness by signing either bilateral or multilateral free trade agreements. If Taiwan is left out from such a trend, it risks a drop in the international competitiveness.

Under these pressures, Taiwan finally gave up the ban allowing for the TIFA communication to be resumed.

The TIFA will include investment promotion, e-commerce, and removal of technology trade barriers. The signing between Taiwan and the United States will also strengthen Taiwan’s liberalization and, possibly, create chances for Taiwan to connect with other countries economically.

Globalization has become an unavoidable trend. It is impossible for Taiwan to be isolated from international integration or any potential commercial opportunity. Therefore, opening Taiwan’s market will positively benefit Taiwan’s economic growth.

 

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