Bipartisan agreement on the need for the U.S. and Taiwan to strengthen ties through a trade pact was on display Wednesday at a House Ways and Means Committee hearing, although Republican lawmakers were mostly critical of the Biden administration’s decision not to negotiate a traditional free trade agreement that requires approval from Congress.
“The path forward is bright, and I’m confident an agreement can be reached,” Ways and Means Chairman Richard Neal said at the hearing more than three months after the U.S. Trade Representative announced intentions to negotiate a trade pact with Taiwan. “I believe that the United States is ready to step up to the plate to deliver for Taiwan, the American people, and democracies across the world.”
The U.S. and Taiwan announced last month that they reached an agreement on the primary goals for the U.S.-Taiwan Initiative on 21st Century Trade and said negotiations would begin this fall.
Republicans on the panel were in strong agreement on the need for a pact, but demanded more. Members like Texas Rep. Kevin Brady, the top Republican on the committee, stressed the need for a comprehensive free trade agreement that includes deals to cut tariffs and provide preferential treatment for U.S. agricultural commodities.
“The Biden Administration’s unsatisfying new trade approach focuses on working groups, frameworks, and dialogues,” Brady said. “But that’s not enough. I fear that if we remain on this course, we won’t reach the concrete outcomes and meaningful enforcement that ensure open trade and lift populations out of poverty. The U.S.-Taiwan Initiative on 21st Century Trade is welcome, but it’s not enough.”
Republicans like Reps. Darin LaHood of Illinois, Brad Wenstrup of Ohio, Adrian Smith of Nebraska and Jason Smith of Missouri hammered at the need for a more comprehensive free trade agreement with Taiwan that needs congressional approval, but Democratic Rep. Judy Chu of California joined in the criticism.
“These administration-led initiatives are limited on what they can accomplish, which is why Congress should exercise our constitutional authority to pursue a bilateral FTA with Taiwan,” Chu said.
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Biden administration officials have said previously that there are no plans for traditional market access deals that would cut tariffs as part of the pact and it will not need approval from Congress. That’s the same with respect to the Indo-Pacific Economic Framework, which includes Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and Vietnam.
But Taiwanese tariffs on U.S. ag are high and should be cut as part of a pact with Taiwan, said Russell Boening, president of the Texas Farm Bureau and a witness at the hearing.
“Engagement in Taiwan, and the entire Indo-Pacific region, is critical for the continued growth of U.S. agricultural exports and the sustained economic health of America’s farmers and ranchers,” he said. “In fiscal year 2021, the U.S. exported $3.94 billion of agricultural products to Taiwan, our sixth largest agricultural export market. Leading domestic exports include soybeans, beef, wheat, poultry, and fresh fruit. Agricultural imports from Taiwan during this same time were $540 million.”
The average Taiwanese tariff on agricultural commodities is 15.12%.
Nevertheless, the panel members and witnesses were all strong proponents of a U.S. trade pact with Taiwan as China works to isolate the island nation that it claims as its own.
Fear of repercussions from China has kept many nations from strengthening ties with Taiwan, but a U.S. pact would help Taiwan out of its isolation, said Bonnie Glaser, director of the Asia Program for the German Marshall Fund and a witness at Wednesday's hearing.
A U.S.-Taiwan trade deal could “provide political cover for other countries to negotiate their own bilateral agreements with Taipei. Taiwan has sought trade deals with the European Union, Australia, Japan, the United Kingdom, and India, but its efforts have been stymied by Beijing,” she said.
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