Remarks by U.S. under Secretary of Commerce Grant D. Aldonas American Chamber of Commerce in Taipei, Taiwan April 11, 2002 (as Prepared for Delivery)
INTRODUCTION
Thank you, AmCham President Richard Henson. Under your leadership, the AmCham plays a key role in the dynamic commercial relationship between the United States and Taiwan: you offer important insights and ideas on how to move forward with the relationship.
I am in Taipei to offer congratulations to Taiwan on its WTO accession. The United States supported Taiwan throughout the long and sometimes intense negotiations, and it is gratifying that this long-standing goal – for both of us – has finally been reached.
Yet, in many respects, our work – and Taiwan’s – has only begun. We need to make sure that Taiwan complies with the new obligations it has undertaken. And that is the key purpose of my visit.
As Commerce Secretary Evans and I see it, my main job is to be an advocate for U.S. exporters, and that includes gearing our trade promotion efforts to “fill in” behind our agreements. That also includes ensuring that our trading partners comply with our trade agreements. Nothing is more dispiriting to our farmers, workers, and entrepreneurs than the sense that they are not receiving the market access we bargained for in various trade agreements. For our country to achieve the full benefits of open trade, we need to ensure that other trading partners live up to their trade agreements.
This is a key theme to my trip to Asia. Our delegation visited China and now Taiwan to ensure that this new chapter in our commercial relationship opens on a favorable note.
This is my first trip to Taiwan, and I am very impressed with what I’ve seen here so far. I believe that Taiwan has a lot to offer as a model – for how a strong civil society can go hand-in-hand with economic development and entrepreneurial success. To that end, I am very pleased that I just had a very productive meeting with President Chen and am delighted that I will be able to meet Acer CEO Stan Shih and Taiwan Semiconductor Manufacturing Co. Chairman Morris Chang as well as venture capitalists and other businessmen.
I would like to share with you the perspectives of the Bush administration on trade policy, and then talk more specifically about our trade relations with Taiwan.
TRADE POLICY
The principles of the United States’ trade policy are simple and straightforward: to eliminate all barriers to the free flow of goods, services, investment and ideas. President Bush believes, and I agree, that trade means considerably more than just economic growth, more higher-paying jobs, and a rising standard of living in America. Trade is ultimately about freedom.
As the President said in his first State of the Union address, “In every region, free markets and free trade and free societies are proving their power to lift lives. Together with friends and allies from Europe to Asia, and Africa to Latin America, we will demonstrate that the forces of terror cannot stop the momentum of freedom.”
DOHA DEVELOPMENT AGENDA
Trade has provided enormous benefits worldwide.
WTO figures indicate that tariffs on manufactured goods averaged nearly 40 percent at the time the GATT was created in 1947. By the end of the Uruguay Round, for developed countries, those rates had fallen to below 5 percent. During that same time, trade increased 16 times. The OECD has estimated that the Uruguay Round delivers annually the equivalent of a $200 billion tax cut to consumers worldwide.
Our work is not done. A recent study by Robert Stern at the Gerald R. Ford School of Public Policy at the University of Michigan underscores that point. Professor Stern estimates that a one-third reduction in global barriers to trade in agriculture, services, and manufacturing, would yield $613 billion in world economic growth, the equivalent of an economy the size of Canada. Eliminating all trade barriers would boost global growth by $1.9 trillion, the equivalent of adding two Chinas.
This is why we must succeed with our efforts on the Doha Development Agenda, as well as with the Free Trade Agreement of the Americas, and our FTA negotiations.
The ambitious Doha agenda calls for a comprehensive 3-year negotiation (to be concluded by 2005), covering a variety of areas such as agriculture, services, industrial tariffs, investment, and environmentally harmful fishing subsidies. There will also be negotiations on dispute settlement and antidumping rules.
The Ministers also approved a separate political declaration regarding patent rules and public health and a decision regarding developing country concerns related to their commitments to implement previous WTO Agreements and to technical assistance.
The United States and Taiwan can and should collaborate in our approach to the upcoming negotiations. We have similar interests in seeing fewer tariff and non-tariff barriers around the world.
We expect Taiwan to fully participate in the Doha Development Agenda and to take a leadership role, including in the negotiations on agriculture.
There are key areas which deserve our close attention as we move ahead with new WTO trade negotiations. The United States and Taiwan share an interest in ensuring that high technology trade is further liberalized.
The existing Information Technology Agreement is a good start. But we need to work to bring developing countries along as we work to further liberalize trade in high technology products. We should collaborate in seeking further market access commitments through the Services 2000 negotiations for services that use information technology goods, including the basic telecommunications agreement.
We need to ensure that the WTO continues to provide strong protection for intellectual property rights. This becomes increasingly important as the products we trade become more technically advanced. We encourage Taiwan to continue its own efforts to implement the WIPO “Internet Treaties” and encourage other members to do so as well.
We need to work together to ensure that the upcoming WTO market access talks succeed. We need to end up with a significant reduction in tariff and non-tariff barriers.
And it can’t be only the developed members that participate. The importance of trade between developing countries means that developing country barriers also need to be lowered.
Finally, we need to take very seriously our obligation to provide technical assistance to developing country WTO Members. In some cases it will be necessary to help give these countries the tools they need to fully participate in, and benefit from, new trade talks.
TPA
In order to move ahead with the new trade agenda, and with our other ongoing negotiations, we need to have trade promotion authority.
TPA would empower our negotiators and send an important signal to our trading partners – showing that our executive and legislative branches had reached a consensus on trade to help lift living standards throughout the world.
We were very pleased that the House passed TPA last year. We hope that a Senate vote will come soon.
TAIWAN
What does this mean for Taiwan, and for all of you doing business here? Let me stress the importance this Administration attaches to our relations with the people of Taiwan.
When President Bush was in Beijing, he was quite direct with his Chinese hosts. He said, “The position of my government has not changed over the years. We believe in the peaceful settlement of this issue. We will urge there be no provocation. The United States will continue to support the Taiwan Relations Act.”
Taiwan is a model of progress – a prosperous society which enjoys international respect for its values of freedom and democracy, not just its economic achievements. Maintaining strong, if unofficial, relations with Taiwan is in the U.S. interest. We are committed to do so because it is important for America’s global position and for peace and stability in Asia.
It is time that Taiwan joined the WTO. The United States and Taiwan enjoy a two-way trade relationship worth about $52 billion last year. It is our ninth largest trading partner and our tenth largest export market.
This historic development is good for everyone: it is good for the United States and for Taiwan’s other trading partners, who will gain improved access to Taiwan’s markets. It is good for the global trading system, which will benefit from the inclusion of all major economic players – including Taiwan and the PRC. It is, moreover, an achievement we could not have reached without input and advice from all of you, the private sector.
COMPLIANCE
There is another area in which I hope Taiwan will serve as a model. With Taiwan’s additional rights, come additional responsibilities. Now that Taiwan has achieved WTO membership, it must be vigilant about complying with its new obligations, and I would like to count on Taiwan to set a good example within the WTO.
We will be monitoring how Taiwan fulfills its commitments. My staff and our colleagues at AIT, USTR, and throughout the government, will be monitoring Taiwan’s compliance with its commitments.
Monitoring agreements and securing compliance is a top priority throughout this Administration. Secretary Evans has told the Congress that assuring compliance with trade agreements is “an absolute” with him. It is certainly a key element of my job, and of everyone who works in the International Trade Administration. When Assistant Secretary Lash was here in January, he made a similar point.
We want to know: Did the authorities implement all the laws and regulations on schedule? Do the new laws actually comply with WTO commitments? Have new laws or practices emerged that could impair any of Taiwan’s commitments?
IP is very important to us – as it is to Taiwan’s entrepreneurs. Right now the trade agencies are conducting the annual review of our trading partners’ level of IPR protection. We are examining the steps Taiwan is taking to protect intellectual property and ensure enforcement of intellectual property laws.
I am stressing this in my meetings, and I am raising some specific concerns with Taiwan – such as in the areas of pharmaceuticals, telecommunications, standards, and distilled spirits.
This is what we mean by compliance monitoring, and for this we will need your help once again. Please keep in touch with us when you encounter trade problems. We want U.S. companies to actually get the benefits of the agreements we have negotiated.
FUTURE CHALLENGES
Taiwan has been facing a number of economic challenges. The recent global downturn in the information technology sector struck the economy hard, leading to a nearly 2 percent drop in GDP growth for 2001 and contributing to reduced trade. However, there are strong signals that Taiwan’s economy is now poised for recovery. This is good news for both of us, since it means trade will start to grow again.
Another challenge for Taiwan is the need to work out the nature of its economic relations with the PRC. Even in the current absence of political dialogue, economic relations across the Strait are growing dramatically. Taiwan businesses have invested billions of dollars in the PRC. Annual cross Strait trade is estimated to be about $32 billion. The entry of both the PRC and Taiwan into the WTO seems likely to increase commercial relations between the two sides.
The United States welcomes all exchanges between Taiwan and the PRC, including commercial ones. I note that the Taiwan authorities recently implemented regulations relaxing some of the restrictions on cross-Strait investment, and have opened a long list of items that can now be imported into Taiwan from the PRC. We support moves such as this because we believe the cementing of economic ties will give both sides a stake in reducing political tensions.
Last year’s recession demonstrates the need for Taiwan to explore new ways to strengthen its economy, perhaps in high-value added sectors in which its firms excel. WTO membership, together with domestic reforms, should help free up resources to flow to a broader range of possible alternatives.
Thank you.
Thank you, AmCham President Richard Henson. Under your leadership, the AmCham plays a key role in the dynamic commercial relationship between the United States and Taiwan: you offer important insights and ideas on how to move forward with the relationship.
I am in Taipei to offer congratulations to Taiwan on its WTO accession. The United States supported Taiwan throughout the long and sometimes intense negotiations, and it is gratifying that this long-standing goal – for both of us – has finally been reached.
Yet, in many respects, our work – and Taiwan’s – has only begun. We need to make sure that Taiwan complies with the new obligations it has undertaken. And that is the key purpose of my visit.
As Commerce Secretary Evans and I see it, my main job is to be an advocate for U.S. exporters, and that includes gearing our trade promotion efforts to “fill in” behind our agreements. That also includes ensuring that our trading partners comply with our trade agreements. Nothing is more dispiriting to our farmers, workers, and entrepreneurs than the sense that they are not receiving the market access we bargained for in various trade agreements. For our country to achieve the full benefits of open trade, we need to ensure that other trading partners live up to their trade agreements.
This is a key theme to my trip to Asia. Our delegation visited China and now Taiwan to ensure that this new chapter in our commercial relationship opens on a favorable note.
This is my first trip to Taiwan, and I am very impressed with what I’ve seen here so far. I believe that Taiwan has a lot to offer as a model – for how a strong civil society can go hand-in-hand with economic development and entrepreneurial success. To that end, I am very pleased that I just had a very productive meeting with President Chen and am delighted that I will be able to meet Acer CEO Stan Shih and Taiwan Semiconductor Manufacturing Co. Chairman Morris Chang as well as venture capitalists and other businessmen.
I would like to share with you the perspectives of the Bush administration on trade policy, and then talk more specifically about our trade relations with Taiwan.
TRADE POLICY
The principles of the United States’ trade policy are simple and straightforward: to eliminate all barriers to the free flow of goods, services, investment and ideas. President Bush believes, and I agree, that trade means considerably more than just economic growth, more higher-paying jobs, and a rising standard of living in America. Trade is ultimately about freedom.
As the President said in his first State of the Union address, “In every region, free markets and free trade and free societies are proving their power to lift lives. Together with friends and allies from Europe to Asia, and Africa to Latin America, we will demonstrate that the forces of terror cannot stop the momentum of freedom.”
DOHA DEVELOPMENT AGENDA
Trade has provided enormous benefits worldwide.
WTO figures indicate that tariffs on manufactured goods averaged nearly 40 percent at the time the GATT was created in 1947. By the end of the Uruguay Round, for developed countries, those rates had fallen to below 5 percent. During that same time, trade increased 16 times. The OECD has estimated that the Uruguay Round delivers annually the equivalent of a $200 billion tax cut to consumers worldwide.
Our work is not done. A recent study by Robert Stern at the Gerald R. Ford School of Public Policy at the University of Michigan underscores that point. Professor Stern estimates that a one-third reduction in global barriers to trade in agriculture, services, and manufacturing, would yield $613 billion in world economic growth, the equivalent of an economy the size of Canada. Eliminating all trade barriers would boost global growth by $1.9 trillion, the equivalent of adding two Chinas.
This is why we must succeed with our efforts on the Doha Development Agenda, as well as with the Free Trade Agreement of the Americas, and our FTA negotiations.
The ambitious Doha agenda calls for a comprehensive 3-year negotiation (to be concluded by 2005), covering a variety of areas such as agriculture, services, industrial tariffs, investment, and environmentally harmful fishing subsidies. There will also be negotiations on dispute settlement and antidumping rules.
The Ministers also approved a separate political declaration regarding patent rules and public health and a decision regarding developing country concerns related to their commitments to implement previous WTO Agreements and to technical assistance.
The United States and Taiwan can and should collaborate in our approach to the upcoming negotiations. We have similar interests in seeing fewer tariff and non-tariff barriers around the world.
We expect Taiwan to fully participate in the Doha Development Agenda and to take a leadership role, including in the negotiations on agriculture.
There are key areas which deserve our close attention as we move ahead with new WTO trade negotiations. The United States and Taiwan share an interest in ensuring that high technology trade is further liberalized.
The existing Information Technology Agreement is a good start. But we need to work to bring developing countries along as we work to further liberalize trade in high technology products. We should collaborate in seeking further market access commitments through the Services 2000 negotiations for services that use information technology goods, including the basic telecommunications agreement.
We need to ensure that the WTO continues to provide strong protection for intellectual property rights. This becomes increasingly important as the products we trade become more technically advanced. We encourage Taiwan to continue its own efforts to implement the WIPO “Internet Treaties” and encourage other members to do so as well.
We need to work together to ensure that the upcoming WTO market access talks succeed. We need to end up with a significant reduction in tariff and non-tariff barriers.
And it can’t be only the developed members that participate. The importance of trade between developing countries means that developing country barriers also need to be lowered.
Finally, we need to take very seriously our obligation to provide technical assistance to developing country WTO Members. In some cases it will be necessary to help give these countries the tools they need to fully participate in, and benefit from, new trade talks.
TPA
In order to move ahead with the new trade agenda, and with our other ongoing negotiations, we need to have trade promotion authority.
TPA would empower our negotiators and send an important signal to our trading partners – showing that our executive and legislative branches had reached a consensus on trade to help lift living standards throughout the world.
We were very pleased that the House passed TPA last year. We hope that a Senate vote will come soon.
TAIWAN
What does this mean for Taiwan, and for all of you doing business here? Let me stress the importance this Administration attaches to our relations with the people of Taiwan.
When President Bush was in Beijing, he was quite direct with his Chinese hosts. He said, “The position of my government has not changed over the years. We believe in the peaceful settlement of this issue. We will urge there be no provocation. The United States will continue to support the Taiwan Relations Act.”
Taiwan is a model of progress – a prosperous society which enjoys international respect for its values of freedom and democracy, not just its economic achievements. Maintaining strong, if unofficial, relations with Taiwan is in the U.S. interest. We are committed to do so because it is important for America’s global position and for peace and stability in Asia.
It is time that Taiwan joined the WTO. The United States and Taiwan enjoy a two-way trade relationship worth about $52 billion last year. It is our ninth largest trading partner and our tenth largest export market.
This historic development is good for everyone: it is good for the United States and for Taiwan’s other trading partners, who will gain improved access to Taiwan’s markets. It is good for the global trading system, which will benefit from the inclusion of all major economic players – including Taiwan and the PRC. It is, moreover, an achievement we could not have reached without input and advice from all of you, the private sector.
COMPLIANCE
There is another area in which I hope Taiwan will serve as a model. With Taiwan’s additional rights, come additional responsibilities. Now that Taiwan has achieved WTO membership, it must be vigilant about complying with its new obligations, and I would like to count on Taiwan to set a good example within the WTO.
We will be monitoring how Taiwan fulfills its commitments. My staff and our colleagues at AIT, USTR, and throughout the government, will be monitoring Taiwan’s compliance with its commitments.
Monitoring agreements and securing compliance is a top priority throughout this Administration. Secretary Evans has told the Congress that assuring compliance with trade agreements is “an absolute” with him. It is certainly a key element of my job, and of everyone who works in the International Trade Administration. When Assistant Secretary Lash was here in January, he made a similar point.
We want to know: Did the authorities implement all the laws and regulations on schedule? Do the new laws actually comply with WTO commitments? Have new laws or practices emerged that could impair any of Taiwan’s commitments?
IP is very important to us – as it is to Taiwan’s entrepreneurs. Right now the trade agencies are conducting the annual review of our trading partners’ level of IPR protection. We are examining the steps Taiwan is taking to protect intellectual property and ensure enforcement of intellectual property laws.
I am stressing this in my meetings, and I am raising some specific concerns with Taiwan – such as in the areas of pharmaceuticals, telecommunications, standards, and distilled spirits.
This is what we mean by compliance monitoring, and for this we will need your help once again. Please keep in touch with us when you encounter trade problems. We want U.S. companies to actually get the benefits of the agreements we have negotiated.
FUTURE CHALLENGES
Taiwan has been facing a number of economic challenges. The recent global downturn in the information technology sector struck the economy hard, leading to a nearly 2 percent drop in GDP growth for 2001 and contributing to reduced trade. However, there are strong signals that Taiwan’s economy is now poised for recovery. This is good news for both of us, since it means trade will start to grow again.
Another challenge for Taiwan is the need to work out the nature of its economic relations with the PRC. Even in the current absence of political dialogue, economic relations across the Strait are growing dramatically. Taiwan businesses have invested billions of dollars in the PRC. Annual cross Strait trade is estimated to be about $32 billion. The entry of both the PRC and Taiwan into the WTO seems likely to increase commercial relations between the two sides.
The United States welcomes all exchanges between Taiwan and the PRC, including commercial ones. I note that the Taiwan authorities recently implemented regulations relaxing some of the restrictions on cross-Strait investment, and have opened a long list of items that can now be imported into Taiwan from the PRC. We support moves such as this because we believe the cementing of economic ties will give both sides a stake in reducing political tensions.
Last year’s recession demonstrates the need for Taiwan to explore new ways to strengthen its economy, perhaps in high-value added sectors in which its firms excel. WTO membership, together with domestic reforms, should help free up resources to flow to a broader range of possible alternatives.
Thank you.