Expand cross-strait ties to enhance U.S.-Taiwan partnership: AIT chief

Employing fluent Mandarin, Stephen Young, director of the American Institute in Taiwan, made his remarks in a speech to influential business and industry leaders who are members of the Chinese National Association of Industry and Commerce (CNAIC).

President Chen Shui-bian also attended the gathering in Taipei.

“More cross-Strait economic opening will strengthen Taiwan’s global competitiveness. It will help Taiwan to realize its potential as a regional center for logistics, finance and other services,” Young said.

“Closer cross-strait ties can also contribute more broadly to both U.S. and Taiwan interests in the region,” he said.

This was the latest call from the U.S.’s de-facto ambassador to Taipei in reflecting the general views of American business leaders and investors here.

The government here still restricts trade and investment in China, which includes prohibiting direct flights to China and investment in advanced technology despite repeated urges made by foreign business executives in recent years.

Young noted that Taiwan is a world power in trade and a pioneer in some of the most advanced and critical technologies in the world.

Taiwan is presently the ninth largest U.S. trading partner. But the U.S. side is working hard to make the trade relationship even better.

He said the U.S. is aware that Taiwan has expressed interest in a Free Trade Agreement between the two sides. But with the expiration of Trade Promotion Authority in July, the U.S. is not in a position to consider new FTA partners at this time.

The U.S. recently reached a free-trade agreement with South Korea, a regional rival of Taiwan that competes with the island in many areas. Analysts have said the agreement could benefit South Korea at Taiwan’s expense.

However, Young said, “We are open to considering other mechanisms to advance bilateral economic cooperation that make sense to both sides.

He noted that the Trade and Investment Framework Agreement (TIFA) is currently the most effective channel for this purpose.

The U.S. also looks forward to the inaugural session of a Consultative Committee on Agriculture, a move that will dramatically enhance our coordination on agricultural trade, he said.

“We are exploring with Taiwan how to deepen our cooperation in other areas such as investment and taxation...and there is much work to be done,” he said.

Young pointed out Taiwan has made significant progress but should further strengthen the protection of intellectual property rights. In addition, Taiwan should continue efforts to build an efficient health care system that is financially sound and driven by market forces.

It should also expand market access in financial and other services. Progress in these areas will not only help the bilateral trade relationship; it will also contribute to growth by creating an environment that rewards innovation.

This is increasingly important as Taiwan evolves into a knowledge-based economy, he stressed.

Taiwan businesses have both taken advantage of and contributed to the remarkable economic growth of China, he said.

It will also help U.S. businesses build on their close relationships with Taiwan firms to enhance their position on both sides of the Taiwan Strait.

The members of CNAIC can play an important part in this by setting an example of good corporate governance for Chinese firms. Taiwan firms should observe high standards of environmental protection and labor rights in China, he said. “This can help speed the development of a modern China that is a constructive partner for both the United States and Taiwan,” he said.

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