From The Heritage Foundation and AEI:
by Claude Barfield
American Enterprise Institute
November 16, 2011
Even with the economic benefits of the Economic Cooperation Framework Agreement, Taiwan will experience negative impacts as East Asian integration proceeds either through a consolidation of intra-Asian Free Trade Agreements (FTA), through the expansion of the Trans-Pacific Partnership Agreement (TPP), or through some kind of melded integration. Beyond the bare trade numbers, there is the likelihood that Taiwan’s central status as a hub for regional and global supply chains will be jeopardized. Foreign direct investment is indispensable for the future growth of Taiwan’s economy. Taiwan’s first priority should be negotiating and signing FTAs with its major trading partners in East Asia. Should Beijing actively oppose such action—and attempt to intimidate potential FTA partners for Taiwan—the US should make it clear that it is prepared to move quickly to negotiate and conclude a comprehensive FTA with Taiwan and will push for Taiwan’s future membership in the TPP.