The Importance of U.S.-Taiwan Commercial Relations in a Changing Asia Pacific Region, Remarks by Thomas J. Donohue
THOMAS J. DONOHUE
President and CEO, U.S. Chamber of Commerce
November 16, 2009
As Prepared for Delivery
Thank you very much, Alan, and good morning everyone. Alan, let me thank you and Andrea for organizing today's breakfast.
We greatly appreciate the hard work you and your colleagues do to promote good business between the United States and Taiwan.
Through your annual White Paper, Washington "Door Knock," and other advocacy efforts, AmCham-Taipei is at the forefront of American business efforts to deepen economic and commercial ties with one of the world's most dynamic economies.
Now, here's what I'd like to do this morning. I'll make a few brief comments about:
What's going on in Washington...
What we saw happening at APEC, which is where I spent much of the last week...
And, finally, what we can do together to deepen the commercial relationship between the United States and Taiwan and to make sure everyone back home understands its importance.
Then I'd like to move to some questions and discussion.
Well, in case you haven't noticed, there are a few things happening back in Washington-fierce debates over health care, energy and climate change, financial regulations, workplace policies such as card check, taxes, deficits, and many more.
The U.S. Chamber is in the middle of all of these important issues.
We are also pushing a big trade agenda. Why? We've got to create 20 million jobs in the United States over the next 10 years just to re-employ the jobless and keep up with a growing workforce.
Doubling our exports in five years, an achievable goal, is our best ticket to creating those 20 million jobs, ending the recession, and bringing deficits under control.
Based on the events at APEC and what we are now hearing from the President, I think this message is starting to break through. More on that in just a moment.
Expanding free trade is a big part of a major free enterprise campaign we have recently launched at the Chamber.
It's a positive campaign to remind, educate, and persuade all Americans that it was a free enterprise system, based on free trade, open capital markets, hard work, and individual initiative that built the greatest economy in the world.
In fact, it appears that our economy is indeed on the mend.
We grew 3.5 percent in third quarter. We should grow at around that level in the fourth quarter and through the first half of next year. Housing has stabilized, and, consumption, investment in equipment, and industrial production are all up.
The jobs picture is another matter. The official unemployment rate increased to 10.2 percent last month. When you factor in discouraged workers and part-timers who want to work full-time, it is more like 17 percent.
The big question is, will our economy rebound and perform in the shape of a V or a W? Would anyone like to place any bets?
We brought our free trade and free enterprise message to APEC this past week—underscoring several key points:
First that the United States and its APEC partners must lead the way to the revival of the Doha negotiations.
Second, that the Asia-Pacific region can drive global recovery and growth if the 21 economies take a united stand against all forms of protectionism—not just in word but in deed.
Third, the region must work together on trade facilitation issues—the nuts and bolts that reduce costs and ease the burdens of doing business.
And fourth, that it was high time for the United States to get off the sidelines and start advancing a vigorous, forward looking trade agenda.
According to USTR, there are 168 FTAs in force in Asia today, up from only 22 in 1980.
Eighteen more have been completed but not yet implemented, and 70 more are being negotiated.
The United States has exactly two FTAs with Asian countries.
We are standing on the sidelines while Asian nations clinch new trade deals.
The result is a de facto East Asia Free Trade Area—effectively a third bloc in the global economy alongside North America and Europe.
So we must get on with it!
It's time to enact the Korea-U.S. Free Trade Agreement. We have a study that shows that at least 350,000 American jobs will be lost if the Europeans implement their agreement with Korea and we don't.
It means passing the Colombia and Panama agreements as well.
It means vigorously participating in the Trans-Pacific Partnership negotiations—which would constitute a major step toward an eventual Free Trade Area of the Asia-Pacific.
How did we do in Singapore?
The participants took strong stands for Doha and against protectionism.
President Obama and Ambassador Kirk made positive statements about Doha and about joining the TPP.
And, the President made some welcome comments about the Korea-US FTA. We are anxiously awaiting his further comments during his upcoming visit to Seoul.
In his speeches this week, the President has clearly linked increasing our exports to the creation of American jobs. He committed the United States to broad and deep engagement throughout the Asia-Pacific region.
These are precisely the points we are been pressing on the new administration ever since it took office.
Now we must see some concerted action to back up these words. Let me assure you that the U.S. Chamber will continue to up the ante throughout the United States—pushing the trade message, educating our citizens and policymakers, and challenging the unions and others who oppose trade.
That brings me to my visit to Taipei.
You are the experts here—so I won't tell you a lot of things you already know.
But I wanted to come here on the way home from APEC because the commercial and friendship ties between the United States and Taiwan are highly significant. We must seize every opportunity to broaden and deepen these ties.
Taiwan is among our top 15 trading partners. The United States exports more to Taiwan than to India or Italy.
With over $16 billion in cumulative investment, America remains the largest foreign investor here.
We applaud the important progress that Taiwan has achieved in creating a stronger environment for business over just the last year.
The Ma Administration has taken breakthrough steps by improving IPR protection and enforcement and joining the WTO's Agreement on Government Procurement.
The U.S. government has acknowledged the progress on IPR by removing Taiwan from the Special 301 Watch List.
These successes are also a testimony to the advocacy and leadership of AmCham-Taipei.
We also welcome the efforts by the Ma Administration to re-open Taiwan's market to U.S. beef products.
Hopefully, Taiwan will adhere to the terms of the recently signed beef protocol, which would pave the way for our governments to quickly schedule the next round of the Trade and Investment Framework Agreement (TIFA) talks.
A TIFA would be very helpful to American business on the ground in sectors ranging from pharmaceuticals to medical devices to financial services.
It would also provide a framework for advancing discussions on possible bilateral agreements with Taiwan in the areas of investment and electronic commerce.
We well understand that there are still challenges doing business here.
There is a need for greater regulatory transparency. And, regulators must refrain from inventing unique-to-Taiwan solutions, rather than following internationally practiced norms.
These policies distort competition by erecting non-tariff barriers to trade and investment.
As an open trading economy, it is in Taiwan's own best interest to continue its tradition of looking outward, resist protectionism, and honor the free trade principles that have contributed so much to its prosperity.
Of course, the issue on everyone's mind is the future of the relationship between Taiwan and the PRC.
We are encouraged that the Ma administration continues to lay the groundwork—through the negotiation of the Economic Cooperation Framework Agreement (ECFA)—to enhance cooperation and reduce tensions with the Mainland.
It appears that a major step forward was taken in Singapore over the weekend – with the meeting of President Hu and KMT Chairman Lien.
Why is the acceleration of cross-Strait economic links in the interest of American business? For three reasons.
First, the acceleration of these links would promote U.S. goals for peace and stability between Taiwan and the Mainland.
Second, it boosts Taiwan's underlying economic competitiveness and enhances its attractiveness as a destination for U.S. and other foreign investment.
Third, there is a formidable regional trade bloc developing—so far to Taiwan's and the United States' exclusion.
ASEAN, China, Japan, and Korea are preparing to dismantle trade barriers with one another.
By entering into an agreement with the Mainland, Taiwan would be increasing the likelihood that the Mainland would agree to Taiwan's participation in the Asian regional bloc.
This could set the stage for Taiwan's participation in free trade agreements with other countries around the world.
Taiwan will always be a keystone in America's engagement in the Asia-Pacific region. We must continue to develop our broad, growing, and dynamic relationship with Taiwan.
Today I will meet with business leaders and officials, including President Ma, to explore ways to make this happen.
But I wanted to come here first to spend this time with you—to share views, to hear your advice, and to underscore the commitment of the U.S. Chamber to a strong and prosperous commercial relationship between the United States and Taiwan.
Who has more reason to help turn back the tide of protectionism than the United States and Taiwan, who benefit greatly from open markets, investment, and the free flow of goods, services, capital, technology, and people?
Ladies and gentleman, we stand ready at the U.S. Chamber to do everything we can to help you secure, improve, and expand the vital economic and friendship ties between the United States and Taiwan.
With that, let me thank each of you for coming. I look forward to your questions and our discussion.
Thank you very much.