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US and Taiwan should sign an FTA: Heritage Foundation

Report estimates Taiwan's GDP would increase by NT$18.93 billion

Taiwan, US flags (Getty Images)

Taiwan, US flags (Getty Images)

TAIPEI (Taiwan News) — An American think tank has recommended Taiwan and the U.S. sign a free trade agreement (FTA) as the next step in their evolving economic relationship.

The Heritage Foundation, a policy research institute based in Washington, D.C., released an in-depth report on Thursday (April 28), titled “U.S.–Taiwan Free Trade Agreement: The Economic Case.”

Using statistical modeling, the report estimates that a comprehensive FTA between both countries would see U.S. GDP increase by US$246 million (NT$7.26 billion) and Taiwan’s GDP would increase by US$641 million.

The report notes that the U.S. and Taiwan signed a Trade and Investment Framework in 1994 and have strengthened their economic relationship, especially after Taiwan’s accession to the World Trade Organization (WTO) in 2002. Heritage concludes that “the next step in the economic relationship should be a formal trade agreement” and that this should be a “top priority” for the Biden administration.

The report cites Taiwan’s earlier barriers on U.S. beef and pork as having been a persistent obstacle toward an agreement over the last two decades. Yet, that has changed since 2020 when Taiwanese President Tsai Ing-wen (蔡英文) announced an end to restrictions of beef and pork products containing ractopamine.

“An FTA should cover all sectors and eliminate all non-tariff barriers that are not backed by science-based evidence for the protection of health and safety,” it reads.

The report states that an FTA would not only increase bilateral trade and contribute to GDP growth, but also provide both countries with market-based alternatives to China.