Future of U.S.-Taiwan Trade

 WM: The Future of U.S.-Taiwan Trade, September 14, 2022 

To state the obvious, this hearing is the most effective statement to China on its recent reaction to the Speaker’s visit to Taiwan. I am sure it was noticed in Beijing. It is exactly the show of strength appropriate to the situation. Well played.

American doctrine on Taiwan is the One China Policy, which guarantees Taiwanese independence while recognizing that China still claims it as part of its territory. This allowed for the current economic relationship.

The United States should take China at its word and provide Taiwan, as a part of China, with the same trade advantages provided to China - from Most Favored Trading Status to supporting its membership in the World Trade Organization. There is one exception to that rule: membership in any regional compact having to do with regional trade.

In March’s hearing before the Committee on the 2022 Trade Policy Agenda, we commented on the need to resume regional trade negotiations. Taiwan could be a part of this process. This should also affect labor law in the United States. From those comments:

If the Belt Road and forced labor in China are still an issue, the answer is probably resurrecting some form of the Trans-Pacific Partnership. The right of businesses to short-circuit local law in special tribunals must be modified or  ended in any redux. This should be the case with all such trade agreements.

Agreements which try to modernize other nation’s labor arrangements need an awareness that America’s performance on issues of democracy, organized labor, wage & hour and safety enforcement are far from stellar. Perhaps any arrangements should include monitoring American employers and the government agencies that should be looking out for them.

At the very least, end right-to-work. Such laws are really right-to-exploit laws, including through the use of human trafficking. Migrant workers in the food industry, from harvesting to processing and packing face all sorts of bad treatment, sometimes with that treatment abetted by local law enforcement.

Overall, a basic element of trade policy is lacking in the United States. An analysis of how consumption taxes can improve our trade policy is found in a second attachment. The first attachment on tax reform is included to clarify the terms of the second. These are attachments because they have been provided before. I am available to explain these topics. There are many who can talk about how value added taxes relate to trade, but I am the only one who can walk the Committee and staff through how an employer-paid subtraction value added tax applies.

Attachment: Tax Reform Video links on the page

Attachment: Trade Policy Video