U.S.-Taiwan Services Roundtable Discusses Importance of Bilateral Investments
Washington, D.C. – The Coalition of Services Industries (CSI) and the Taiwan Coalition of Service Industries (TWCSI) concluded a wide-ranging roundtable discussion on October 31st, covering services and investment issues in connection with the CSI-sponsored 2013 Global Services Summit.
CSI President Peter Allgeier and TWCSI Secretary General Louisa Su opened the program by welcoming Ayesha Khanna, Counsel and Policy Advisor to Senate Majority Leader Harry Reid (D-NV). She commented on the enduring bipartisan support in Congress for maintaining strong U.S.-Taiwan relations and acknowledged the importance of the bilateral Trade and Investment Framework Agreement (TIFA) process for resolving bilateral trade matters, including exploring possibilities for a future U.S.-Taiwan bilateral investment agreement (BIA). Congresswoman Judy Chu (D-CA), in a prepared video statement, highlighted the importance of strong U.S.-Taiwan investment relations for her district and the State of California, which invests US$1.6 billion in Taiwan.
Other Congressional members have expressed strong support for concluding the BIA in the past, including Senators James Inhofe (R-OK), Bob Menendez (D-NJ), Representatives Ed Royce (R-CA) and Steve Chabot (R-OH). In addition, several private sector interests have supported a U.S.-Taiwan BIA.
The roundtable keynote speaker Dale Jieh, Deputy Chief Negotiator of the Office of Trade Negotiations in Taiwan's Ministry of Economic Affairs, emphasized the role that Taiwan’s companies play in helping to bring U.S.-developed innovations and technologies to market. With greater interest being expressed by Taiwan investors in expanding operations in the United States market, he commented that for both sides to move to formal negotiations for a BIA, "support from the U.S. and Taiwan business communities is essential.” Jieh was asked about how Taiwan companies view investment priorities – about “going west” or “going east.” Jieh commented that it is important for Taiwan, as a leading international investor, to balance and diversify its investment around the world. His view was that interest from Taiwan business in the U.S. market remained strong, as signified by Taiwan sending one of the top five delegations (in size) to the SelectUSA conference taking place October 31-November 1 in Washington, D.C.
The keynote remarks were followed by a panel moderated by Gee San of the Taiwan External Trade Development Council. The panel was composed of: Christine J. Bliss, Assistant U.S. Trade Representative for Services and Investment; Eric Chiang, Senior Advisor of the Taipei Economic and Cultural Representative Office; Hung-lieh Liang, Director, PricewaterhouseCoopers Legal, Taiwan; and Josh Kallmer, Counsel, Crowell & Moring LLP. Panel members stressed the importance of services and investment as keys to Taiwan's global economic success. They also noted the complementary nature of the two economies: the U.S. has a strong, competitive and diversified services industry, while Taiwan has a strong manufacturing base and plays a key role in the operation of global supply chains. As noted in a joint TWCSI-CSI communiqué, a BIA could be one means of providing investors in both economies greater assurances that the capital they are investing in each other’s market will be adequately protected.
Taiwan and the United States enjoy a dynamic trading relationship, with services playing an increasingly significant role. While Taiwan is the 11th largest trading partner of the U.S. in goods, with $63 billion in two-way trade during 2012, U.S. trade in services with Taiwan totaled $17 billion in 2011. The U.S. registered a $4 billion surplus in services exports to Taiwan that year. Of that total, U.S. exports of private commercial services to Taiwan were $10.7 billion, an increase of 15% ($1.4 billion) over the 2010 level. Furthermore, the United States is the top investor in Taiwan’s market. U.S. foreign direct investment (FDI) in Taiwan (stock) was $21.9 billion in 2012. Taiwan is the 24th largest source of incoming foreign investment in the United States – with total investments of $13.1 billion through 2012. Investors from Taiwan such as HTC and Formosa Plastics are expanding their operations in the United States and as a result are creating a great number of job opportunities in the United States.
Taiwan, as a leading global investor, has recently negotiated investment agreements with other key trading partners. Taiwan has completed an investment agreement with Japan and with China as part of the cross-strait Economic Cooperation Framework Agreement (ECFA). In addition, Taiwan’s economic cooperation agreements with New Zealand and Singapore include chapters on investment relations. A BIA with the United States could complement these agreements, while also giving Taiwan an opportunity to further internationalize its economy by adopting economic reforms and phasing out protections. The BIA also could extend important investment protections to small and medium enterprises (SMEs), a key business segment in both economies.
About the Coalition of Services Industries
The Coalition of Services Industries (CSI) represents the interests of the dynamic American services economy. Since 1982, CSI has created greater public awareness of the major role services play in the U.S. economy, and the organization has shaped domestic and international economic policies on behalf of the U.S. services sector. CSI members conduct business in all 50 states and the District of Colombia and in more than 100 countries.
About the Taiwan Coalition of Service Industries
The Taiwan Coalition of Service Industries (TWCSI) was established in 2007 to highlight the importance of trade in services, which account for almost 70% of GDP in Taiwan. TWCSI directly engages with individual companies and organizations, and plays an important role in helping its members take advantage of international trade opportunities.