What effect will a U.S.-Taiwan FTA have on U.S.-China relations and on Chinas booming economy?
With Taiwan still a leading investor in Chinas economy, an economically stronger Taiwan is good for the Chinese economy. Taiwan has recently decided to diversify its investment relations in Asia, and negotiating the FTA with the U.S. would open doors to Taiwan to negotiate similar agreements in the Asia Pacific region and elsewhere. The U.S.-Taiwan FTA serves as a confidence-building mechanism that will permit Taiwan to be more open towards China. The U.S.-Taiwan FTA need not be inconsistent with growing trade between China and the United States. Depending on how the rules of origin for the agreement are structured, there may be scope, for example, for inclusion of some Chinese content in goods qualifying under the agreement…….
