In July, the Republic of China (Taiwan) signed a historic economic cooperation agreement with New Zealand. The conclusion of the agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Cooperation (ANZTEC) is of great significance to Taipei as it marks a milestone in the Taiwan government's strategy of pursuing Asia-Pacific regional integration and forging deeper connections with the global community. Next should be the United States.
ANZTEC is a high-quality, high-standard agreement. The bilateral pact covers a wide range of commercial activities, including investment, trade in goods and services, the movement of people, air transport and indigenous cooperation. Taking trade in goods as an example, Taiwan will liberalize 99.9 percent of its tariff lines, while New Zealand will liberalize 100 percent.
Most importantly, however, as President Ma Ying-jeou emphasized in his official statement following its inking, the agreement demonstrates "Taiwan's determination to establish a liberalized economy." It is also a crucial first step in Taiwan's strategic blueprint to both diversify its overseas markets and to gain wider economic international space through enhanced commercial ties with its neighbors. As our president noted, we anticipate a similar agreement will be concluded with Singapore in the near future.
This groundbreaking agreement with New Zealand is a signal, particularly to Washington, that Taiwan is committed to trade liberalization and is actively seeking similar deals with other trading partners. Taiwan and the United States have a robust and long-standing friendship based on a commitment to free trade, democracy, human rights and the rule of law. Although bilateral trade between the two nations has declined since its peak in the 1980s, the agreement with New Zealand can serve as a launching pad for a comparable agreement to reinvigorate trade between Taiwan and the United States. The ANZTEC is a positive development in that regard; it serves as a concrete reminder of the benefits of combining political will with common sense.
Three decades ago, bilateral trade with the United States accounted for 30 percent of Taiwan's total trade. During the next two decades, though, Taiwan-U.S. trade had declined to around 10 percent while mainland China and Hong Kong emerged as Taiwan's largest trading partners. Together, they account for almost 40 percent of Taiwan's total exports. Yet for both strategic and purely economic reasons, it is imperative that Taiwan diversify its overseas markets in order to ensure the long-term, continued peace and prosperity of its citizens.
ANZTEC underscores Taiwan's commitment to this market diversification and trade liberalization as well as its readiness to seek similar deals with other trading partners, such as the United States. It also reflects Taiwan's political will to engage in regional trade agreements, such as the Trans-Pacific Partnership Agreement. Complementary moves on Washington's part, whether through advocating for Taiwan's membership in this agreement or through other means, such as a bilateral free-trade agreement and a bilateral investment agreement, will clearly demonstrate continued firm support for a long-standing ally of the United States.
Taiwan has already been working constructively to enhance bilateral trade relations. To illustrate, in recent years, Taiwan has worked closely with the United States in the World Trade Organization forum on the Trade in Services Agreement and on the Information Technology Agreement, as well as in Asia-Pacific Economic Cooperation for trade liberalization in environmental goods and services.
In addition, as the United States looks to "rebalance" toward Asia, Taiwan presents an opportunity for economic partnership not to be missed. As former Secretary of State Hillary Rodham Clinton famously noted, Taiwan is an important security and economic partner of the United States. What better friend in the Asia-Pacific region does America have? The two friends have stood together through thick and thin and will continue to stand side by side during the decades ahead.
Shih-hwang Chiang is senior adviser for the Taipei Economic and Cultural Representative Office in the United States.