- - Thursday, March 13, 2014

In his administration’s much-vaunted and ongoing “pivot” toward Asia, President Obama should enter into a bilateral investment agreement with Taiwan and support Taiwanese membership in the Trans-Pacific Partnership at the earliest dates possible.

Both moves make good political sense and would also bring direct and immediate economic benefits to the United States.

Our countries are already close economic, military and political allies, but it is now time to take the economic relationship to the next level.

Taiwan is our 11th-largest trading partner. It is our seventh-largest in agricultural produce — a remarkable feat in that we are half a world away from each other.

U.S. foreign direct investment in Taiwan stands at $22 billion and is on the upswing. The American Chamber of Commerce in Taipei represents more than 500 U.S. companies.

Likewise, Taiwan’s already substantial investment here is growing. Taiwan is currently a “focus market” under our Department of Commerce’s SelectUSA initiative.

Our nations’ economic relationship is governed by a Trade and Investment Framework Agreement that is 10 years old and inadequate in addressing the complexities and enormity of this relationship.

A bilateral investment agreement would provide increased and necessary assurances to U.S. investors that their assets in Taiwan will be adequately protected.

It would also increase the ability of American businesses to compete against their third-country counterparts in Taiwan. By the same token, reciprocal assurances for Taiwanese investors would spur increased foreign direct investment here.

The United States would also benefit from bringing Taiwan into the Trans-Pacific Partnership, an ambitious 21st-century agreement that focuses on cross-cutting issues (including, for example, the digital economy, labor and the environment) and that is aimed at liberalizing and unifying Asia-Pacific nations’ trade policies.

The absence of Taiwan, one of the world’s 20 largest economies, leaves a gaping hole in this scheme.

One immediate, tangible benefit to the United States and other Trans-Pacific Partnership members is that Taiwan’s admission would go a long way toward integrating regional supply chains.

Five of Taiwan’s 10 largest export destinations are members of the Trans-Pacific Partnership, and its two-way trade with other Asia-Pacific countries has tripled in the past decade. Recent studies rank Taiwan as the sixth-most competitive economy in the world and the fourth-best investment environment.

Taiwan clearly understands all of these issues. After some initial hesitation, it is following the South Korean example of seeking numerous bilateral and multilateral trade deals.

In recent months, it has entered into agreements with Singapore and New Zealand, both of which are Trans-Pacific Partnership charter members. It also has bilateral investment agreements with China and Japan, its two largest overall trading partners.

Taiwan has adopted this strategy because it knows that lowering tariff barriers will accelerate Taiwanese sales to other countries and thereby benefit the nation’s and the region’s economies. The United States should join this bandwagon by signing a bilateral agreement and reap the profits that it will bring.

In spite of rhetoric to the contrary — heard most recently at the “Three Amigos” summit in Mexico and after the most recent Trans-Pacific Partnership talks in Singapore in late February — the Obama administration is dragging its feet, both in securing agreement with countries currently in partnership negotiations and in bringing Taiwan and additional nations into the talks.

In recent years, U.S. leadership has enabled Taiwan to obtain observer status with the World Health Organization and guest status in the International Civil Aviation Organization assembly.

In the past, I have described these moves as no-brainers, a description borne out by Taiwan’s immediate assumption of significant and constructive roles in both organizations’ assemblies.

While the Obama administration recently hailed Taiwan as a “valuable” Asia-Pacific Economic Cooperation member, it contends that the island is not quite ready for a bilateral investment agreement or Trans-Pacific Partnership membership.

With some vagueness, it claims that in certain spheres, Taiwan still has a long way to go in liberalizing its economy in general and opening it further to international markets.

For its part, Taiwan points to its enormous progress in a few short years. It only asks that Washington be more forward-looking — as it has been in the past, for example, regarding the expansion of NATO and the European Union.

As newly admitted members of those bodies have demonstrated in their own development, a prompt bilateral investment agreement and entry into the Trans-Pacific Partnership would further incentivize Taiwan to accomplish its remaining liberalization goals.

In trade terms, there is no single 500-pound gorilla, but Taiwan’s economic presence is sufficiently significant to make its omission problematic.

Taiwan deserves a bilateral investment agreement, and a Trans-Pacific Partnership worthy of the name must include Taiwan. Pro-actively and as a high priority, the Obama administration should lead the way in bringing this important nation into the room.

Bob Dole, a registered agent of Taiwan, is a former Senate majority leader and Republican presidential nominee.