ALEC STATE LEGISLATORS SIGN LETTER URGING PRESIDENT BIDEN TO ENTER BILATERAL TRADE AGREEMENT WITH TAIWAN
What is a Bilateral Trade Agreement? Who benefits?
A bilateral trade agreement is an agreement exclusively between two nations establishing rules of engagement for trading. Sometimes instead called a “free trade” agreement, the United States currently has this type of agreement with 20 different countries. These agreements allow nations to engage in trade without the presence of tariffs or other non-tariff barriers. The result of this is lower consumer prices and an increased choice in goods.
Bilateral trade agreements also spur significant economic growth and affordability in each nation, as it creates competition between domestic and international firms. When a domestic frim such as Kitchen Aid is met with competition from a similar Taiwanese company, they are incentivized to cut costs and run more efficiently.
Why form an agreement with Taiwan?
For starters, Taiwan has consistently shone as a democratic beacon of hope in the Indo-Pacific region, sharing values of freedom, democracy and human rights. In fact, according to the Heritage Foundation’s 2021 Economic Freedom Index, Taiwan ranks as the 6th most free economy in the world. A coalition of 161 bipartisan members of the House of Representatives has also signed a joint letter urging this kind of trade agreement.
The United States currently ranks as Taiwan’s #2 trading partner, but we are far from becoming #1 anytime soon. Because of the lure of cheap manufacturing provided by the gigantic Chinese market, Taiwan has become increasingly drawn to them as their top trading partner. Naturally, it is in the best interests of the United States to form this agreement so that we can get a leg up in the competitive global market.
An agreement between our two countries will not only be of great benefit to us; ripples will be felt around the world as well. Looking on at the benefits of this arrangement, other countries will be drawn to create agreements with Taiwan, reducing its dependence on the Chinese market.
What are we doing about it?
Two months ago, ALEC Action launched a campaign asking state legislators to sign our letter urging President Biden to set in place a bilateral trade agreement with Taiwan. Today, we’ve gotten a bipartisan coalition of 129 state legislators from 28 different states to sign on. We’re glad to see so many of our legislators support this vitally important policy, and will continue working to see it made reality.