What is a free trade agreement and why is it important for Taiwan?
A free trade agreement is a form of trade agreement authorized under the rules of the World Trade Organization (WTO). Under an FTA, two or more trading partners agree to remove tariffs and other barriers to trade to promote mutual economic growth and achieve greater economic integration. Taiwan is the 9th largest trading partner of the U.S. overall, and the 5th largest market for U.S. agricultural exports. In terms of economic security, the objective of forging closer economic ties through FTAs is very important for Taiwan. We understand FTAs can lead to trade creation and trade diversion, thereby changing the competitive conditions our exporters face, sometimes favorably and sometimes not so favorably. For example, the U.S. has launched FTA negotiations with several of Taiwans neighboring countries, including Korea (concluded), Malaysia and Thailand, and many of these countries products compete directly with those of Taiwan in the U.S. market. Added to that are Chinas efforts to devel
