On December 10, 2024, the first agreement under the U.S.-Taiwan Initiative on 21st-Century Trade came into effect after Taiwan and the United States executed the agreement on June 1, 2023. The agreement is expected to provide a stronger legal foundation for economic and trade exchanges between the two parties.
The agreement addresses five key issues:
- Trade Facilitation: The agreement aims to simplify customs clearance and streamline import and export procedures. By reducing the time and financial costs associated with trade, it seeks to enhance supply chain efficiency and resilience (e.g. Article 2.3 enhances the communication between customs and stakeholders; Article 2.29 prescribes that the both parties can set up “Trade Facilitation Committee” to improve trade facilitation). Additionally, it includes provisions for expedited customs clearance during humanitarian emergencies (e.g. Article 2.18 requires each parties to endeavor to allow the rapid release of shipments for humanitarian or disaster-relief through its Designated Representative).
- Good Regulatory Practices: This section emphasizes transparency and public participation in the formulation of laws and regulations (e.g. Article 3.9 requests each party, through its Designated Representative, to publish the related documents and to collect the public opinions when a regulatory authority is developing a regulation). The goal is to establish a high-level legal framework that fosters opportunities for trade, capital investment, and technological collaboration.
- Domestic Regulations for the Service Industry: The Taiwan and the United States both wish to see that regulations governing service providers are fair, reasonable, and transparent. To this end, the agreement facilitates the administrative licensing process so as to enable Taiwanese service providers to more easily apply for opportunities in the U.S. market (e.g. Articles 4.3 and 4.4 respectively sets forth the development and administration of measures for supply of “a service other than a financial service” and “a financial service”).
- Anti-Corruption Measures: The agreement includes commitments to combat corruption that are intended to protect market mechanisms from fraud while also enhancing fairness and efficiency. (e.g. Article 5.2 clearly emphasizes that both parties shall endeavor to follow the United Nations Convention against Corruption (UNCAC). Articles 5.3 to 5.5 requests the parties to adopt and maintain the necessary measures to prevent and combat bribery and corruption, to make related information publicly available, and to promoting integrity among public officials). These measures that the parties have committed to are expected to bolster business confidence once implemented.
- Support for Small and Medium-Sized Enterprises (SMEs): The agreement promotes resource-sharing to create new business opportunities for SMEs in both markets (e.g. Article 6.3 requests the parties, through its Designated Representative, to provide the information related to trading, investing, or doing business in the territory). It also encourages trade participation by minority groups and female entrepreneurs (e.g. Article 6.2 (b) strengthens the collaboration of the both parties, through their Designated Representatives, on activities to promote SMEs owned by underserved and underrepresented groups, including women, indigenous peoples, youth, and minorities, as well as start-ups, agricultural, and rural SMEs, and promote partnership among these SMEs and their participation in international trade).
This Agreement is the first of what is envisioned as a series of agreements to be reached under the framework provided by the U.S.-Taiwan Initiative on 21st-Century Trade. Through the Initiative, Taiwan and the United States aim to deepen their economic partnership, fostering mutual prosperity and shared benefits.
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