Washington, D.C. — On July 2, FAO Global Associates attended an event held by Heritage Foundation on ‘Cross-Strait Relations: Present Challenges and Future Development.’ At the event, international experts from Taiwan, China and the U.S. discussed a wide range of topics including: 

1. Taiwan-China-U.S. relations 
2. Chinese domestic policies that impact Taiwan-China-U.S. relations  
3. Cross-Strait economic relations and the U.S.-China Trade War 

3 Key Takeaways:

1. Like many other developed market economies in the Asia-Pacific region, Taiwan is desperate to find new areas of growth and diversify its trading partners. Due to China’s rising economic power and Beijing’s ability to influence other countries relationships with Taiwan, Taiwan’s overall influence may be degrading. 
2. Over the past 15 years, Taiwan’s economy has increasingly become dependent on investment and trade with China. In 2010, Beijing and Taipei signed a trade deal known as the Economic Cooperation Framework Agreement to reduce tariff and non-tariff barriers, further increasing direct economic ties between Taiwan businesses and China. 
3. There are still significant economic ties between the U.S. and Taiwan through trade and investment. With $87 billion worth of goods and services traded in 2017, Taiwan has become one of the United States largest trading partners. More trade negotiations and cooperation between theU.S. and Taiwan can possibly alleviate the negative impact of the U.S.-China trade war for U.S.companies. 

FAO Global Assessment:

Cross-Strait relations have experienced ups and downs in recent years. Strengthening Taiwan-U.S.relations may provide solid backing as there is currently a higher-level economic dialogue to push past trade conflicts and political obstacles, which both US and Taiwan could benefit bilaterally. Considering such issues, it is expected to see a Free Trade Agreement (FTA) launched between the U.S. and Taiwan. FAO Global predicts that if a free trade agreement is concluded, then Taiwanese businesses may be able to offer competitive alternatives to working directly with China. One of these ways is potentially mitigating tariffs imposed if the U.S.-China trade war continues. FAO Global sees potential for increased collaborations in the energy sector, fostering of innovations for the digital economy, and investment opportunities in electronic commerce for U.S. and Taiwan companies.

Event attended and analyzed by FAO Global Associate Sophia Song