1. Some facts

l Taiwan has a membership of WTO but also has trouble in signing FTA with important trading partners, such as US, Japan, and ASEAN. (Of course, China). US know this point very well.

l Admittedly, the expected benefits of a FTA between US and Taiwan are modest in terms of traditional tariff reductions. (There are two caveats about this line of arguments: Such kind of benefits will be multiplied if the trade in services, particularly the financial and telecommunication sector, or trade facilitation is included. Furthermore, the scale of benefits from the US-Taiwan FTA counted top 2 or 3 compared to that of any a FTA between US and East Asian countries under the same conditions or scenarios.)

l Taiwan has very strong political will to sign the FTA pact.

l We understand that the condition of cross-straits will decide most of affairs of US-Taiwan, including FTA. Specifically speaking, achieving a stabilized and predictable cross-strait relationship will effectively lower the US' political costs in signing an FTA with Taiwan and make it a more real possibility.

2. However, US must take it seriously that it without US’ FTA engagement will leave Taiwan out at any level of economic integration in East Asia.

3. Besides, according to Richard C. Bush III (2004), USTR cannot move forward on an FTA with any country unless it has political support from the relevant American business sectors, such as the American Chamber of Commerce in Taipei (AmCham), and their friends in the Congress. For USTR, an agreement that might have significant political or implementation difficulties is not worth the time it takes to negotiate.

4. We know that AmCham in Korea did promote a FTA between US and Korea. But what is the true “economic” opinion of AmCham in Taipei if they put the troublesome conditions of China-US-Taiwan aside in the first place?

That is to say, Mr. Richard C. Bush III argument is not flawless and therefore unfair to Taiwan.

5. Concluding remarks

l It’s relatively harmless for Taiwan’s absence in the FTAs in East Asia, which Japan, South Korea are not ins according to most of economists’ predictions.

l It’s the worst case that Taiwan is not only excluded by the powers in East Asia but also left behind by US. It’s reportedly that US has begun to negotiate a FTA with South Korea. If the US-Korea FTA comes true, so is the so-called “marginalization” of Taiwan. It sounds a little unacceptable that it is the very US who put the last straw.