Taiwan and East Asian regionalism

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  • Two recent FTAs pose immediate challenges to Taiwan firms: EU-Korea and US-Korea

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  • Even with substantial economic benefits of ECFA, #Taiwan will experience negative impacts as East Asian integration proceeds

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  • Taiwan's first priority should be negotiating and signing FTAs with its major trading partners in East Asia

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Taiwan and East Asian regionalism

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This paper was prepared for Taiwan’s Future in the Asian Century: Toward a Strong, Prosperous and Enduring Democracy Conference, American Enterprise Institute, Washington, DC, November 10, 2011.

The goal of this paper is to describe Taiwan's place in the global economy and to analyze the impact of growing East Asian regional trade and investment initiatives such as the ASEAN Plus Three Agreement (APT) and the Trans-Pacific Partnership Agreement (TPP) on Taiwan's economy. The first section of the paper presents a brief snapshot of the Taiwanese economy and Taiwan's place in world trade and global supply chains. Subsequent sections describe major development in East Asian integration over the past decade: the large increase in the number of bilateral free trade agreements; the push for greater intra-Asian trade integration through the APT and other configurations; and, finally, the alternative path for trans-Pacific regionalism, as evidenced by the TPP.  The final section lays out a set of options for Taiwan given the dangers of trade-destroying discrimination and isolation through exclusion from future East Asian regional economic institutions.

Claude Barfield is a resident scholar at AEI

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