Moderator: Welcome to Viewpoint. Today our guests Mr. Fadah Hsieh and Mr. John Chen-Chung Deng are online to take your questions on the prospects and challenges of a U.S.-Taiwan free trade deal. We have many questions, so let's begin.

Moderator: Hsieh and Deng: Thank you. It is nice to have this opportunity to talk with you all online.

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Miami, Fla.: Are Taiwan's relations with mainland China improving? I've heard that there are 500,000 Taiwanese living and working on the mainland.

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Hsieh: It is true that Taiwan is a leading investor in China's economy. Taiwan's businesses have helped to integrate Chinese companies into global supply chains. For the time being, there is a natural division of labor between Taiwan and China. Companies can perform higher value-added operations in Taiwan, while outsourcing simpler operations to China. But this will change over time as costs in China increase, and as China gains managerial and competitive skills of its own. Taiwan, meanwhile, is transforming itself into a knowledge-based economy and expanding the role of production services.

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Georgetown, Washington, D.C.: What is a free trade agreement and why is it important for Taiwan?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Deng: 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 U.S.' 8th largest trading partner 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 that 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 Taiwan's neighboring countries, including Korea, Malaysia and Thailand, and many of these countries' products compete directly with those of Taiwan in the U.S. market. Added to that are China's efforts to develop deeper trade relations with the 10-member ASEAN group. If such efforts succeed, the resulting scenario would be troubling for Taiwan, since we could face being bypassed by this wave of regional economic integration. Trade and investment flows would be diverted from Taiwan to other destinations in Asia where FTAs are in place. Such an outcome would result in negative consequences for Taiwan's future economic development and competitiveness.

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Dallas, Texas: The U.S. and Taiwan already have a Trade and Investment Framework Agreement (TIFA) in place. Can this lead to an FTA?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Hsieh: Our bilateral Trade and Investment Framework Agreement (TIFA) has been in place since 1994 and has allowed the U.S. and Taiwan to make progress in resolving a number of economic issues of mutual interest ˇV including improved protection for intellectual property rights, access for U.S. rice and pharmaceuticals products, and liberalization of the telecommunications sector. U.S. trade officials suggested that we use an "enhanced TIFA"process to reach new bilateral agreements in areas like government procurement and investment. Taiwan considers the "enhanced TIFA"process as a step toward eventual negotiations on a bilateral free trade agreement.

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Bethesda, Md.: Some have suggested that Taiwan could take a "building blocks" approach to the FTA ˇV negotiating individual bilateral agreements on government procurement, investment and other issues. Is this a viable approach for Taiwan to pursue?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Deng: Taiwan is in fact considering putting certain "building blocks"in place toward an eventual FTA. We have discussed with USTR and other U.S. officials the possibility of negotiating a bilateral agreement on government procurement and a bilateral investment agreement. Working on the government procurement and investment agreements provides a "bridge"to the FTA, because these can form the basis for FTA chapters on procurement and investment. We think that a "building block"approach is also a good way to keep momentum going for closer bilateral economic ties while we continue to push for FTA negotiations in the near future.

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Friendship Heights, Washington D.C.: The President's Trade Promotion Authority expires at the end of June. What effect will this have on Taiwan's plans to pursue an FTA with the U.S.?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Hsieh: Other governments generally will only negotiate trade agreements with the United States if they can be sure that the agreement they have negotiated will not be changed when it reaches Congress for approval. The importance of Trade Promotion Authority (TPA) is that it provides for a "yes-or-no"vote on trade agreements in Congress, without amendments and within certain timeframes. Taiwan has won considerable support from the U.S. Congress for negotiating a bilateral FTA agreement. We would prefer to proceed with the FTA negotiations once TPA is again in place, which we hope will happen soon. In the meantime, we will continue our efforts to promote negotiation of the U.S.-Taiwan FTA with the private sector, Members of Congress, and important decision makers in the U.S.

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Centennial, Colo.: In what areas are U.S. agricultural exports to Taiwan likely to expand under the FTA?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Deng: Taiwan has long been one of the major export destinations for U.S. farm products, from wheat to corn to pork. In 2005, for example, U.S. farm exports to Taiwan totaled $2.3 billion. This strong trade relationship suggests that an FTA with Taiwan could provide great benefits for U.S. farmers and ranchers. Taiwan is already a leading market for U.S. exports of U.S. soybeans, feed grains, apples, peaches, plums, cherries, apricots, corn, celery, lettuce, cabbage, asparagus, broccoli, onions and bovine hides. Economic studies on the FTA suggest that Taiwan would be a very promising market for U.S. exports of fish, foodstuffs and processed foods.

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New York City, N.Y.: The Democrats in Congress want stronger emphasis on labor and environment issues in trade agreements. What is Taiwan's view on negotiating on labor and environment issues?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Hsieh: Taiwan has an excellent record on labor and environmental policies. We do not see these issues as an impediment for us in a free trade agreement.

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San Francisco, Calif.: How will an FTA between Taiwan and the United States help Taiwan integrate better with the rest of East Asia?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Deng: Taiwan views the FTA with the U.S. as a means of diversifying its economic and investment relations with trading partners. Closer economic ties between Taiwan and the U.S. are important for their own sake. In addition, we approached trading partners in Asia to explore possibilities for FTAs, and we hope that, after we start with the United States, they will follow the U.S. lead. With the faltering of the WTO Doha negotiations last year, our partners in Asia have negotiated a complex network of FTAs and cooperation agreements that, for the moment, exclude Taiwan. Once we complete an FTA with the United States, we believe that many other doors will be opened to us in Asia. In this way, the FTA with the U.S. becomes a key feature of our future economic competitiveness in our region and with the rest of the world.

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Detroit, Michigan: Are there any industries in Taiwan or in the U.S. which will be adversely affected by U.S.-Taiwan FTA? What will Taiwan government do to address concerns voiced by its vulnerable industries regarding the FTA? Is Taiwan really well prepared to launch an FTA with the U.S.?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Hsieh: Taiwan is in a good position to begin negotiations on an FTA with the U.S. The Taiwanese government has already reformed many of its policies regarding the few trade barriers cited by the U.S., including those in the pharmaceuticals sector and for strengthening intellectual property rights protection. As may be the case in the U.S., some industries in Taiwan will face increased competition as a result of the FTA, but we think that there will be little of this because of the highly complementary nature of our two economies.
Taiwan's economy is relatively open in most manufacturing sectors and for many service sectors. The agriculture sector, by contrast, has liberalized to a lesser extent, although many tariff barriers were lowered as a result of Taiwan's accession to the WTO in 2002. The government already has in place a number of programs to encourage Taiwan's farmers to specialize in horticultural products and higher value-added production. This is meant to help them adjust to the opening up of the market that has taken place so far.
The rice sector is one area that will need special attention from the government as Taiwan's economy continues to undergo liberalization. Direct financial assistance to farmers by the government (not tied to production) is one of the ways under consideration to manage the transition. Training in shifting to other crops could be undertaken, as can programs to improve product quality and assist with marketing efforts as farmers move into new product lines.
Additionally, it may be feasible for Taiwan to institute a Trade Adjustment Assistance-type program, similar to the U.S. program, to help any workers displaced by trade agreements with new training opportunities and other assistance. It is important to note, as well, that Taiwan may have to liberalize these sectors as part of multilateral negotiations in the WTO.

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Wheaton, Md.: Will the U.S. lose any political capital with China if it follows through with this possible FTA?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Deng: Due to the close economic and trade relations between US and Taiwan and that of Taiwan and other countries in Asia, an FTA between US and Taiwan would enhance the networking of the US interest in the Asia Pacific region which will act as additional capital for the US to maintain its strategic presence in the region, politically and economically.

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Salt Lake City, UT: What does the Taiwanese government think of the Most Favored Nation status China receives already from the U.S.? Would a Taiwan-US bilateral agreement be viewed by the Chinese as a direct economic threat?

Steve

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Hsieh: Taiwan has no objection to see that the U.S. grants China preferential trade treatments such as PNTR. Many Taiwanese enterprises invest in China and establish business network in China, and both sides have developed a more and more interdependent economic relationship for the past decades. We believe a benignant economic relationship between the U.S. and China is beneficial for Taiwan because it creates a win-win-win circumstance for 3 parties.
The same rationale also applies to the U.S.-Taiwan FTA. Given the deep economic engagement cross strait, an energetic U.S.-Taiwan economic relation is definitely good for China for immediate business interest and for China's long-term economic development.

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Paris, Texas: I think the suggestion of a FTA agreement with Taiwan is a joke! The same international politics, which allows for it to roughly co-exist beside China caused the Taiwanese government's inclusion into the WTO in 2002 to be hindered by cumbersome titles and provisions, which limit its growth and continue to seek to diminish Taiwan's international presence. The U.S. needs to embrace greater free trade in China in order to open up its government to greater liberal measures both economically and politically. Taiwain is only a distraction. Thoughts?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Deng: Economically, Taiwan plays a crucial role even in the context of U.S.-China relations under the grand structure of globalized supply chain. Taiwan is also important to the U.S. industries and its economy as a whole since Taiwan is presently the United States' eighth largest trading partner overall and 11th largest export market. In addition, Taiwan has long been one of the major export destinations for U.S. farm products, from wheat to corn to pork. This strong trade relationship suggests that an FTA with Taiwan could provide great benefit to consumers, farmers, and enterprises in the U.S.
As a strong economy and a true democracy and an economic success story like President Bush indicated, Taiwan holds not only secular interest but also values the U.S. cherishes, I believe Taiwan is writing an important page of history, not a bargain chip or distraction under the U.S.-China relations.

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San Francisco, Calif.: Is the Taiwanese desire to see this FTA with the US approved simply a reaction to their exclusion from the regional China-ASEAN agreement earlier this year?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Hsieh: I don't think so. A free trade agreement between the U.S. and Taiwan will benefit from both Taiwan and the U.S. trade and investment relations with China. We are careful to maintain a full range of economic relationships with other trading partners, even as others in the Asia-Pacific region pursue FTAs that so far exclude Taiwan. The U.S.-Taiwan FTA would be a visible and specific means of enabling Taiwan to pursue regional integration with its neighbors in the Asia-Pacific.

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Madison, Wis.: Hello,

Given the recent allegations of corruption and scandal surrounding the Taiwanese "seemingly" democratic government, wouldn't the US trade undermine attempts to reform once new leaders begin receiving more foreign direct investment?

Carolyn

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Deng: I don't agree that Taiwan is a "seemingly"democratic government. Its leaders are directly elected by its people. Taiwan is a fully-fledged democratic country that has delivered prosperity to its people, as indicated by President Bush on Nov. 16, 2005 in Kyoto.
We are convinced that it is US trade policy to ensure that FTAs will benefit the peoples and industries of the US and its FTA partners.

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Houston, Texas: At the APEC meetings in Hanoi last year, it was announced that APEC members will study the feasibility of negotiating a Free Trade Agreement of the Asia-Pacific (FTAAP) that could serve as a back-up plan for liberalizing trade in the region, in case the Doha Round of negotiations at the WTO cannot be revived shortly. What does the FTAAP mean for the FTA between the United States and Taiwan?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Hsieh: We understand that APEC members are in the process of studying the FTAAP idea and will report their findings at the APEC Leaders' meeting in September this year in Sydney. We also understand that the U.S. supports the initiative of FTAAP as a long-term goal. In the short term, however, the U.S. intends to concentrate its efforts on the Doha negotiations, working with Congress to renew the President's Trade Promotion Authority, and working to conclude FTAs with Asian countries; notably Korea and Malaysia.
We support the idea of placing priority on concluding the WTO Doha Round negotiations successfully, and we are pleased to see the resumption of Doha Round in February because a sound multilateral trade mechanism is the most desirable option for all members in the WTO and the global trade system. We believe the Doha Round and FTAAP should be complementary to facilitate global trade liberalization. That's why we also concur with the U.S. that the FTAAP could provide a long-term framework for moving comprehensive trade liberalization forward among APEC's 21 member economies. Taiwan will also look forward to discussing the FTAAP concept with our APEC partners. In addition, Taiwan has set a short-term goal to launch FTAs with key trading partners like the United States. Taiwan's efforts to negotiate bilateral FTAs would help to preserve and maintain momentum for promoting open, fair and free trade liberalization at the WTO and in APEC.

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Capitol South, Washington, D.C.: The mid-term elections last year in the U.S. changed the composition of Congress in ways that may have increased the legislature's anti-trade sentiment. With the President's Trade Promotion Authority expiring on June 30, 2007, and new legislation required to extend it beyond that time, why is Taiwan continuing efforts to pursue negotiation of a bilateral free trade agreement with the U.S. when prospects for TPA renewal overall do not look very favorable?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Deng: We understand the fact that Trade Promotion Authority is expiring, and it is not clear whether it will be renewed immediately. However, there are several reasons why Taiwan is determined to keep pushing for an FTA with the U.S. at this juncture. First, whether TPA is renewed or not, the United States will continue to pursue international, regional and bilateral trade objectives. Second, in the past the United States has launched free trade agreements without Trade Promotion Authority (also known as "fast track"authority) being in effect. Third, agreements - even quite complex ones such as FTAs - can be approved and implemented without TPA. The best example of this is probably the US-Jordan FTA. Like Jordan, Taiwan has unique geopolitical significance to the United States, and we believe, on the economic merits, that an FTA between the U.S. and Taiwan will be beneficial for both economies. Fourth, the Bush administration has stated its intention to pursue new TPA legislation, and USTR is consulting with Congress to achieve that objective. Convinced that closer trade ties between Taiwan and the United States will bring great mutual benefits, we consider that the U.S.-Taiwan FTA offers an excellent example of the value of trade liberalization for both our economies. For all these reasons, we intend to continue our efforts to work with the Administration to launch FTA negotiations with Taiwan in the near future.

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Baltimore, Md.: Some people believe that Taiwan's FTA initiative with the United States is more political than economic. What is your view?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Hsieh: We have concentrated on the economic merits of an FTA between the United States and Taiwan. At the same time, it can be said that every FTA is both economic and strategic. The FTA would help Taiwan address geostrategic issues in Asia, such as negotiating FTAs with Japan and Singapore, and would assist Taiwan in diversifying its trade and investment relationships with key trading partners.

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Boston, Mass.: What effect will a U.S.-Taiwan FTA have on U.S.-China relations and on China's booming economy?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Deng: With Taiwan still a leading investor in China's economy, an economically stronger Taiwan is good for the Chinese economy. Taiwan has recently decided to diversify its investment relations in Asia, and negotiating the FTA with the U.S. would open doors to Taiwan to negotiate similar agreements in the Asia Pacific region and elsewhere. The U.S.-Taiwan FTA serves as a confidence-building mechanism that will permit Taiwan to be more open towards China.

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Washington, D.C.: Hello,

Why do you feel with the failure of so many free trade agreements in the U.S. to even pass Congress that Taiwan represents an alternative outcome? Shouldn't Taiwan focus more on Australia and other closer Pacific partners. Just because APEC is stalling doesn't mean the only solution is a U.S. bilateral agreement.

Jim

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Hsieh: A free trade agreement between the U.S. and Taiwan would be a logical and appropriate component in U.S.'s efforts to achieve greater trade liberalization in important APEC region markets. An FTA between the U.S. and Taiwan would advance U.S. efforts to increase trade with the Pacific Rim, building on the accomplishments marked by implementation of FTAs with Chile, Singapore, Australia and Central America and others. Of course, Taiwan will continue contributing to the FTAAP proposed by the U.S. and seeking FTA with closer Pacific partners to create free and open trade and investment relations in the region.

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Chicago, Ill.: I've read that Taiwan wants to be an innovation hub in Asia. How would an FTA with the United States help bring this about?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Hsieh: Taiwan has an edge in the high tech sector already. A number of multinational firms have established "R&D centers"in Taiwan, and use Taiwan as a base of operations for the rest of East Asia. An FTA with the United States would accelerate this trend. Taiwan's strong record of achievement in protecting intellectual property rights would be further enhanced under an FTA, making us even more attractive as a destination for high tech investment in Asia. We are upgrading Taiwan's infrastructure and transforming ourselves to a "knowledge-based economy"in anticipation of these changes.

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Kansas City, Missouri: How can we be sure that products being imported under a U.S.-Taiwan FTA are really from Taiwan, and not from China?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Deng: All FTAs have "rules of origin"that specify how much content from within the free trade area must be present to qualify a product as "originating"under the FTA. The U.S. and Taiwan under an FTA would develop detailed rules of origin spelling out how manufactured products and inputs would qualify for FTA duty-free treatment. The rules would be structured to allow some content from outside the FTA to be included in products and supply chains, but they would be intended to ensure that the benefits of the FTA accrue to the FTA parties, and not to those outside the FTA.

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Capitol North, Washington, D.C.: Why would a free trade agreement with Taiwan be good for the United States?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Hsieh: The U.S. has traditionally been Taiwan's largest trading partner and largest investor, and Taiwan's industries are largely complementary to those of the U.S. In economic studies that have been done on a U.S.-Taiwan FTA, the analysis shows that U.S. exports would grow by as much as $6.6 billion annually, more than the U.S. has gained from many of its other FTAs. In addition, these studies show that the overall welfare gains to the U.S. economy are greater than those from 10 other current or potential FTA partners, including Australia, Singapore, Chile, Morocco, Central American countries and Malaysia. Taiwan's economy is highly complementary with that of the United States, contrasted with that of South Korea, for example. U.S. and Taiwan companies have already worked closely together in the electronics and IT sectors. In addition, Taiwan's firms have moved up the value chain in the types of goods and services they supply to U.S. companies. More generally, Taiwan plays an increasingly important role in today's globalized economy by helping to integrate U.S. industries' supply chain systems and logistics with suppliers within Taiwan and across the wider Asia Pacific region. An FTA between the U.S. and Taiwan makes a lot of economic sense.

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Foggy Bottom, Washington, D.C.: How can Taiwan negotiate a free trade agreement with the United States since China is certain to object?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Deng: It is true that we can expect China to oppose anything that Taiwan proposes. At the same time, U.S. officials have been clear in stating that China does not have a "veto"right over U.S. trade policy. From an economic standpoint, it is logical for two close trading partners, such as Taiwan and the U.S., to pursue further trade liberalization through negotiation of an FTA. In addition, the Taiwan Relations Act sets out the basic legal framework for U.S.-Taiwan bilateral relations, and an FTA would certainly be consistent with the aims of that Act, as the FTA would provide a way to promote and solidify bilateral economic ties. It is important to remember that Taiwan and the United States have in place more than 100 bilateral trade agreements governing specific aspects of the economic relationship.
The WTO provides the international legal framework for negotiating FTAs. As a WTO Member, Taiwan can pursue regional and bilateral trade agreements with any other WTO Member, as long as it honors the specific WTO rules in doing so.

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Arlington, Va.: Does Taiwan have FTAs with any other WTO Members?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Hsieh: Yes. Taiwan has negotiated FTAs with several trading partners in Central America. Agreements are in place with Panama, Guatemala and Nicaragua. We have completed FTA negotiations with El Salvador and Honduras. Taiwan is in the process of negotiating an FTA with the Dominican Republic. We have also approached others in Asia. We are hopeful that after our successful launch of negotiating an FTA with the United States first, then they could follow.

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Silicon Valley, Calif.: How will a bilateral free trade agreement with the United States benefit Taiwan?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Deng: Taiwan's economy is highly complementary to that of the United States. U.S. and Taiwan industries already cooperate intensively in many high tech areas, particularly in the information technology sector. The FTA will provide opportunities for broader economic cooperation in additional sectors, and to attract new areas of investment from the United States. The FTA would also encourage Taiwan to put additional economic reforms into place, making our economy more efficient overall. We think that the FTA will also help us integrate more effectively with the rest of East Asia, as FTAs with other trading partners in the region are likely to follow that with the United States.

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Seattle, Wash.: The U.S. is about to finish negotiations with South Korea on a bilateral FTA. How will this affect U.S.-Taiwan trade relations?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Deng: Taiwan's expectation is that the KORUS FTA between South Korea and the United States will result in "trade diversion"from Taiwan to South Korea. Because South Korea and Taiwan both produce many similar products (semiconductors, flat panel displays are two examples), the U.S. FTA with South Korea could mean that trade in such products will shift from Taiwan to Korea. An FTA between Taiwan and the U.S. would help to "level the playing field"for us. The maintenance of Taiwan's competitive edge in the world market is important to continue Taiwan's prosperity, which is in U.S. interest.

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Arlington, Va.: Congratulations to Mr. Deng on his new position as Chief Negotiator in MOEA's Office of Trade Negotiations. Could you please explain the rationale behind the creation of this office and position? Why did Taiwan see the need to make this change to its bureaucracy, and what impact might it have on the way that Taiwan approaches trade negotiations in the future? What challenges do you foresee, both in the short and the long term, as you step into this new role?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Deng: As Taiwan will participate more and more in trade negotiations in the future, we need to have an office that can more effectively coordinate with relevant agencies so that we can engage more actively in those negotiations.

Also, in the past, individual ministries have been responsible for trade negotiations on issues concerning their particular area of concern. Our new office will allow the various ministries and departments to come together and coordinate on trade negotiations, thus allowing for more balanced trade agreements.

We hope that this new office will allow Taiwan to make more contributions to the liberalization of world trade.We expect to face many challenges, such as the expansion of bilateralism and resistance to globalization. Nevertheless, we intend to work very closely with our trading partners and business communities.

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Los Angeles, Calif: How are cross-straits relations changing as Taiwan and China do more business together?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Hsieh: Under the policy guidelines of "proactive management, effective liberalization"¨Taiwan has been broadening the range of industries permitted to invest in China and of Chinese products permitted for import into Taiwan. Both sides of the strait have reached agreement on allowing direct charter passenger and cargo flights during designated periods. Direct charter passenger flights have been operating, and will continue to operate, between Taipei and Kaohsiung and Shanghai, Beijing, Guangzhou and Hsia-men around specified traditional holidays.

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Dupont Circle, Washington, D.C.: What industries stand to gain from the U.S.-Taiwan FTA?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Deng: Taiwan's economy is already very open to U.S. exports. We have removed many barriers and lowered tariffs as a result of our accession to the WTO on January 1, 2002. The studies performed on the gains from a U.S.-Taiwan FTA show clear benefits for the U.S. in areas like financial services, transportation, education and telecommunications. U.S. agricultural exports should also increase ˇV we estimate by as much as $500 million per year. The U.S. and Taiwan information technology industries are already very closely intertwined. We would expect cooperation in the IT sector to deepen and grow under the FTA. In general, in view of the complementary industrial structure of our two countries, an FTA between the U.S. and Taiwan would produce broad-based gains for both economies, while largely avoiding disruptions or economic displacement as a result of trade competition.

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Arlington, Va.: Given that the TIFA negotiations with the United States is moving forward again, and that Taiwan has been removed from the priority IPR watch list, what other serious obstacles does Taiwan face in furthering your trade agenda with the U.S.? Why do you think that a US-Taiwan FTA is failing to get traction in the U.S., even with so many people in Congress speaking out in favor of such an FTA? What are you doing to overcome these obstacles?

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Hsieh: Due to the extremely closed economic relationship that Taiwan has with the US, as well as Taiwan's efforts to address the US' concerns over the past few years, there are actually not that many issues remaining in the sphere of US-Taiwan trade. However, there are still some improvements to be made with regard to pharmaceutical products and agriculture. We are confident that these issues will be properly addressed in the near future and that the resolution of such issues will help to increase the support shown by US industries for negotiations on a Taiwan-US FTA.

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Moderator: Mr. Hsieh and Mr. Deng, thank you for answering our questions. It's been a pleasure having you both online for this discussion.

Mr. Fadah Hsieh and Mr. John Chen-Chung Deng: Hsieh and Deng: Goodbye and thank you for your interest in this topic. We enjoyed this discussion very much.

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