Taiwan Trade with USA

After reading the articles about Chinese Tire tariff and Chinese Chicken Feet, I am thinking that international trade is very complicated. Every country wants to get the biggest profits in the trade, so countries usually do some in the tariffs. Moreover, China and USA are the important country in the world. Both of them have many consumers in the market. So many countries want to trade with them, for example, my hometown, Taiwan. China is the major country that Taiwan trade with. Taiwan is a small country, and relies on export to maintain domestic economics. And Taiwan wants to sign FTA contract with USA that can help Taiwan more openness and trade with more places.

However, Taiwan has the big problem with USA now. It is about American beef. USA wants to export American beef into Taiwan, but Taiwan government found that American beef have Ractopamine in the meat. And it is not legal in Taiwan. So the Congress of Taiwan fights a lot of this issue. President Ma said that customers have option; they can choose what they want and what they don’t want. The major issue is that Taiwan has to solve this problem and sign the FTA with more countries. Expending the trade places in the world is very important for Taiwan, because 70% GDP of Taiwan relies on export. And after this, Taiwan needs to sign TPP with Asian countries. Have to say, Taiwan lagged behind South Korea many now.

Trade Barrier in Taiwan

This week is talk about what kind of unintentional barrier affect international trade. And I want to talk about my country, Taiwan; we have some unintentional barrier in trade. There are natural disasters and political problems.

Taiwan which is in the tropical area has lots typhoons every year especially in summer. And also Taiwan has lots earthquake due to it is located the plate between the Pacific Ocean and the Indian Ocean. However, Taiwan is a island and locate in good position, I think it’s easy to trade with global. But compare with the near countries, Hong-Kong and South Korea, they have more trade than Taiwan. Why? I think it’s all because the weather. Typhoons and earthquakes affect the companies don’t want to trade with Taiwan.

Moreover, it is political problems. Because Taiwanese care political too much, people usually got fight in this issue. When the election is coming, the society is not stable. This is not government’s problem. Of course, president wants the economics in Taiwan is growing. It is all because people are emotional. And we have too many elections. In 2003, USA mentioned this problem before in a trade survey. With unstable society, international companies won’t trade with it. To sum up, compare with Hong-Kong and South Korea, they don’t have kind of problems. So they grow up in economics so fast.

Comparative Advantage in International Trade

According to the article of US auto in Carbaugh text, it shows the healthcare benefits really negatively affect comparative advantage. In this case, the big three companies in US was competed by Japanese companies. It all because that the big three cost much money to treat their active employees and retirees. Even the US government supply them solve this problem, GM Company still bankrupt. Relatively, Japanese automakers cost healthcare less than. In my opinion, in comparative advantage, Japanese automakers should produce more cars in the world, and US automakers can focus on different product.

And I want to talk about my country, Taiwan, which provides healthcare by nation. Taiwan is famous about producing semiconductor. Compare other counties which produce semiconductor, Taiwan has comparative advantage of it. It is that unit product price is lower than other counties; due to Taiwan provides national health insurance, companies can pay healthcare not so much.

Moreover, I want to talk about an agreement between Taiwan and China called ECFA (Economic Cooperation Framework Agreement) in June 29, 2010. This agreement protects Taiwan and China can trade more free and make Taiwan export to China more. But it makes that Taiwan decrease export to other countries, for example Japan, Euro and US. Meanwhile, Taiwan has significant comparative advantages of Electrical and Electronic anti see the retreat of global exports, even industry comparative advantage reversal phenomenon. Taiwan excessively focus on the China that makes some future problem.

How important about Taiwan’s openness

I want to talk about my country. I come from Taiwan. Taiwan is a small country which is little bigger than Rhode Island and next to China. According to Taiwan has special political problem in the world, which Taiwan has to be openness is very important. Taiwan is a small scale economy in the world. Due to the amount of investment is not really huge.

However, in my opinion, I think openness for Taiwan is very important. As I said Taiwan has special political problem, if Taiwan were not an openness country, that Taiwan will face some threaten from China. And then Taiwan maybe not exists anymore. So Taiwan has to be openness, find foreigner country’s help to become stronger state in the world.

Taiwan is a fairly successful example of economic development in the international community, and it plays a crucial role in the global division of labor and shared global markets. Being an openness economy in the world, interdependence is a big point for countries. Taiwan develops their country is successful, due to Taiwan is a democracy country. Moreover, our president Mr. Ma Ying-jeou wants to Taiwan joins a lot of conferences in the world positively, for example FTA (Free Trade Area). And make another contract with China; make sure that Taiwan can free trade with all countries to earn the biggest profit.