The U.S. is Taiwan's largest trading partner, and will remain so in the foreseeable future. According to statistics, in 1999, Taiwan exports to the U.S. totaled US$30.9 billion (making up 25.4% of Taiwan's total export volume), up by 5.2% over the same period of 1998; and imports from the U.S. amounted to US$19.7 billion (making up 17.8% of our total imports) up 0.1%. The ratio of Taiwan's export dependence on the U.S. market was 24.2% in 1997, 26.6% in 1998, and 25.4% in 1999.
For 1998 and 1999, Taiwan was the seventh largest trading partner of the U.S., its eighth export market, and its seventh import market. The U.S. was Taiwan's largest trading partner, its largest export market and second import source. Bilateral trade between Taiwan and the U.S. has increased seven and half times over the past 20 years.
It's not easy to understand clearly how close the relationship between the U.S. and Taiwan is from the figures alone. The information technology (IT) industry, for instance, has become the most important locomotive of Taiwan's overall economic growth. In volume on IT and integrated circuit production, Taiwan ranks third and fourth in the world, respectively. Taiwan provides electronic equipment, as well as parts and accessories, to computer companies and related technological industries in the U.S.
The earthquake that struck Taiwan on the September 1999 caused inestimable loss and also was felt strongly by U.S. high-tech companies such as Compaq, IBM, Dell and HP. All of these big computer companies suffered from the resulting imbalance in demand and supply, and from the first pressure for rising prices in five years. American companies regard Taiwan not only as a major market but also a key link in their supply chain. This situation will surely last for a period of time, and the U.S. and Taiwan's mutual economic dependence has become more obvious than ever following the earthquake of September 21st.
Information technology will define the new millennium and Taiwan plays an increasingly important role in the international IT industry. This year, Taiwan will host the 2000 World Congress on Information Technology (WCIT2000) from June 11th-14th in Taipei.( This significant event will attract 1,200 IT leaders predominantly from the U.S., and promises stimulating and timely discussions on critical issues with global impact. Participants will include top executives of the IT industry, venture capitalists, IT users, leading scholars and government officials from around the world for networking, developing new business opportunities and relationships, and exchanging ideas. Therefore, you may recognize that Taiwan already plays an important role for the global information technology industry.
Taiwan's influence on the U.S. market is not limited to the hi-tech or semiconductor industries. Taiwan is the third largest medical device market for the U.S., the ninth biggest buyer of American automobiles (the import value reached US$1.16 billion for January to October 1999), and Boeing aircraft's main market in Asia. Up to end of October 1999, our foreign direct investment in the U.S. was valued at US$4.38 billion, making us the second largest Asian supplier of foreign investment in the U.S., after Japan. At the same date, U.S. investments in Taiwan reached an accumulated total of US$9.14 billion. The U.S. is the largest source of foreign investment for Taiwan, and Taiwan is the 10th largest purchaser of U.S. bonds and stocks.
U.S. farmers have suffered a very serious imbalance in supply and demand during the past two years; the prices of agricultural products have sharply declined, causing drastic damage to the livelihoods of farmers. Taiwan sent a timely good-will agricultural product mission to the U.S. in September of 1998 and carried out procurements worth US$1.15 billion. The effects of this were reflected the following year, when Taiwan jumped to fifth place among importers of U.S. agricultural goods with a procurement amount about three-and-a-half times that of mainland China. In terms of purchasing amount per capita, Taiwan's people are in first place.
Furthermore, people should not underestimate the great economic potential of the Asia-Pacific region. Taiwan is situated at a favorable position in the region, so the U.S. needs to open its eyes widely and carefully evaluate the regional commercial environment as a whole. Taiwan also looks forward to U.S. support in encouraging American business participation in the plan to establish Taiwan as an Asia-Pacific Regional Operations Center, so that Taiwan can serve as a bridge to Asian Markets for US companies.
Taiwan and the U.S. have already reached agreement on Taiwan's accession to the WTO, and continued work on joining the organization is one of Taiwan's most important tasks. Taiwan will continue working closely with the U.S. on the strong foundation of friendly relations that already exists in order to achieve the goal of WTO membership. Taiwan is seeking observer status in OECD committees, the WCO Kyoto Convention, and other multilateral organizations. Also, Taiwan hopes to promote cooperation with the U.S. on multilateral issues such as trade and investment liberalization under the structure of APEC. Taiwan and the U.S. look forward to continued close trade relations and prospects for their future continue to become brighter.
For further information, contact the Commercial Division, Taipei Economic and Cultural Office in Atlanta.
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