Joe Biden signs into law bill approving US-Taiwan trade agreement to boost bilateral economic ties

US President Joe Biden on Monday signed into law a bill that approves the first agreement negotiated under the US-Taiwan Initiative on 21st Century Trade and commits the administration to consult Congress for future agreements under the initiative.

The agreement, signed on June 1, covers streamlining customs procedures, combating corruption and helping small businesses navigate regulatory procedures in both markets. It broadly aims to strengthen the US-Taiwan trade and economic relationship, but does not include any market-access provisions.

It is the first of several agreements expected under the 21st Century trade initiative, a framework for bilateral talks jointly launched by the two sides in June last year.

The bill, called the United States-Taiwan Initiative on 21st-Century Trade First Agreement Implementation Act, was first announced in June by leaders of the Senate Finance Committee and the House Ways and Means Committee. It passed the House the same month and the Senate in July.

Republican congressman Jason Smith of Missouri, the sponsor of the House version and chairman of the Ways and Means Committee, said last week as the bill headed to the president’s desk: “As China continues to threaten American interests, Taiwan has maintained a close trade relationship with America.”

“This legislation strengthens that relationship with this vital ally and ensures the American people have a powerful voice, through their representatives, in future trade negotiations,” Smith said.

The new law requires the Office of the US Trade Representative to show and allow Congress to review any future negotiating texts under the initiative before sharing with Taiwan; share any texts drafted by Taiwan within three days; and provide daily briefings to Congress during negotiating rounds.

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It also requires that future agreements not take effect unless the US president makes the text publicly available 60 days before entering into the deal and a bill approving it is enacted into law.

In a statement on Monday, Biden voiced concern over a portion of the law.

“In cases where the requirements of section 7 of the act would impermissibly infringe upon my constitutional authority to negotiate with a foreign partner, my administration will treat them as non-binding,” he said.

Congress in recent months has increasingly signalled its desire for the US to ramp up economic engagement with Taiwan.

Both chambers are now considering a bill authorising the administration to negotiate a tax agreement with Taipei that would offer residents in the US and Taiwan relief from double taxation. The bill cleared a key Senate committee last month.

South China Morning Post