Analysis: The 'Taiwan Model' for US Trade Negotiations

TaiwanPlus News

In an interview with TaiwanPlus, Daniel Liu from the Chung-Hua Institution for Economic Research (CIER) analyzes the ongoing trade negotiations between Washington and Taipei. He warns that Taiwan's willingness to export its unique science park model to the US as part of a deal is motivated by geopolitics more than economics. He also warns of a potential talent shortage among Taiwan's highly skilled engineers.

Transcript

00:00Daniel, we heard a lot today about the so-called Taiwan model of U.S. investment.

00:05But based on your understanding, what else does the U.S. want out of a U.S.-Taiwan trade deal?

00:11The requirement for the U.S. typically, you know, including the funding.

00:14The first one, you have to liberalize your domestic market.

00:17The second one, you have to increase the procurement from the government,

00:21ordinary procurement, also the military procurement.

00:25The third one is you have to increase your private investment in the U.S.

00:29The three, you know, cornerstones, the requirement by the U.S.

00:33However, we have to I think right now, if we believe the negotiation is still under the progress,

00:40we have to ask the U.S. may have to more the U.S. talents to support the Taiwan's investment in the U.S.

00:47to reduce the level of the outflow of the Taiwan elite engineers to the U.S.

00:54Yes, some have expressed concern about a so-called brain drain of Taiwan chip talent to the U.S.

01:00How big of a problem is that in your mind?

01:03In order to sustain the greenfield investment in the U.S., Taiwan in the future is very likely.

01:10Taiwan also has to export the talents from Taiwan to the U.S.

01:16As you know, Taiwan right now, you know, we are, you know, our population already declined, you know, starting from 2020.

01:23So we in Taiwan, we also show off the talent, show off, you know, the labor force.

01:30I think that is the problem we have to consider, you know, not only the outflow of the capital, but also the outflow of the talent.

01:39You know, Taiwan's science parks are a unique competitive advantage of Taiwan.

01:44That's made it a leader in the semiconductor industry.

01:47Well, what does Taiwan stand to gain from helping the U.S.

01:50build its own version of those?

01:52Or is their only goal to get relief from tariffs?

01:55I think that is a purely the result of the geopolitics, you know.

01:59I think that is a request by the U.S.

02:02government, geopolitical tension, considerations.

02:07So if this, if this is not purely from the economic motivation, that will affect Taiwan.

02:13I think that's for sure.

02:14We would not invest that much to the U.S.

02:17Even if the U.S. is an important, you know, market for Taiwan.

02:21So this is a very clear, okay.

02:24But right now, all the countries, including the, you know, the neighboring country for Taiwan have to negotiate with the U.S.

02:31to try to get the, you know, the travel, the travel reduction.

02:37So this is a challenge that Taiwan has to face.

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