WorldCity, Annual Report: No. 11 Taiwan- Playing the tech card | Connecting Local Business Leaders To The Global Economy

Annual Report: No. 11 Taiwan- Playing the tech card

July 3rd, 2006

Georgia’s vigorous trade with Taiwan’s could gain even more power if a free trade pact is implemented.

Georgia’s trade with Taiwan is growing at a rapid clip, with both imports and exports rising dramatically. A free trade agreement promises to accelerate the commercial exchange even more.

Trade between Georgia and Taiwan reached $2 billion in 2005, a rise of almost 30 percent.

Eugene Chen, the commercial director of the Taipei Economic and Cultural Office in Atlanta, predicted that Georgia would see continued trade growth if the United States and Taiwan work out details on a proposed free trade pact. A bill opening the door to such an agreement was introduced in the U.S. House of Representatives in early 2006. Chen said an FTA could boost current trade levels between the two countries by as much as 16 percent annually.

Georgia’s current trade exchange with the Asian nation is a lopsided one: For every dollar’s-worth of products that Georgia exports to Taiwan, it imports two. Further, Georgia’s $1.4 billion in imports from Taiwan last year reflected a 26 percent increase. The import list was led by $221 million-worth of transmission devices for cellular phones. That’s a jump of 365 percent from 2004.

Some of the fastest-growing imports are technology-linked products, one of the most important components of Taiwan’s manufacturing sector, where key players include Acer, AsusTeK, Quanta and BenQ. High Tech Computer Corp. (HTC), a Microsoft outsourcing company that produces Windows PDAs, is also a major player. According to the Taipei Trade Office in Atlanta, HTC’s stock price has risen more than 1,000 percent since 2003. HTC’s chairwoman is Cher Wang, the daughter of Taiwanese petrochemical tycoon Y.C. Wang.

Overall, the United States buys about 18 percent of the high-tech products that Taiwan trades on the global market.

Georgia’s imports of Taiwanese computer parts reached $126 million in 2005, a jump of nearly 177 percent. And color televisions and computer monitors rose 231 percent in value to close the year at $32 million – although imports of computers themselves fell 35 percent, totaling less than $82 million.

Although imports dominated the trade exchange – Georgia has a $676 million trade deficit with the Asian nation – exports saw the biggest growth. Georgia shipped $677 million in goods to the Asian nation in 2005, a 38 percent improvement from the year before.

Some $117 million in optical fibers, $70 million in regional jet parts and $40 million-worth of heterocyclic chemicals were the leading products headed to Taiwan through Georgia. The state also shipped $32 million in kaolin clays, which are added to paper as a filler and used in other commercial processes. Georgia is the United States’ top kaolin clay exporter after Virginia.

Declines were registered among exports of telephone components and cotton, one of the most traditional agricultural products in the Southeast. Some $28 million in telephone equipment was sent to Taiwan in 2005, a 10 percent drop from a year earlier. Cotton experienced a harder hit, falling 30 percent to end the year at $22 million.

Taiwan is especially protective of its agricultural sector. Chen said a free trade agreement would benefit U.S. agricultural producers the most. However, agriculture makes up only about 2 percent of Taiwan’s GDP.

The United States had been Taiwan’s leading trade partner until 2003, when China took its place behind a big jump in China’s imports from Taiwan. Japan and the United States remain the top exporters of goods to Taiwan, although China has closed in at third place.

Chen projected that a free trade agreement would push the United States back to the top trade partner position.