Joining the North American Free Trade Agreement

October 12, 1992

I am writing in support of your editorial of October 12, 1992, calling for the ROC to try to join the North American Free Trade Agreement (NAFTA). In my opinion, you are correct to point out the past reliance of the ROC and other Pacific rim nations on the vast consumer market in the United States. Also, joining NAFTA will make it easier to send investment dollars to the U.S., Canada, and Mexico. Finally, there is no reason to delay. The sooner that the ROC gets the ball rolling the better.

I would like to emphasize three additional benefits from joining NAFTA. First, joining NAFTA must improve the ROC's chances of joining GATT and the UN under conditions that the ROC can accept.

Second, we should not forget Taiwan consumers. For more than thirty years Taiwan has provided goods to American consumers that were superior in price-quality mix to what U.S. producers could offer. It is now time for Taiwan consumers to vastly increase their benefits from trade. Why should Taiwan consumers continue to pay tariff and quota-inflated prices? And why should they pay so that Taiwan producers can get fat selling in protected domestic markets? Joining NAFTA will reinforce and quicken the pace the government's plan to reduce import barriers.

Third, peace deserves a chance. If the fears of ROC citizen's about an invasion from the Mainland are even partly warranted, there is no better way to improve the alliance with American defense forces than to build stronger trade relations. It is highly likely that a principal result of NAFTA, assuming that it is approved, will be relaxed travel and immigration restrictions between members. With the currently increasing Chinese population in the U.S. and the shortage of reasonably-priced land in Taiwan, we might expect that many Taiwan families would extend themselves overseas. Such an extension must improve the prospects for military help from the U.S. in the event of the unthinkable.

Copyright © 1996 by James Patrick Gunning

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J. Patrick Gunning

Professor of Economics/ College of Business
Feng Chia University
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