US Should Bolster Trade Ties With Mexico, South Korea, Taiwan, Urges ITIF 'Linkages' Report

The growing "internationalization" of supply chains means the success of OEMs “depends greatly on the health and vitality of suppliers in other nations and the ability to pursue trade, ideally on mostly unimpeded terms, with them,” said an Information Technology and Innovation Foundation report on the “trade linkages” between the U.S. and Mexico, South Korea and Taiwan. Understanding trade and economic linkages within the context of “global value chains” (GVCs) can “intrinsically” place “consumer benefit at the focal point of trade discussions,” said the report, which advocates stronger U.S. trade ties with its three “key partner nations.” The increasing use of “trade liberalization,” including reducing tariffs and integrating more nations into the global trading system, has helped spur the expansion of GVCs, it said. “There are now well over 400 regional free trade agreements in place across the world, helping to reduce tariff rates and eliminate other trade barriers.” The report’s policy recommendations for Congress and the Trump administration: (1) Pursue a free trade agreement with Taiwan to make it “a more attractive location for sourcing advanced-technology production as an alternative to China”; (2) Ratify the U.S.-Mexico-Canada Agreement on free trade, which is “well-positioned to play an important role in supporting the flow of goods and services across North American borders”; (3) Continue confronting Chinese “innovation mercantilism,” including by “enrolling like-minded allies to contest” China’s bad trade behavior.