Noneconomic Aspects of a US-Taiwan Free Trade Agreement: Insights with a New Tool

Economic considerations for bilateral or regional trade agreements are relatively straightforward, even given the challenge of measuring nontariff barriers. Noneconomic considerations, however, can be notoriously difficult to measure. In the case of US-Taiwan relations, one common factor defines the two countries’ security alliance: China. In this policy brief, we discuss a new metric we recently developed that uses Chinese propaganda as a gauge of noneconomic factors underlying the interest in closer bilateral trade ties between the United States and Taiwan. We find increasingly antagonistic and aggressive rhetoric in Chinese propaganda toward the US-Taiwan alliance at key points in time (such as official visits between the United States and Taiwan) that reflect movement toward closer bilateral ties. These findings, though not unanticipated, indicate a closer security alliance between the United States and Taiwan.

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To read the full report from the Mercatus Center, please click here.