U.S.-Taiwan trade conflicts (1984-1989): The political economy of accelerated trade liberalization in Taiwan

The acceleration of trade liberalization has been one of the main characteristics of Taiwan's economic liberalization since 1984. This study focuses on the political reasons that caused Taiwan's trade liberalization to accelerate since 1984.; Taiwan shifted to its export-oriented policy in the late 1950s, when it adopted a neo-mercantilist strategy to promote export through many incentives, and restrained imports by tariff and non-tariff barriers. This strategy plays an important role in leading to Taiwan's huge trade surplus with the U.S. The surplus has expanded to US{dollar}10 billion since 1984 and brought increasing U.S. pressure for Taiwan to liberalize its economic system.; Generally speaking, there are two major approaches that are used to explain economic policy change in Taiwan. For statists, a strong and autonomous state is necessary for policy change. However, for some economists, ideology change is a prerequisite for crucial policy change. As for mercantilist interdependence theory, which argues that increasing economic interdependence will erode a country's national autonomy in economic policy-making, it has not been used to investigate policy change in Taiwan.; In this research, we find that neither the state theory nor the ideology approach can explain the acceleration of Taiwan's trade liberalization. The evidence suggests that the external U.S. pressure is the only positive factor that resulted in the acceleration of Taiwan's trade liberalization.; The implication of this research is that while prior research only focuses on the role of state, in future research, attentions should also be given to significant external variables. Moreover, external influence might also have positive effects on strengthening the state's autonomy in relation to external force and in improving its external dependence.