Taiwan: Emerging Market for PA Energy

Member Group : PA Manufacturers' Assn.

One of the highlights of a recent two-week trip to Taiwan for PMA’s Vice President of Government Affairs, Carl Marrara, was a side-visit to a Pennsylvania trade office. The Office of Trade and Investment in Taipei is bursting with Pennsylvania trade deals from ice cream to tanks to what could be a whole lot of Pennsylvania natural gas and natural gas liquids.

“There’s a major move away from nuclear, coal, and oil-fired power to natural gas, but they can’t produce any of it on the island,” said Marrara, who was selected to be part of the Mosaic Taiwan Fellowship Exchange Program, sponsored by the Taiwan Ministry of Foreign Affairs. “They need the gas and the infrastructure and currently, they only have several hours in reserve capacity.”

He noted that Taiwan’s state energy firm, CPC, recently announced it would could start building its third liquefied natural gas (LNG) import terminal by the middle of this year. The proposed terminal, at Taoyuan, northwestern Taiwan, could start operations in early 2023 with an initial capacity of 1 million tons per year.

Taiwan is also one of the world’s largest plastics manufacturers, the building blocks of which are natural gas liquids – also in plentiful supply in Pennsylvania.

Marrara said that the Pennsylvania office, part of the Department of Community and Economic Development (DCED), is actively working on deals involving specialty food items being shipped from Philadelphia to Taiwan.

“One of the key advantages we have are the refrigeration capabilities at the Port of Philadelphia,” Marrara explained. “There are some of the largest refrigeration units in the United States at the Port of Philadelphia and with our agricultural and food manufacturing roots, it’s a no-brainer. The food culture in Taiwan is unlike any other place I’ve ever visited and they truly embrace Pennsylvania-made food products.”

Economic opportunities through the DCED office have sprouted up all over the state:

Foxconn, the world’s largest contract electronics manufacturer, invested in a two-year joint-research program with Carnegie Mellon’s Robotics Institute. For the last two decades, Foxconn has had an office in Harrisburg, which today has a staff of more than 30;

Kuang Tai Metal Ind. Co., Ltd., a Taiwanese supplier of high-quality welding materials and stainless-steel wire products, established a factory and sales office at Wilmerding, Allegheny County;

Taiwanese petrochemical firm Chang Chun Plastic Co., Ltd. established an office in Cranberry Township, Butler County;

Crystal Window & Door Systems. Ltd. established a plant in Benton Township, Lackawanna County.

Additionally, the Taipei Economic and Cultural Representative Office in the United States (TECRO) received approval from the U.S. State Department for a possible $2 billion Foreign Military Sale of M1A2T Abrams tanks to Taiwan. As part of the deal, the M88A2 recovery vehicle will be built by BAE Systems in York, Pennsylvania.

Pennsylvania companies have a presence in Taiwan as well.

“Air Products [headquartered in Allentown] has a large presence on the island,” he said. “And West Chester-based Weston Solution, Inc. won a $54.4 million design-build contract from the U.S. Department of State for the American Institute in Taiwan which serves as our de facto embassy and is an incredibly impressive facility. The institute serves as a physical symbol of America’s strong commitment to the people on Taiwan.”

Just this past May, the Pennsylvania House and Senate approved two resolutions to commemorate the 40th anniversary of the enactment of the US-Taiwan Relations Act (TRA) and improve the state’s relations with Taiwan.

The resolutions, sponsored by Pennsylvania Senator Gene Yaw (R-Lycoming) and State Representative Marcy Toepel (R-Montgomery), note that Taiwan is Pennsylvania’s seventh-largest export market in Asia, while the state is home to a growing number of Taiwanese companies.

According to the U.S. Census Bureau, in 2018, Taiwan was Pennsylvania 19th largest trade export partner – between Switzerland at 18 and Spain at 20. Exports to Taiwan increased more than 10 percent between 2017 and 2018 and is expected to keep rising.

“The US and the Republic of China (Taiwan’s official government name) uphold the same values of freedom and democracy and are bonded by their shared commitment to human rights, the rule of law and a free market economy, the resolutions state,” the resolutions said.

In a true people-to-people exchange, the Mosaic Fellows met with Vice President Chen Chien-jen and discussed international affairs, relations with mainland China, and Taiwan’s “New Southbound Policy” to enhance trade and economic ties with southeast Asia allies.

Launched in 2016, the New Southbound Policy is the initiative of President Tsai Ing-wen to enhance cooperation and exchanges between Taiwan and 18 countries in Southeast Asia, South Asia and Australasia. The policy was initiated to make Taiwan less dependent on the People’s Republic of China and to improve Taiwan’s cooperation with other countries including the United States and Canada.

Marrara said that Ing-wen and her party, the Democratic Progressive Party (DPP), received a big boost from the recent protests in Hong Kong over a proposed extradition bill supported by the Chinese Communist government. The protests occurred during his travel, as did the primary elections for the upcoming Presidential election in Taiwan. He said that there was a shared concern by many officials and think tanks that the Republic of China will attempt to influence the upcoming election.

“However, my understanding is that their elections are all paper ballot and extremely secure,” he said. “Any influence would likely come about through external pressure and media messaging purchased by the People’s Republic of China.”

Ing-wen faces off against pro-China mayor Han Kuo-yu of the Kuomintang (KMT) nationalist party in the 2020 presidential elections.

Marrara’s one possible regret over the two weeks: a sushi dinner that was among the best meals he’s ever had.

“Nothing will come close for quite a while, and don’t even get me started on the soup dumplings,” he said.