ABSTRACT
Given its diplomatic isolation, trade plays an especially important part in Taiwan's external relations. Foreign commerce, as Karl Deutsch and his colleagues wrote over four decades ago, can help to foster "relative acceptance" and mutual responsiveness among nations. The smaller Asia Pacific Economic Cooperation (APEC) countries face cross-pressure from their political and economic interests. Berlin's policy was to initially purchase Balkan exports, mostly agricultural and mineral products, at prices above the world market. Taiwan's evolving status in regional trade compares favorably not only with its own prior position, but also with the changing positions of other Asian newly industrializing economies (NIE) such as South Korea and Thailand. Hirschman's study also developed an unweighted average (UA) index which was intended to measure a country's average -- in contrast to WA's focus on its aggregate -- importance across each of its trade partners.
