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asia policy The TPP will require Taiwan to undertake comprehensive reforms that may prove politically difficult, raising the core question of whether the government can persuade a wary population to support a regional trade agreement that many see as leading to more job losses and a decline in economic opportunity. The high standards of the TPP would leave little room for protectionism and inefficient trade policies. In addition, concessions on tariff and non-tariff barriers would be daunting for Taiwan, given that joining the TPP would have implications for intellectual property, labor rights, investment, and the environment. 20 Why, then, would any Taiwan government accept those risks? The answer may be because the alternative is simply unacceptable to Taiwan’s regional position and global competitiveness. DPP chair Tsai Ing-wen has said there is an “urgent need” for Taiwan to be included in the TPP or at least in the next round of talks. 21 That statement suggests a willingness even on the part of the DPP to take a fresh look at policies that are uncompetitive and hence politically unsustainable. The TPP already has shaped expectations about regional investment and trade. Just as the North American Free Trade Agreement encouraged significant realignment of investment and production by global corporations prior to formalization of the deal, companies are already making choices about in which countries they will invest and locate production sites. There will be no prizes for those betting on Asian economies where the local polity or economic fundamentals disfavor TPP participation. Markets will be judged on whether they are connected to the best terms of trade and investment in the region. If Taiwan chooses not to participate, it may need to work for decades to regain the confidence of investors. Opposition from the Mainland A major challenge for Taiwan’s regional trade integration is opposition from the mainland. It is not clear whether China intends to join the TPP, which dims Taiwan’s prospects as well. As mentioned above, China’s de facto stance has been to approve of Taiwan signing FTAs with other parties only if China has FTAs with those same nations, as was the case with New Zealand and Singapore. The question also remains of whether a DPP administration would ever accept this dynamic; the previous DPP administration under Chen Shui-bian certainly would not have. Another condition is the name 20 Bush, “Taiwan and the Trans-Pacific Partnership: The Political Dimension.” 21 Shannon Tiezzi, “Cross-Strait Relations: The DPP’s Tightrope Walk,” Diplomat, June 5, 2015 u http://thediplomat.com/2015/06/cross-strait-relations-the-dpps-tightrope-walk. [ 76 ]
nealer and fimbres • taiwan and regional trade organizations that Taiwan would use in the agreement. In the case of WTO negotiations, China did not oppose the use of language recognizing “the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu.” One possible solution, then, is for Taipei and Beijing to join the TPP nearly simultaneously, as was done with WTO accession. Yet while this may be Taiwan’s only option (depending on China’s stance), it should not be Taiwan’s first choice. Both sides would need to implement significant reforms to be “TPP ready,” including in areas such as government procurement, which would likely take several years in the case of China. Because investment decisions are being made now based on expectations set by the TPP, investment will move before the deal is finalized and implemented. For Taiwan, the longer it is excluded from the TPP, the more significant the implications. Further complicating matters, other Asian nations may be reluctant to pursue economic ties with Taiwan at the risk of offending Beijing. Although the issue of political sovereignty (i.e., Taiwan’s status as a nonstate participant) has largely been addressed outside Taiwan, with most nations (including the United States) following a “one China” policy, gray areas still exist with regard to Taiwan’s economic space in the international arena. For example, the mainland did not block Taiwan from joining the WTO, the Asian Development Bank, or APEC. In particular, membership in APEC, which focused on economic and trade issues, is not based on sovereign political identity but on economic identity. 22 On the other hand, the Beijing-led Asian Infrastructure Investment Bank rejected Taiwan as a founding member in April 2015, despite Taiwan’s hope that APEC would serve as a model for its bid. Chinese officials stated that Taiwan may be able to join in the future under an “appropriate name.” 23 The issue of political sovereignty creates gray areas when it comes to Taiwan joining international agreements, and third parties often look to Beijing to set the tone. Should Taiwan decide to seek TPP membership, unanimous consent from all founding members is required, which leaves room for China to sway states against Taiwan’s participation if it so chooses. 22 Chen-shen J. Yen, “China and Taiwan’s Window of Opportunity at APEC,” Diplomat, September 30, 2014 u http://thediplomat.com/2014/09/china-and-taiwans-window-of-opportunity-at-apec. 23 William Kazer, “Taiwan’s Ma Ying-jeou Believes AIIB Rejection Due to ‘Political Considerations,’ ” Wall Street Journal, May 10, 2015 u http://www.wsj.com/articles/ taiwans-ma-ying-jeou-believes-aiib-rejection-due-to-political-considerations-1431293643. [ 77 ]
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asia policy number 21 • january 2
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is south korea in china’s orbit?
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2) To help bridge the policy and ac
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Part 2: Foreign-Language Sources Wh
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oundtable • non-claimant perspect
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