Ahead of the upcoming U.S. presidential election, calls for the U.S. and Taiwan to initiate negotiations on a bilateral trade agreement continue to grow in the U.S. Congress and think tanks. Taiwan’s representative to the U.S., Amy Hsiao, said that a U.S.-Taiwan trade agreement would help spread overdependence on the Chinese market and ensure supply chain security. Analysts say that Taiwan’s supply chain strength has global relevance and that if Taiwan falls into China’s orbit, the consequences would be unimaginable.
Although 161 U.S. Representatives and 50 U.S. Senators from across party lines have issued a letter calling on U.S. Trade Representative Lighthizer to initiate discussions with Taiwan on a trade agreement, the New York Times recently reported that Lighthizer is under pressure to return to Congress because he does not want to anger Beijing into interfering with the U.S.-China trade agreement.
Ahead of the U.S. presidential election next week, the Brookings Institution on Tuesday (Oct. 27) released a list of “feasible policy recommendations” for the next U.S. administration on foreign policy, including a proposal to deepen trade relations with Taiwan.
Richard Bush, a visiting senior fellow for East Asian policy at the think tank and former president of the American Institute in Taiwan, said the next U.S. administration “should immediately begin exploratory discussions with Taiwan on negotiating a bilateral trade agreement or, as an alternative, it should begin a series of negotiations with Taiwan on trade and investment agreements that, cumulatively, will lead to a deepening of trade relations with Taiwan. has the functional equivalent of a bilateral trade agreement.”
On the same day, during a video discussion on the future of U.S.-Taiwan economic and trade relations in George Washington, Taiwan’s representative to the U.S., Hsiao Mei-chin, said that deepening U.S.-Taiwan economic and trade relations is a bipartisan consensus, and that Taiwan, as a democracy with the United States, is ready to work with the United States to advance mutual cooperation, regardless of which political party is in power.
Due to current geopolitical competition and tensions, the issue of supply chain security is also receiving heightened attention to ensure that supply chains for critical technologies flow only among “reliable and trusted partners,” said Hsiao.
She also pointed out that Taiwan’s over-reliance on the Chinese market over the past years has put Taiwan’s economy and security at great risk, and that current political and economic trends have made many multinational companies pay attention to other market opportunities.
She expressed her appreciation for the 161 members of the House of Representatives and 50 members of the Senate who issued a cross-party letter in support of a trade agreement with Taiwan, saying, “As a fellow democracy, we are always ready to work with any political party in power,” and looked forward to continued improvement on the issues touched upon in the meeting, including supply chain security.
Rupert Hammond Chambers, chairman of the American-Taiwan Business Association, also emphasized the issue of supply chain security. He said that Taiwan’s TSMC is an important global chip supplier and a major player in cell phones, computers, automobiles and other products around the world. With the growing threat from China to Taiwan, it would be unimaginable if China were to take control of Taiwan and put Taiwan’s technology in China’s orbit.
“An important question that I hope you will be able to ask today or at some point in the future is, as we consider the semiconductor industry in the shadow of the Chinese threat to Taiwan, can we afford to see Taiwan’s technology fall into China’s orbit? Can we accept the possibility that if China forces an attack on Taiwan, in which case we can accept that Taiwan’s technology and its ability to produce it falls into China’s orbit?”
Taiwan is now in the Western orbit and its technology is protected by the same intellectual property rights, trade secrets, and other related laws as the United States, Europe, and other Western democracies, while China competes globally based on its highly questionable theft of intellectual property rights and trade secrets in the past, said Han.
Kurt Tong, former U.S. Consul General in Hong Kong and Macau, also drew on his experience in charge of trade and economic affairs in the U.S. government to say that, from a geo-economic and strategic interest perspective, it “makes sense” for the U.S. and Taiwan to negotiate a bilateral trade agreement, especially given the impact of the epidemic, the increased understanding of the importance of supply chain security, and the benefits of more open markets and economic integration for the U.S., Taiwan, and the region as a whole.
Tang added that although China is a “reluctant opener” and many of its actions are strategic, economic concerns and challenges for the U.S., that does not mean the U.S. should ignore it; rather, the U.S. should work with China to improve the situation, such as in the case of the U.S.-Taiwan bilateral trade agreement, and should redouble its efforts to work with China to improve their relationship.
In response to China’s recent increasing military threat to Taiwan, the U.S. government announced two more arms sales to Taiwan in less than a week, which drew strong reactions from the Chinese government and indicated that it would sanction U.S. arms vendors. How do you manage to avoid accidents?
But the PRC’s rhetoric over the past few years has been very worrisome, and its behavior during the Taiwan election was “grossly inappropriate” and both provocative and inflammatory, Tang said, adding that the U.S. response was to confirm its commitment under the Taiwan Relations Act to discuss with Taiwan its self-defense needs in order to maintain a peaceful status quo in the Taiwan Strait, which led to the recent arms sale announcement.
Regarding the possibility of conflict in the Taiwan Strait, Tang said that this is an unpredictable situation, but that the situation in the Taiwan Strait is indeed grave and that the United States, Taiwan, and China all have a responsibility to keep the peace there.
If Trump is re-elected, he will need to focus on restoring the U.S. economy and will face some pressure to improve relations with China; if Biden is elected, he will reduce tensions with China in response to voters’ demands on climate change, so he expects to see a reduction in U.S.-China tensions, and by extension, a cooling of the situation in the Taiwan Strait.
However, regardless of which political party is in power, Han said he hopes that the U.S. government will not let up on its efforts to strengthen Taiwan’s deterrent capabilities just because the situation in the Taiwan Strait has eased, as it did with the two recent arms sales.
As for the Chinese Foreign Ministry’s indication that it would sanction U.S. defense manufacturers that sell arms to Taiwan, Han said in response to another question about China’s possible reaction to a U.S.-Taiwan trade agreement that Taiwan is a member of the World Trade Organization and that the U.S. and Taiwan have every reason to enter into a bilateral trade agreement, China’s leverage is actually “quite limited,” as is its stated intention to retaliate against U.S. defense manufacturers that do not do much business in China.
Chinese Foreign Ministry spokesman Zhao Lijian told a press conference on Monday that the U.S. arms sales to Taiwan “seriously violate” the one-China principle and the three U.S.-China joint communiques, which China firmly opposes and strongly condemns.
He said China has decided to take the necessary measures to “impose sanctions on U.S. companies such as Lockheed Martin, Boeing Defense, Raytheon and other U.S. companies involved in the arms sale to Taiwan, as well as relevant U.S. individuals and entities that played a bad role in the arms sale to Taiwan.
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