The talks over expanding the number of members in the proposed Trans-Pacific Strategic Economic Partnership Agreement (TPP), which is directed by the US, made major progress at the recent annual APEC meeting in Hawaii. Not only did Japan, Canada and Mexico enter the talks, the original nine negotiating states also proposed a basic framework for the TPP that would set the tone for future norms on market liberalization and modes of negotiation.
However, because of its special international status and the “Beijing factor,” Taiwan has been left out of the current trend of countries signing bilateral free-trade agreements (FTAs). The signing of the Economic Cooperation Framework Agreement (ECFA) between Taiwan and China last year does not seem to have resulted in any major breakthroughs in this marginalization problem. At present, Taiwan has not signed any FTAs with its important trading partners and, therefore, naturally holds high hopes for TPP membership.
The TPP was originally established as a free-trade area involving Singapore, New Zealand, Chile and Brunei known as the Pacific-4 trade bloc. After the US began attempts to join it in 2008, the partnership agreement’s importance increased significantly. Australia, Peru, Vietnam and Malaysia have now also joined the negotiating table. At present the nine countries negotiating to join the trade agreement account for 26 percent of the world’s GDP and 17 percent of global trade volume. If Japan were added to the TPP, it would increase its percentage of global GDP to 35 percent, making it the largest free-trade zone in the world.
However, Japan’s entrance to the TPP would really only be significant in a geo-economical sense. If we think about other nations that could also join, like South Korea and the Philippines, the future scale and power of the TPP could even be enough to gradually deconstruct the Sino-centric regionalism prevalent among ASEAN countries and help the US use an Asia-Pacific framework to realize its major strategy in recent years: returning to Asia.
Not only is China the most important trading partner of the East Asian nations, it also overtook Japan last year to become Asia’s largest economy and its influence in the region is increasing day by day. The ASEAN-China Free Trade Area came into effect during the first half of last year and lately it has been said that China, Japan and South Korea are set to start talks with ASEAN about a possible “ASEAN Plus Three” next year.
The trend toward regionalism among ASEAN nations has weakened the US’ economic and political interests in the Pacific. The global financial crisis that raged through 2008 and 2009 also resulted in decreased US economic power and an increase in China’s economic power. The need for the US to use regionalism as a way of forging economic and trade links is more urgent than at any time in the past. Also, if the US’ economic growth stays sluggish for long, it is bound to have an increasingly difficult time upholding its global dominance and it could even become meaningless. Reciprocal TPP negotiations and deregulation must look very inviting for the US at this time, when it desperately needs to create new markets overseas and employment opportunities back home.
As the number of potential members grow, the formation of a TPP that includes the US will become difficult. However, as I have shown above, US ambitions to control the TPP cannot be ignored. What currently seems the most feasible way of establishing a TPP will be what the US is now calling for and what APEC has advocated — a free-trade area of the Asia-Pacific (FTAAP) with 21 member states.
What we must realize is that despite the close links and their shared membership, the TPP is not part of the formal APEC system. While the TPP clearly states that it welcomes APEC members to join the agreement — the result of an open accession clause — this does not mean APEC members like Taiwan or “Chinese Taipei” can automatically become TPP members. This is obvious from what has transpired in the past few years, when Taiwan’s attempts to gain acceptance into the partnership agreement have been ignored each time.
The only way Taiwan would have a chance of taking part in such agreements would be via an FTAAP organized under an APEC framework and which would be the result of a partnership agreement or some other similar measure.
Formation of the TPP is very far off and even if Taiwan is eventually able to join, it would be of no help in solving the thorny issues Taiwan faces.
For example, Taiwan’s major trade competitor is South Korea, which has already signed FTAs with ASEAN, the EU and the US. In regions where FTAs have been signed, 35.6 percent of South Korea’s exports now enjoy tariff reductions and if we add to this list the agreements being negotiated and that are expected to be concluded within the next two years, this figure will reach more than 60 percent.
While many electronic goods are exempt from tariffs because of information-technology agreements, Taiwan’s many traditional industries, in particular petroleum and textile products with low levels of differentiation, will be affected by South Korea’s FTAs because of their limited price flexibility.
Honigmann Hong is an assistant professor in National Tsing Hua University’s China studies program.
Translated by Drew Cameron
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
The military is conducting its annual Han Kuang exercises in phases. The minister of national defense recently said that this year’s scenarios would simulate defending the nation against possible actions the Chinese People’s Liberation Army (PLA) might take in an invasion of Taiwan, making the threat of a speculated Chinese invasion in 2027 a heated agenda item again. That year, also referred to as the “Davidson window,” is named after then-US Indo-Pacific Command Admiral Philip Davidson, who in 2021 warned that Chinese President Xi Jinping (習近平) had instructed the PLA to be ready to invade Taiwan by 2027. Xi in 2017
If you had a vision of the future where China did not dominate the global car industry, you can kiss those dreams goodbye. That is because US President Donald Trump’s promised 25 percent tariff on auto imports takes an ax to the only bits of the emerging electric vehicle (EV) supply chain that are not already dominated by Beijing. The biggest losers when the levies take effect this week would be Japan and South Korea. They account for one-third of the cars imported into the US, and as much as two-thirds of those imported from outside North America. (Mexico and Canada, while
RSS