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Taiwan Should Focus on U.S. Trade Matters Before TPP, Envoy Says

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American Institute in Taiwan Director Christopher Marut
American Institute in Taiwan Director Christopher Marut. Source: American Institute in Taiwan

April 11 (Bloomberg) -- Taiwan should use trade talks with the U.S. to prove its commitment to economic reforms needed for entry to the broader Trans-Pacific Partnership before seeking to join that pact, said the U.S.’s unofficial envoy to the island.

“Taiwan is still exploring whether it’s prepared to make the economic reforms that the TPP will require,” Christopher Marut, Director of the American Institute in Taiwan, said in an interview April 9 in Taipei.

Momentum for progress on U.S. trade issues, from intellectual property protection to pork exports, is “certainly still there,” said Marut. The AIT helps facilitate bilateral ties in the absence of a formal diplomatic relationship.

President Ma Ying-jeou, addressing a forum in New York and Washington via video conference on April 9, called for U.S. support to join the TPP, a trade alliance that would link the world’s biggest economy with that of 11 other nations around the Pacific. Ma said diversifying trade partners beyond China, which buys about 40 percent of Taiwan’s exports, would be in the interest of the U.S.

The U.S. is seeking to wrap up a TPP agreement with the current parties to the talks, and has signaled that other countries should look to join at a later stage, rather than risk delaying the pact. Premier Li Keqiang said yesterday that China might seek to join the TPP negotiations, while South Korea has also flagged interest.

China Trade

Ma, Taiwan’s third democratically-elected president, has deepened economic ties with China since taking office in 2008, ushering in direct flights and yuan banking as well as the Economic Cooperation Framework Agreement in 2010. Taiwan’s trade with China currently dwarfs the $63 billion bilateral commerce with the U.S. registered in 2013, according to Marut.

Opposition to Ma’s push for closer relations with China has been rising, and an agreement with the mainland to open the island’s service industry to more competition sparked a three-week student occupation of the legislature. Hundreds of thousands of people rallied in Taipei against the accord on March 30.

Though the U.S. supports closer cross-strait ties, “the pace and scope of those agreements should be decided without coercion and be acceptable to people on both sides of the strait,” Marut said.

The 35th anniversary of the Taiwan Relations Act was marked in Washington with the House or Representatives voting to reaffirm the legislation and approving the sale of four second-hand U.S. Navy Perry-class guided missile frigates to Taiwan. China’s Defense Minister Chang Wanquan called the warships move “extremely destructive.” China still claims Taiwan as its territory, more than six decades after Kuomintang forces fled to Taiwan during a civil war.

Firm, Long-Standing

The Taiwan Relations Act was signed into law by then-President Jimmy Carter in April 1979 after the U.S. terminated diplomatic ties with the Republic of China government in Taipei and instead recognized the administration in Beijing.

“Our commitments and assurances to Taiwan are firm and long-standing,” Marut said, adding the relationship is based on shared values such as democracy and rule of law.

At the same time as China seeks closer economic ties with Taiwan, it has become more aggressive in asserting territorial claims across the East and South China seas. The Pentagon estimates about 1,200 Chinese missiles are aimed at Taiwan, according to a U.S. Defense Intelligence Agency report in February.

‘Strategic Value’

“It is U.S. policy to consider any effort to determine the future of Taiwan by other than peaceful means, including by boycotts or embargoes, a threat to peace and security in the Western Pacific area and of grave concern to the United States,” Marut said.

The U.S. continues to supply arms to Taiwan, including the used warships and a $3.7 billion upgrade of F-16 fighter jets, and is the island’s largest export market after China, accounting for about 11 percent of shipments in March.

“Taiwan is a link in the U.S. rebalance to Asia,” Tai Wan-chin, dean at Tamkang University’s College of International Studies, said by phone in Taipei. “The island has its security and strategic value.”

To contact the reporters on this story: Debra Mao in Taipei at dmao5@bloomberg.net; Yu-Huay Sun in Taipei at ysun7@bloomberg.net

To contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net Andrew Davis

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