The TPP’s demise helps China trump Taiwan

If new United States President Donald Trump really intends to revise Washington’s approach to cross-strait relations, questioning Beijing’s “one-China” policy and developing official level ties with Taiwan to strengthen the island nation’s role in East Asia, his decision to abandon – and ultimately kill – the Trans-Pacific Partnership (TPP) on free trade moves rather in the opposite direction.

In the absence of valid alternatives, in fact, the US withdrawal from the TPP will negatively affect Taipei’s foreign policy even more than its economy.

The economic pillar of former US President Barack Obama’s pivot/rebalance to Asia, the TPP was signed by America and other 11 Pacific Rim nations in February 2016. Basically, it was a geopolitical project that had less to do with trade than with enhancing the US system of alliances and partnerships in the Pacific against China’s potential emerging as the dominant actor in the region.

Risks of marginalization

With the TPP’s demise, and China’s leadership in fostering Asia-Pacific economic integration, Taiwan is now at risk of regional marginalization. Through both the Free Trade Area of the Asia-Pacific and the Regional Comprehensive Economic Partnership, two proposed multilateral commercial deals that Beijing has so far championed as alternatives to the TPP, the Chinese giant can indeed curb further the Taiwanese diplomatic projection in the Western Pacific.

Cross-strait relations are currently at a boiling point, as China’s distrust of Taiwanese President Tsai Ing-wen, leader of the independence-leaning Democratic Progressive Party, is palpable. Beijing condemns Tsai’s refusal to agree to the 1992 Consensus between the Chinese government and the Kuomintang (KMT) on the One China policy – the principle that Taiwan is a part of China. The Chinese leadership sees Taipei as a breakaway province and does not recognize its de facto statehood, which dates back to 1949, when the KMT lost the Chinese civil war to the communists and escaped to the island.

Taipei’s diplomacy is already under pressure. China is in fact pushing to reduce its web of formal diplomatic ties and block its participation in international organizations and forums. Burkina Faso’s Foreign Minister Alpha Barry recently unveiled that China had offered his country “US$50 billion or even more” to switch diplomatic recognition from Taiwan to the mainland – the Western African nation is one of Taipei’s remaining 21 diplomatic allies.

Expanding Taiwan’s international space

While Chinese President Xi Jinping is keen to narrow both the diplomatic potential of Tsai’s government and any manifest expression of Taiwan’s independence, the Taiwanese president differently aims to expand the island nation’s international space.

Taipei has often voiced its interest in joining or at least being connected in some fashion to the TPP trade bloc; a direct link to the Obama-sponsored trade agreement would have provided a new dimension to Taiwan’s foreign policy, as well as a path to diversify its commercial relationships away from China.

It is doubtful that Taipei can reach this goal only through its “New Southbound Policy”, intended to ramp up trade and economic interactions in Southeast Asia, South Asia and Oceania. The same goes for Taiwan’s possible connection to a “TPP 12 Minus One” scheme, an attempt by Australia and New Zealand to promote a new multilateral trade agreement that would include all TPP signatories but the US, also embarking other countries bordering the Pacific.

Missed opportunity

“The Donald” may have missed the point with the TPP’s sinking. Taiwan’s accession to a trade grouping like the original TPP would in fact be a more subtle and less confrontational way to expand the island nation’s strategic standing in East Asia than Trump’s threat or move to rescind from Beijing’s one-China policy, which Washington embraced in 1979, when it cut formal diplomatic ties with Taipei in favor of Communist China.

In the Obama administration’s plans, the TPP was to be a system building platform. Hence, having an evident geopolitical significance, it cannot be replaced by single bilateral trade agreements. In this sense, the signing of a simple commercial deal with Washington would have a diminished impact on the self-ruled island’s foreign policy, unless it is matched by an Asia-Pacific-wide strategic initiative involving the US.