Taiwan in the TPP: how to break the cross-strait status quo

Despite all the fuss about the US government’s approval of a US$1.4 billion arms sale to Taiwan, Japan’s recent overture to Taipei’s participation in a reformed Trans-Pacific Partnership (TPP) on free trade and investment looks like a more realistic threat to the status quo across the strait between the island and mainland China.

The new weapons transfer to Taipei has sent Beijing into a rage, but in no way does it modify the cross-strait military balance, which still favors Communist China in the absence of direct support of the self-ruled island from Washington.

Taiwan’s involvement in the TPP, in contrast, would weaken Beijing’s strategy to isolate its cross-strait nemesis diplomatically. The Chinese government considers Taipei a rebel province and has not ruled out taking it back by force if needed.

Japan’s role

On June 26, Japanese Chief Cabinet Secretary Yoshihide Suga opened the possibility that “various countries and areas, including Taiwan” could join the TPP.

The TPP brings together 11 Pacific countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam). Abandoned by the United States under President Donald Trump, however, its survival is at risk, at least in its current form.

Japan and New Zealand are the only countries to have already ratified the TPP. Now Tokyo has become the standard-bearer of a revised version of the trade agreement, which needs a new legal framework to come into force after the US withdrawal. In this regard, talks among TPP founding partners are under way, and the first results are expected at the Asia-Pacific Economic Cooperation (Apec) summit in Vietnam later this year.

Taiwanese President Tsai Ing-wen has thanked via Twitter the Japanese government for backing Taipei’s inclusion in the TPP. Just a few days before Suga’s statement, Taiwanese Premier Lin Chuan had reaffirmed the island’s interest in joining the trade pact in an interview with the Japanese newspaper Nikkei Shimbun. As commerce is the main asset of the island’s economy, Lin said the Taiwanese government was committed to fostering trade ties with TPP countries, the US and the European Union.

The TPP remains quite attractive to Taiwan even without the US presence. The TPP bloc accounted roughly for one-fourth of Taipei’s total foreign trade in 2016, with Japan, Singapore, Malaysia and Vietnam taking the lion’s share, according to the Taiwanese Bureau of Foreign Trade. The opposite is also true, as Taiwan could be an important addition to the multilateral scheme, given that TPP members’ exports to Taiwan were worth about $68 billion last year.

Geopolitical consequences

But the economic fallouts of Taiwan’s membership in the TPP are nothing compared with the possible geopolitical consequences. Inclusion in the trade pact would allow Taipei to break the Chinese diplomatic siege, proving that Beijing’s current attempts to undermine the island’s de facto statehood through the disruption of its web of formal ties are doomed to fail.

Since Tsai took office last year, Beijing has started to wrest official diplomatic allies from Taiwan and boycott its participation in international organizations and forums. After Panama’s decision to shift diplomatic recognition to Beijing last month, Taipei has maintained formal state-to-state relationships with only 20 countries, in large part in Oceania, Latin America and the Caribbean.

The Chinese government is punishing Tsai – leader of the independence-leaning Democratic Progressive Party – for her refusal to stick to the 1992 Consensus between the Kuomintang and the Chinese government on the One China policy, the principle that Taiwan is a part of China.

Apart from cross-strait dynamics, Taiwan’s accession to the TPP would also send a clear signal that countries such as Japan, Australia, Singapore and Vietnam are not willing to accept a Pacific region dominated by China.

Thus the resurrection of the TPP, with the relevant inclusion of Taiwan, would amount to a non-military, low-intensity operation to challenge Chinese regional assertiveness. All this would be to former US president Barack Obama’s satisfaction. For Trump’s predecessor, the TPP was to be the economic bedrock of Washington’s pivot/rebalance to Asia, that is, the strengthening of the US system of relations in East Asia to tackle China’s rise as the leading power in the region.

The question is whether all of the original TPP signatories are ready to move forward with the project without the US and along with a “troublesome” partner like Taiwan. Beijing has often demonstrated that it has the means and arguments to influence the choices of its neighbors. In this sense, its plans for Asia-Pacific economic integration (the Free Trade Area of the Asia-Pacific and the Regional Comprehensive Economic Partnership) evidently have the potential to lure Pacific nations against competing schemes like the “TPP minus one”.