U.S.-Taiwan Trade Initiative Heralds the Beginning of Nightmare
By Du Tzen-hua
China Times, June 2, 2022
The launch of the U.S.-Taiwan Initiative on 21st-Century Trade by Taiwan and the United States, which Minister without Portfolio and chief negotiator John Deng called a 30-year wait, has been hailed by the media as a “major breakthrough” in U.S.-Taiwan relations. To be fair, this is a logical development for the globalization of Taiwan's foreign trade, and the so-called "major breakthrough" was really an overstatement; More conservatively speaking, it could be the beginning of a nightmare for Taiwan. Therefore, we must remain skittish about not being blindly trapped in the "great internal propaganda."
According to press reports, Taiwan and the United States have selected 11 agenda items for the first trade Initiative consultation held in Washington at the end of June. Trade facilitation, agriculture, anti-corruption, supporting small and medium enterprises in trade, harnessing the benefits of digital trade, promoting worker-centric trade, supporting the environment and climate action, state-owned enterprises, standards, regulatory practices and non-market policies and practices are on the agenda.
As a matter of fact, these agenda items are almost all of the issues that have been of great concern and interest to the United States in the free trade agreement (FTA) negotiations in recent years, and these also are issues that the United States would usually force its counterparts to raise their costs and reduce their trade competitiveness as well. On the contrary, the tariff elimination, which U.S. trade partners are expected to benefit more, is not on the agenda for the "U.S.-Taiwan trade initiatives" this time. From the American perspective, we would venture to say that Uncle Sam is not ready to negotiate for a U.S.-Taiwan FTA because of its domestic atmosphere. Moreover, it usually takes several years to finalize bilateral FTA negotiations. Against this background, we can pursue the block building approach, i.e., both sides first negotiate those non-tariff agenda items for U.S.-Taiwan trade initiatives consultation and implement the agreed items right after successful talks. When the domestic atmosphere in the United States changes and the American economy improves, both sides are in a position to swiftly switch over to a U.S.-Taiwan FTA negotiation for tariff elimination from trade initiatives consultation. There seems to have merit in this proposed modus vivendi if we seek to buy time and grasp the opportunity.
The current problem is that without touching on tariff elimination, at least half of the above agenda items on the table would be unfavorable to Taiwan. Judging from America’s tough stance in all kinds of talks, together with our mandarin’s mentality of "playing up to the powerful," we will only give in to the United States from A to Z. As a result, Taiwan's business sectors will have no choice but be ready to catch up with "international standards" overnight. Furthermore, if the United States is not ready to negotiate with us about tariff elimination, we will definitely have to do "losing" business in the long run. Is this what Taiwan wants?
Judging from a different perspective, the issues of concern to the United States are also of concern to the European Union (EU), so Taiwan’s consultation with the United States on the "trade initiative" will help pave the way forward for a FTA negotiation between Taiwan and the EU. However, Taiwan's exports to the EU and Japan are no less than those to the United States. If Taiwan signs an FTA with the EU and Japan respectively on fair and tariff-free basis, it will certainly be better off than finalization of the "trade initiative" with the United States, which has lack of the main course of globalization. The above-mentioned is a "love Taiwan" strategy that the government must right keep in mind. Since the EU and Japan are now "pro-Taiwan and anti-China," if Taiwan government fails to take advantage of the opportunity to negotiation with the EU and Japan about FTA, instead rush to conclude an U.S.-Taiwan "trade initiative" which is “not favorable to Taiwan,” it is exactly a "sellout," that should be condemned rather than praised.
Finally, Deng noted he has "waited 30 years" for this trade initiative. Boy! It has only been 20 years since Taiwan joined the World Trade Organization as a member in 2002. Deng said that he has waited for 30 years, which was really "ahead of schedule." What a perfectly suitable person he is for the country.
(The author is an adjunct distinguished professor at Huafan University.)
From: https://www.chinatimes.com/opinion/20220602004143-262104?chdtv