21 August 2019
Taiwan is the 12th largest trading partner of the United States, with bilateral trade at more than US$82 billion a year. Photo: Bloomberg
Taiwan is the 12th largest trading partner of the United States, with bilateral trade at more than US$82 billion a year. Photo: Bloomberg

How US support for Taiwan TPP entry can foster democracy

The ongoing pro-democracy protests in Hong Kong should remind the United States that its “pivot” or “rebalance” to Asia-Pacific is not limited to the expansion of military presence or trade opportunities.

An important component of the rebalance is to support and foster democratic ideals and virtues.

The US could take a significant step in proving its sincerity by supporting Taiwan’s bid to join the Trans-Pacific Partnership (TPP).

Taiwan is a thriving democracy and with a free-market economy, but it is hampered by limited international recognition and constantly antagonized by China, which views the island as a renegade province that will eventually be subsumed back into the motherland.

Taiwan President Ma Ying-jeou has repeatedly expressed his desire for Taiwan to join the TPP negotiations. While not publicly rebuffed, Ma’s pleas have essentially been ignored.

Now is the time to listen and respond. The Obama administration should respond to an increasingly belligerent China by rewarding democracy and good government.

Taiwan maintains a healthy economy and strong growth rate.

This is despite being virtually shut out of most bilateral and regional free trade agreements due to its limited diplomatic recognition – most countries long ago dropped Taiwan in favor of establishing diplomatic ties with China – and the fear of trading partners that an agreement with Taiwan would harm economic relations with China.

In short, economics are prioritized over principle and Taiwan is shunned.

Taiwan would greatly benefit from membership in the TPP.

It is dependent upon exports for continued growth. Half of Taiwan’s top 10 trading partners are in the TPP. It is estimated that TPP membership would boost Taiwanese exports by over 6 percent and increase GDP by nearly 4 percent. The cost of not being allowed to join is even higher.

Without the benefit of preferential market access to these important markets, Taiwan’s central position in the industrial supply chain is under threat.

Taiwan’s inclusion in the TPP would also benefit American exports.

Taiwan is the 12th largest trading partner of the US, with more than US$82 billion annually in total trade. A deal would benefit American exporters of machinery, automobiles and agriculture as well as greatly assist the service industry in breaking into a relatively closed market.

Beyond direct economic benefits, Taiwan’s inclusion in the TPP and other regional trade agreements would more securely cement the democratic island’s place at the heart of Asia-Pacific supply chains.

Doing so will improve security within the region. With Taiwan in the TPP, any Chinese attempt to destabilize Taiwan would unsettle China’s close trading partners and perhaps even trigger economic or political retaliation.

Simply stated, with increased trade ties comes greater economic costs of severing those ties through aggression.

Most importantly, in supporting Taiwan’s bid to join the TPP negotiations the US would send a strong signal regarding its active and continued support of democracy and good governance.

The State Department refers to support of democracy as a “central component” of American foreign policy and one of the “greatest legacies” of the 20th century.

But democracy does not seem to play any role in American trade policy, nor has it been at the center of the rebalance to Asia. The time is ripe to turn words into 21st century action.

China is confident. Its economic policies defy the international order yet it is unchallenged. Its behavior and treatment of its neighbors in the South China Sea is outrageous yet it goes unchallenged.

China is encroaching on the internal affairs of Hong Kong and attempting to curtail democracy in violation of the latter’s constitution.

It is time for the US to take a stand and challenge China. Supporting Taiwan’s bid to join the TPP would send a strong signal of its support for democracy and also put China on notice.

The writer is a professor of law in the Chinese University of Hong Kong

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The writer is Professor of Law at The Chinese University of Hong Kong.

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