TAIPEI, Taiwan — President Joe Biden’s fear of political backlash against trade agreements such as the Trans-Pacific Partnership undercuts his strategy to counter China and support Taiwan, according to Taiwanese analysts and policymakers.
“It undermines U.S. credibility as a leader in the economic order it is actually trying to recreate in this region,” said Roy Chun Lee, a senior world trade expert at the Chung-Hua Institution for Economic Research, a Taiwanese government think tank. “It might be a good idea for the Biden administration to, later, reconsider his position. It would address his own problem and also address our problem as well.”
Biden has made economic concerns a centerpiece of the U.S. effort to organize an “alliance of democracies” to counter threats from China, an effort galvanized in part by Beijing’s leverage over key supply chains and the regime’s use of economic sanctions to punish countries that take political positions it opposes. Yet Biden has stopped short of returning to the Trans-Pacific Partnership, which former President Donald Trump exited following a presidential campaign that featured intense opposition to such deals from both parties.
“The Trump administration decided to drop out from this TPP initiative, and that sent a signal to the countries in the region that the U.S. is leaving [the] Indo-Pacific,” Dr. Lo Chih-cheng, the Taiwanese legislature’s Foreign and National Defense Committee chairman, told the Washington Examiner on Monday during an interview in his office. “It’s a wrong signal to the countries in the region that the U.S. is giving its leadership, economic leadership, to Japan or even to China.”
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Japan, filling the diplomatic role left by the U.S., persuaded the remaining members of the pact to stick with the plan. They signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a revised version of the original agreement that suspended some of the provisions most important to the U.S. while leaving the door open to an eventual American return. U.S. and Japanese officials have coordinated a major initiative to protect the high-tech semiconductor supply chain from Beijing, but even Japanese officials who regard that effort as an “epoch-making” initiative pine for the U.S. to return to the pact.
“Now with the U.S. gone, China is applying for the CPTPP, and the question is how we go about trying to realize the strategic vision of the TPP,” Japanese Ambassador to the U.S. Koji Tomita told Bloomberg last month. “And there’s no quick answer because we recognize the political constraints you have in terms of coming back to the TPP.”
China and Taiwan have submitted separate applications to join the grouping, but Taiwanese officials argue that China would cheat the various requirements imposed under the deal. They hope that membership in the bloc would render them less vulnerable to pressure from Beijing.
“We need to reduce our dependency on China because China is not a normal trade partner,” Lo said. “China can use [economic ties] as a way to increase its political influence over Taiwan.”
Taiwanese authorities are trying to demonstrate that they qualify for admission to the trade deal, but their bid has been undercut by political pressure from Beijing. Chinese Communist Party officials claim sovereignty over Taiwan, which they have never ruled, and argue that Taiwan’s acceptance into a regional trade deal would violate their position that “Taiwan cannot be separated from China.”
Taiwan is the last refuge of the government overthrown in the Chinese Communist Revolution, so Taiwanese President Tsai Ing-wen takes care to maintain that Taiwan is an independent country without asserting that independence in terms that would provoke a Chinese invasion.
The communist regime hopes to bring Taipei under its control through economic or political means, but Chinese officials reserve the right to military force against the island democracy. Yet Japanese officials support the Taiwanese application, even though they do not have official diplomatic relations with Taipei, and Taiwanese officials hope that the other members of the pact will find safety in numbers despite their anxiety about angering Beijing.
“It’s a good alternative because when we talk about bilateral trade agreements, there’s some political sensitivities,” Taiwanese Vice Foreign Minister Alexander Yui told reporters last week. “But when you reach an agreement between eight, 12, 13 countries with Taiwan, you share the sensitivities with other countries, so actually, it’s a very good alternative to signing these bilateral trade agreements.”
Yui and Lee, the trade expert, addressed a group of reporters invited by the Taiwanese government for a round of meetings designed to amplify Taipei’s case for membership in CPTPP. Taiwanese officials want the trade bloc members to disregard China’s protests when considering their application, a task made more difficult when they cannot “share the sensitivities” with the U.S.
“The U.S. is not a member of CPTPP, so it’s very difficult for the U.S. to advocate Taiwan’s accession to that kind of regional economic framework,” said Lo, the Taiwanese lawmaker.
Biden has set a goal of proving that “the United States is deeply invested in the Indo-Pacific,” but his administration’s efforts have been constrained by an apparent desire to avoid exposing him to attacks of the sort that Trump launched against “Obamatrade” in 2016. Secretary of State Antony Blinken began his tenure as the nation’s top diplomat with a mea culpa for past failures in trade talks.
“We didn’t do enough to understand who would be negatively affected and what would be needed to adequately offset their pain or to enforce agreements that were already on the books and help more workers and small businesses fully benefit from them,” Blinken said in his first major speech last year. “Our approach now will be different.”
That difference was on display in May, when Biden traveled to Tokyo to launch the Indo-Pacific Economic Framework for Prosperity. This 13-economy format was organized pursuant to Biden’s statement that “the future of the 21st century economy is going to be largely written in the Indo-Pacific — in our region.” And yet, neither that “framework” nor a parallel dialogue launched between the U.S. and Taiwan contains any measures that would lower tariffs or take similar steps to lower barriers to trade between countries — an American choice perceived in Taiwan as a case of Biden’s political needs trumping his strategic priorities.
“It is a reflection of the fact that the Congress and the industry in the United States, at this moment, they don’t like the idea of free trade agreements,” Lee told the Washington Examiner. “They believe market access [trade agreements] is one of the reasons why there is a kind of hollowing out of [the] manufacturing sector of the U.S. So they would like to bring back the manufacturing, rather than push them [to go] offshore, and so they don’t like the idea.”
Lo regards such deference to “domestic concerns” as a myopic failure to persuade voters that a trade deal helps them.
“In order to open up a market, there are costs, but there are also benefits,” he said. “You got to tell the people that [there may be] short-term costs, but there will be long-term gains. The problem is, in the short term you have to face reelection and elections, so it’s very difficult for leaders everywhere — not just in the U.S.”
Lee believes that Biden will be more willing to negotiate trade deals in a second term if he holds on to the presidency in the 2024 elections.
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“Of course, it’s a dynamic process,” he said. “At this juncture, the support is very limited for the market access point. So we have to be patient.”
In time, Lo suggested, IPEF could evolve into a new kind of trans-pacific partnership — if Biden were to seek a proper trade agreement. “But they don’t use the term ‘TPP,’” he said. “So we don’t know yet what IPEF really means.”
