Taiwan is targeting trade deals with more countries after making progress with three G7 economies last year, Taipei's trade czar said in an exclusive interview.
Last year was „a good year for Taiwan because we laid a solid foundation with the US, UK and Canada,” said John Deng, Taiwan's longtime cabinet member and currently minister and head of the trade office for negotiations. “The examples of these three will inspire other countries to follow suit. I hope other countries will overcome their reluctance and be open to trade deals and trade talks with us.
Deng sat down with Nikkei Asia weeks before Lai Ching-te, who was elected president on May 20 to replace two-term leader Tsai Ing-wen, continues to rule the pro-sovereignty Democratic Progressive Party. Lai's victory in the January election was seen as a repudiation of China's tougher approach to its neighbor, which has included relentless military incursions and economic and other forms of coercion.
The Communist Party government in Beijing claims Taiwan as its own territory, although it has never controlled it, and has not ruled out invasion. Its strategy has long been to isolate the democracy of 23.5 million people in the international community and pressure other countries not to engage with Taipei. But 2023 seemed to mark a turning point, as the Tsai administration was able to ink trade arrangements with three advanced economies.
„The trade agreements strengthen Taiwan's international legal status and support Taiwan's desire to be an active partner on the world stage,” Deng said. „Signing a trade agreement demonstrates Taiwan's ability to enter into an agreement with another country. For example, the agreement between the United States and Taiwan requires the approval of the US Congress and the Legislative Yuan, so its legal status is very firm.
„More trade agreements will strengthen Taiwan's security and contribute in a meaningful way to peace and stability across the Taiwan Strait, and are consistent with what many in the international community, including the G7, want,” he said.
While few countries officially recognize Taiwan, the island has become a semiconductor superpower, and many see it as a front line for Chinese expansion. Deng said Taiwan's importance in the global supply chain was only „appropriately recognized” after the disruptions of the Covid-19 pandemic.
Slowly but surely, Taipei has overcome Beijing's efforts to isolate itself and opened economic avenues with global partners.
Taiwan and the UK signed an Enhanced Trade Partnership Agreement in November, focusing on digital trade, investment, renewable energy and net zero emissions. After more than two years of negotiations, Taiwan signed a Foreign Investment Promotion and Protection Agreement with Canada in December.
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The agreements follow the Taiwan-US 21st Century Trade Initiative signed last June. The initial agreement covers customs administration and trade facilitation, good regulatory practices and other areas. Tsai — who negotiated Taiwan's admission to the World Trade Organization in 2002 — spent years working on trade developments, including an agreement with the United States, Deng said.
“Since his election in 2016, President Tsai has prioritized trade deals and gradually created the conditions for these negotiations. For example, the US has shown great goodwill towards Taiwan politically and militarily after it came into office, but a trade agreement is a different story,” Deng said.
„The Office of the US Trade Representative believed Taiwan was not ready, but Tsai expressed her political will to deepen cooperation with the US by voting to legalize US pork imports,” he said. He also had to deal with fierce domestic opposition from the Kuomintang against the pork move, and he tried to overturn his decision by referendum.
Deng also touted Sai's New South Policy and other efforts to build trade and investment ties with Southeast Asia. Our exports to Southeast Asia have reached 20 percent [of all exports],” he said. „In investment and trade, culture, education, medicine and beyond, Taiwan has achieved a win-win partnership with our Southeast Asian partners,” he said, referring to Thailand, Malaysia, Singapore and Indonesia.
As for next moves, Deng said Taiwan and the UK are looking at expanding digital trade, investment and energy ties. He pointed out that the Commonwealth of Nations, mostly former British colonies collectively evolved into a global association, „consisting of many member states”. Taiwan already has agreements with Singapore and New Zealand, and hopes to strengthen trade partnerships with Australia and India, he said.
“There is a foundation for India and Taiwan to move forward [with a trade deal],” he said. „Taiwanese investments will help India improve its manufacturing infrastructure. India competes with China as a global manufacturing hub, and this represents an opportunity for Taiwan to improve its business ties.
Having been in cabinet for more than a decade under the DPP and KMT-led governments, Deng has seen firsthand the evolution of Taiwan's global relations. He previously served as Vice Chairman of Taiwan's National Security Council from 2009 to 2014 and Minister of Economic Affairs from 2014 to 2016.
Like many Asian economies, Taiwan is closely watching the unpredictable politics on the other side of the Pacific, where US President Joe Biden is set to face re-election with his predecessor, Donald Trump.
Asked about the possibility of another Trump presidency after the November election, Deng said: „Taiwan's policy is to be friendly with everyone — Democratic or Republican.”
„No matter who is in power in the White House, Taiwan will try to continue our free and democratic way of life,” he said. „Democracy and freedom are America's core values. It's about how we prepare ourselves.” [for a Trump victory]Something we have to work hard for.
Deng said Trump's export control plans based on national security are „every country's right.” However, he stressed, „Taiwan hopes that globalization will continue and that we can maintain good relations with the US government.”
Additional reporting by Cheng Ding-Fang and Louli Li
A verZion This article was originally published by Nikkei Asia on April 17, 2024. ©2024 Nikkei Inc. All rights reserved.