During this year’s APEC summit in Honolulu, US President Barack Obama declared his support for a Trans-Pacific Partnership (TPP). Japan also announced that it would be entering TPP talks, hailing the formation of a major trans-Pacific free-trade zone. The combined GDP of the proposed TPP member states makes up 62 percent of that of APEC members, and 35.5 percent of global GDP. It promises to dominate the APEC in importance and influence.
The TPP started out in 2005 as a free-trade agreement with four signatories — Chile, New Zealand, Brunei and Singapore — with the US, Australia, Malaysia, Vietnam and Peru joining later. Japan’s entry takes the tally to 10 member states. The US started negotiations to join in 2009, and with its entry changed the TPP into a full-blown, premium trade pact covering trade in traditional agriculture, services, finance, investment, human resources and intellectual property rights, as well as environmental and labor issues.
The US’ interest in the TPP is part of its global strategy and its desire to counterbalance China’s growing economic influence in Asia, which includes the ASEAN-China trade deal that took effect in January last year and the proposed ASEAN Plus Three — which includes China, Japan and South Korea — and ASEAN Plus Six (China, Japan, South Korea, Australia, New Zealand and India).
China is attempting to economically integrate the Asian region, and is wary of the US’ presence in the TPP. With China’s membership of the ASEAN free-trade pact, coupled with the Comprehensive Economic Partnership Agreement, the competition between the US and China in regional economic integration is all too apparent. For strategic considerations, it is unlikely Beijing will seek to join negotiations to participate in the TPP in the short term, while it devotes itself instead to Asian economic integration. However, if the TPP flourishes, Beijing may well change tack and support the proposed Free Trade Area of the Asia-Pacific in an effort to dissipate US influence.
When Taiwan signed the Economic Cooperation Framework Agreement (ECFA) with China, President Ma Ying-jeou (馬英九) assured the public that this would prevent Taiwan being marginalized, and could help Taiwan sign trade deals with other countries. He even said it might help Taiwan get into discussions for the ASEAN Plus Three. However, these have turned out to be empty promises, much like Ma’s “6-3-3” policy has turned out to be a dud. Regardless of Taiwan’s having signed the ECFA, China still has us by the short and curlies, and is not giving us any room to sign FTAs or enter regional economic organizations.
As far as Taiwan is concerned, the US’ support of the TPP opens up significant possibilities, since the TPP would be larger than ASEAN. Despite China’s reluctance to join the TPP, we may be able to get in before them if we work hard enough. At the very least, Taiwan will be able to join at the same time as China, under the WTO model. China’s barriers to Taiwan’s entering ASEAN are pretty much impenetrable, but the same is not true in the case of the TPP. This new organization offers a new chance to throw off the chains shackling Taiwan to China.
Ma has already included entry into the TPP in his policy objectives for his “Golden Decade” campaign plank. Minister of Economic Affairs Shih Yen-shiang (施顏祥) has said that the government plans this to be completed within five to six years. However, this will mean a lot of work deregulating the nation’s farming, manufacturing and services industries. If Taiwan wants to join the TPP, we need to start preparing for it now.
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