Taiwan’s rationale for seeking to resume TIFA negotiations is somewhat different. Taiwan is seeking the political benefits of an agreement, more so than the economic ones, hoping to gain political status as a sovereign country.
For Taiwan, this status is more important than a bolstered economic status or competitiveness in the global economy.
Taiwan is preoccupied with the idea that the resumption of talks will be a stepping stone to signing an FTA with the US and entering the TPP.
The government hopes that an FTA with the US will be the foundation for deals with other major trading partners, and perhaps even speed up the procession of joining the TPP — all of which will increase Taiwan’s international status and profile.
Furthermore, from within the TPP, Taiwan could form economic strategic alliances with other countries, and this could prevent Taiwan’s geopolitical and regional economic marginalization.
As Taiwan is primarily focused on the formal significance and political implications of the talks, and does not really have any real intention to open up any particular market, the TIFA talks to date have been mostly concerned with the economic benefits to the US.
The US has all the cards in determining which issues are discussed. The result is that even after all these stops and starts, any agreement remains elusive.
Looking forward, if the government wants to use the TIFA mechanism to hasten a potential FTA and membership of the TPP, it needs to be more enlightened when it comes to making substantial changes to opening up to foreign markets.
The best approach would be substantial economic deregulation, further opening up of markets and increasing Taiwan’s overall competitiveness through economic restructuring.
Bert Lim is president of the World Economics Society.
Translated by Paul Cooper