Despite constant pressure from China to erode Taiwan’s international standing, the US has always seen the value of furthering its ties with Taiwan, a small but vibrant democracy in Asia.
In 1946, the US and Republic of China signed the Taiwan Treaty of Friendship, Commerce and Navigation to formalize cooperation between the two. And in more recent years, relations between the two have deepened substantially. In October 2012, Taiwan was included in the US’ visa waiver program, which allows Taiwanese passport holders to remain in the US for up to 90 days without a visa.
To date, only 38 countries enjoy this privilege, most of which are developed nations and longtime partners of the US. Then, last year, the White House decided to support Taiwan’s joining of the International Civil Aviation Organization, and the decision was backed by the US Congress.
On the economic front, according to the Office of the US Trade Representative, Taiwan is currently the US’ 12th-largest trading partner. Last year, two-way trade between them was valued at about US$64 billion in total.
These are reliable indicators that the US-Taiwan relationship is warming, right?
However, on Aug. 8, the US District Court for the Eastern District of Pennsylvania quietly handed down a judgement that rode roughshod over the US government’s policy on Taiwan and any goodwill from the friendship-building activities above.
In a judgement seemingly worded to provoke, the district court refused to recognize an arbitral decision made by a Taiwanese arbitration association because Taiwan did not sign an international convention on recognition of arbitral awards.
This rationale runs directly counter to the US Supreme Court’s call to end “the longstanding judicial hostility to arbitration agreements.”
Furthermore, the convention cited by the district court, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, was conceived to promote arbitration around the world; its spirit is inclusive, not exclusive.
And whatever happened to the Treaty of Friendship, Commerce and Navigation? It, according to several US federal district court precedents, should be a valid basis for the US to recognize Taiwanese arbitral awards.
There are altogether 50 territories, including Taiwan, that have not yet signed the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. If US courts refuse to recognize arbitral awards from those countries, the consequences might be that US arbitral awards would be denied in kind. This kind of tit-for-tat would put international commerce on a slippery slope.
Foreign companies, especially those from nations that have not signed the convention, might be chilled by the US’ attitude toward arbitration. Likewise, US companies, concerned about their rights in an international commercial dispute, would be wary of doing business abroad.
What the federal district court has done in one single stroke is marginalize one of the most dynamic democracies in Asia. Taiwan could not sign the convention because it was not a member of the UN.
To this day, Taiwan is still not a UN member, and that is because of China’s intervention, not because it has chosen to remain aloof. Furthermore, Taiwan, as a responsible member of the international community, understands arbitration is a more expeditious alternative to litigation, and has revised its Arbitration Act to include the same criteria for recognizing foreign arbitral awards as in the convention at issue.
Its embrace of international comity should be applauded, not disparaged. To imply that an arbitration award from Taiwan cannot be enforced in the US owing to non-UN membership is equivalent to shutting Taiwan out of the international community. The court’s practice of exclusion is damaging to the reputation of Taiwanese arbitration, detrimental to US-Taiwan relations and, above all, unfair.
Thanks to the judgement, arbitration in Taiwan is now a joke worldwide. Parties that previously found the professionalism and efficiency of Taiwanese arbitration appealing would likely take their dispute elsewhere now.
The court’s diminishment of Taiwan has already stirred strong reaction in the nation. Many indignant Taiwanese have taken to the blogosphere to vent their feelings. There are also voices in the US online community questioning the soundness of the court’s judgement.
Taiwan is a staunch ally of the US in the Pacific, but the recent federal district court judgement has served a smart slap in the face of Taiwan and is trying its loyalty.
Chien-Fei Li is a recent Harvard Law graduate and Soochow University School of Law adjunct lecturer. Wei-Jen Chen is a recent Harvard Law graduate and an SJD student at the National Taiwan University School of Law.
A series of strong earthquakes in Hualien County not only caused severe damage in Taiwan, but also revealed that China’s power has permeated everywhere. A Taiwanese woman posted on the Internet that she found clips of the earthquake — which were recorded by the security camera in her home — on the Chinese social media platform Xiaohongshu. It is spine-chilling that the problem might be because the security camera was manufactured in China. China has widely collected information, infringed upon public privacy and raised information security threats through various social media platforms, as well as telecommunication and security equipment. Several former TikTok employees revealed
Two sets of economic data released last week by the Directorate-General of Budget, Accounting and Statistics (DGBAS) have drawn mixed reactions from the public: One on the nation’s economic performance in the first quarter of the year and the other on Taiwan’s household wealth distribution in 2021. GDP growth for the first quarter was faster than expected, at 6.51 percent year-on-year, an acceleration from the previous quarter’s 4.93 percent and higher than the agency’s February estimate of 5.92 percent. It was also the highest growth since the second quarter of 2021, when the economy expanded 8.07 percent, DGBAS data showed. The growth
At the same time as more than 30 military aircraft were detected near Taiwan — one of the highest daily incursions this year — with some flying as close as 37 nautical miles (69kms) from the northern city of Keelung, China announced a limited and selected relaxation of restrictions on Taiwanese agricultural exports and tourism, upon receiving a Chinese Nationalist Party (KMT) delegation led by KMT legislative caucus whip Fu Kun-chi (傅崑萁). This demonstrates the two-faced gimmick of China’s “united front” strategy. Despite the strongest earthquake to hit the nation in 25 years striking Hualien on April 3, which caused
In the 2022 book Danger Zone: The Coming Conflict with China, academics Hal Brands and Michael Beckley warned, against conventional wisdom, that it was not a rising China that the US and its allies had to fear, but a declining China. This is because “peaking powers” — nations at the peak of their relative power and staring over the precipice of decline — are particularly dangerous, as they might believe they only have a narrow window of opportunity to grab what they can before decline sets in, they said. The tailwinds that propelled China’s spectacular economic rise over the past