Taiwan needs a free-trade agreement (FTA) or bilateral investment treaty (BIT) with the US and to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) being promoted by Japanese Prime Minister Shinzo Abe. However, domestic politics in Taiwan limits the possibility of all three, as do the politics of the US and Japan. Nevertheless, Taiwan is of paramount geostrategic importance to the US and Japan.
President Tsai Ing-wen (蔡英文) wants to be re-elected in 2020. To do so, she faces a resurgent Chinese Nationalist Party (KMT) energized by its decisive victories in the Nov. 24 local elections.
Taiwan polling data is often looked upon with skepticism, but Tsai’s support rating is low, ranging between 19 percent and 31 percent.
While she seems to have secured factional backing in the Democratic Progressive Party (DPP) for her re-election effort, such support is not absolute. She needs a concrete accomplishment she can use to further consolidate her DPP support and sell to voters. Such an accomplishment should be one that brings money quickly into the economy.
Besides wishing to be re-elected, Tsai seeks to reduce export dependence on China. More than 40 percent of Taiwanese exports go to China. Her New Southbound Policy and “five plus two” industrial innovation program are longer-term propositions that are unlikely to bear immediate results.
To help her achieve re-election and reduce economic dependence on China, Tsai needs more cooperative trade relations with the US and Japan — now.
Some observers advocate an FTA with the US. However, an FTA can take years to negotiate. Tsai needs help now.
Others argue for a BIT with the US. A BIT could possibly be concluded before the 2020 presidential and legislative elections. It would have less impact than an FTA, but would bring more money into the economy, create more jobs, and help reduce dependence on China.
Standing in the way of a US-Taiwan FTA or US-Taiwan BIT are the US Congress and Taiwanese sensitivities about food safety. The US pork industry is using its political clout in the US Congress to insist that Taiwan open its doors to pork fed with ractopamine, a feed additive that is used to increase leanness in animals. Taiwanese are wary of consuming pork fed with ractopamine, believing it to be a health hazard.
The US Food and Drug Administration has declared ractopamine safe. The additive is allowed in pork production in 26 countries, while another 75 countries permit the import of pork fed with ractopamine, although their own herds are not fed with it.
In July 2012, the Codex Alimentarius Commission, which sets international standards for food safety, approved a maximum residue limit for ractopamine, and US pork meets that standard. While the beef import issue is 90 percent solved, certain cow parts, such as the spine and intestines, as well as ground beef, are still prohibited from entering the Taiwanese market, because of the health danger that the public perceives.
In the local elections, referendum No. 9 launched by former Taipei mayor and KMT Vice Chairman Hau Lung-bin (郝龍斌) passed with 78 percent, or 7,791,856, of votes in support of it. The issue prohibits the import of Japanese food produced in Fukushima Prefecture, the location of the Fukushima Dai-ichi nuclear power plant disaster, and the four surrounding prefectures of Ibaraki, Tochigi, Gunma and Chiba.
Reacting to the vote, Japan quickly suspended the Taiwan-Japan Economic Partnership Committee, which addressed economic, trade and investment issues through dialogue.
Moreover, Japanese Minister of Foreign Affairs Taro Kono expressed disappointment about the passage of the referendum and said that it unfortunately made Taiwan’s chances of joining the CPTPP remote.
Kono added that if the import ban contravened WTO regulations, Japan would take the issue to the body.
Taiwan does not need a WTO squabble with Japan. Next to the US, Japan is the most important country to Taiwan.
Moreover, Taiwan would likely lose such an argument. Control Yuan members Peter Chang (張武修) and Yang Mei-ling (楊美鈴) said that convincing the WTO that an across-the-board ban on Japanese food imports has legal footing could be hard since Taiwan’s testing methods lack transparency and independent risk assessments.
So what should Tsai do?
Strategy A: Former American Institute in Taiwan director Stephen Young said: “But Taiwan needs to do something to control some of its agricultural lobby’s demands.”
Young was referring to opposition to the lifting of the ban on importing US pork fed with ractopamine and the lingering beef issues.
Tsai needs to be bold and exercise leadership by explaining the economic benefits of solving the remaining 10 percent of the beef issue and opening the doors to US pork.
Giving consumers the greatest choice of domestic and imported pork is the best gauge of the public’s concern about food safety. Let the market decide.
If US pork does not sell well, it is likely because it is considered unsafe to eat or is being underpriced by domestic pork.
Admittedly there is the possibility of losing the support of the public and farmers before the 2020 election, but that would be balanced by gaining a BIT or clearing the first steps to an FTA with the US, which could be a long-term gain.
Strategy B: Taiwan’s Referendum Act (公民投票法), as amended, is new and has many gray areas that are likely to create a new set of legal questions and policy challenges. Such challenges should add an unclear, volatile new element to Taiwanese politics for the foreseeable future.
Referendums are supposed to be binding, but the act has no compulsory enforcement mechanism unless an existing law is repealed. Given that the DPP controls the presidency and the legislature, the central government could ignore the referendum results and not enforce them for the time being. There are already ongoing discussions between Japan and Taiwan on how to make way for Japanese food imports.
Strategy C: Simultaneously pursue strategies A and B.
Of the three strategies, strategy B is probably the fastest and easiest to accomplish given that discussions are already underway and owing to the gray areas in the act.
Of course, Tsai and the DPP could assume that KMT Chairman Wu Den-yih (吳敦義) will be the KMT 2020 presidential nominee and do nothing. All early polling indicates that Tsai would fairly easily win a contest against Wu.
However, it seems that the KMT could seek to field a stronger candidate, such as Eric Chu (朱立倫) or Han Kuo-yu (韓國瑜). In the run-up to the 2016 presidential election, the KMT replaced weak presidential candidate Hung Hsiu-chu (洪秀柱) with then-KMT chairman Eric Chu. All present polling shows that either Chu or Han would best Tsai.
With a signed BIT with the US and Japanese promotion of Taiwan in the CPTPP, Taiwan, the US and Japan would all benefit by Taiwan’s reduced dependence on China and enjoy economic gains.
More importantly, each party would enjoy geostrategic benefits. The US has a new appreciation for Taiwan’s geostrategic position as a barrier to the Chinese People’s Liberation Army Navy’s expansion into the western Pacific.
From the time that Admiral Timothy Keating served as commander of the US Pacific Command (2007-2009), it has been clear that China wishes to extend its reach in the western Pacific to just short of Hawaii.
The Japanese are fearful that a Taiwan united with China would put Chinese naval forces perilously close to the southernmost islands of Okinawa Prefecture and the Senkaku Islands, known as the Diaoyutais (釣魚台列嶼) in Taiwan. Taiwan’s geostrategic position gives it leverage in negotiating with the US and Japan.
Bill Sharp taught East Asian politics at Hawaii Pacific University for 23 years and also taught at Chaminade University of Honolulu and the University of Hawaii, Manoa. From 2009 until last year, he hosted the television show Asia in Review.
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