The US-Taiwan Business Council has issued a hard-hitting statement urging President Ma Ying-jeou (馬英九) not to wait, but to immediately seek membership for Taiwan in the Trans-Pacific Partnership (TPP).
Issued following the successful reopening of Trade and Investment Framework Agreement (TIFA) talks, it accuses Ma of being “nowhere near ambitious enough.”
Signed by council president Rupert Hammond-Chambers, the statement said that if Taiwan does not “seize the initiative and take some major steps forward on its own,” it will be left further behind its global rivals.
“Ma’s second-term legacy should not be laying the groundwork for TPP membership in eight years — it should be TPP membership now,” Hammond-Chambers said.
US Deputy Trade Representative Demetrios Marantis and Vice Minister of Economic Affairs Bill Cho (卓士昭) completed two days of TIFA talks earlier this week following a five-year suspension resulting from Taiwanese restrictions on imports of US beef.
They set up working groups to focus on investment and on technical barriers to trade and agreed on other measures to provide direction for the next year of negotiations leading to another TIFA meeting next year in Washington.
Hammond-Chambers said the most important development was the groundwork both sides laid for a possible Bilateral Investment Agreement (BIA).
“This is an essential building block to a more robust and ambitious trade relationship, and it is a welcome indication that both sides are prepared to press for significant outcomes,” he said.
However, for Taiwan, Hammond-Chambers said the resumption of TIFA talks with the US was only the beginning of what must be a sustained push for further and more wide-ranging trade arrangements with its myriad trading partners.
“A chief target should be Taiwan’s participation in the Trans-Pacific Partnership as soon as possible,” he said.
He said Ma is now “profoundly unpopular” due to deep countrywide angst over chronic low growth, rampant underemployment and stagnant wages.
“If Taiwan creates a structural trade imbalance weighed too heavily towards China, it runs the risk of also creating a domestic political and cross-strait imbalance which would raise tensions should Beijing try to use it to coerce political concessions,” he said.
The US and other countries in the region should be seriously concerned about the potential for Taiwan’s economic marginalization or a trade relationship too weighted toward China, he said.
“It is inherently destabilizing,” he added.
There must be a counterweight to the cross-strait Economic Cooperation Framework Agreement (ECFA) to avoid a future rise in tensions, while the US-South Korea Free Trade Agreement (KORUS), along with other impending free-trade pacts, are an immediate call to action for Ma and Taiwan, Hammond-Chambers said.
“Taiwan is hugely reliant on access to foreign markets for its economic well-being, but access to those markets is increasingly wrapped up in the politics of Taiwan’s relationship with China,” he said.
Ma would be well advised to use KORUS as a guidepost for his second term, Hammond-Chambers said, adding that by unilaterally embracing reform, he could bring Taiwan into compliance with the standards set by the agreement.
“Ma should instruct his new premier, Jiang Yi-huah (江宜樺), to have each ministry assess what changes will be required,” he said.