The prospect of Taiwan joining the Trans-Pacific Partnership (TPP), the centerpiece initiative of a US rebalance toward Asia, is not the focus of attention in the US at this point, Joshua Meltzer, a fellow in Global Economy and Development at the Brookings Institution, said on Friday.
“I don’t think the US really focuses on this question,” Meltzer told reporters.
Meltzer said that how much support Taiwan is able to gain from the US in its bid to join the TPP and the issue of how China will react to its presence in the giant regional trading bloc are “two key issues” that Taiwan has to address to be admitted.
Meltzer said Taiwan, as an APEC member, should be allowed to join the TPP “in a formal sense” because the 21 APEC member nations are all eligible for TPP membership if they are able to meet the high standards that are being negotiated in the agreement.
Considering that Taiwan has been absent from many of the region’s free-trade agreements (FTA) while its major trading competitor, South Korea, has made significant progress in building its FTA network, and that many people in Taiwan have concerns about the political consequences of closer economic integration with China, “Taiwan should join the TPP,” Meltzer said.
Recently, South Korea moved a step closer to joining TPP talks as it said late last month that it would soon enter into negotiations with the US, Japan, Canada and the nine other nations in the current 12-member group.
If South Korea were admitted to the TPP, Taiwan would be put “in a very difficult situation” because it is deeply embedded in the regional supply chain and competes with Korean companies in various global markets, Meltzer said.
From the US’ point of view, Taiwan has not yet been able to present itself as a credible trading partner, which is essential to TPP membership, he said.
That President Ma Ying-jeou (馬英九) had to invest an “incredible” level of political capital to resolve what essentially seemed to be “a small regulatory issue” concerning market access restrictions on US beef due to concerns over mad cow disease and ractopamine suggested that it is difficult to implement reforms in Taiwan, Meltzer said.
“It’s a small issue in a way, but I think it has created an atmosphere in the administration [of US President Barack Obama] and in Congress that Taiwan is not able to conduct serious economic reform,” Meltzer said.
Taiwan is now “on a right path forward” because the Ma administration has realized the importance of joining the TPP, has set a target of entry by the year 2020 and pledged to look at the areas where the nation needs to reform to comply with the partnership’s standards, he said.
Meltzer said Taiwan will be looked at as a credible TPP member if it can establish its own domestic reform processes, put its regulatory framework in line with TPP rules, open up some of its service sectors and address issues of investment protection.
“It would be good for Taiwan to do these domestic reforms irrespective, and then I think it will be in a good position to convince the US that Taiwan can be a credible TPP member,” Meltzer said.
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