Fri, Dec 25, 2015 page3

• TPP can make Taiwan more competitive: study

  NEIGHBORLY HELP: The report said Taiwan could seek assistance from Japan, which is going through similar difficulties in passing the reforms required by the agreement

  • By William Lowther / Staff reporter in WASHINGTON
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  An independent study on the Trans Pacific Partnership (TPP) trade agreement said that membership in the bloc would make Taiwan more competitive and would reduce the nation’s economic dependence on China.

  If Taiwan does not join the TPP, its competitiveness would erode, the study said.

  Penned by Council on Foreign Relations member Kevin Nealer and US Department of Energy research specialist Margaux Fimbers, the study has been published by the National Bureau of Asian Research.

  The authors said that the main benefits of the TPP are derived from its regional scope and high standards for entry.

  “The benefits of joining the TPP would go beyond creating more space for Taiwan in the international arena,” Nealer and Fimbers said.

  “Taiwan’s economic future depends on maintaining its competitive advantage,” they added.

  Meeting the standards set by the TPP would necessitate a comprehensive reform in Taiwan, which would in turn make the nation more competitive in the long run, they said.

  TPP membership would also provide an avenue for trade diversification.

  The Chinese Nationalist Party (KMT) under President Ma Ying-jeou (馬英九) has emphasized the importance of joining the TPP in the second round of negotiations and the Democratic Progressive Party (DPP) has also backed membership, the paper said.

  “Taiwan still faces two main challenges as it seeks to join the TPP — domestic resistance and opposition from China,” the study said.

  It said that one possible diplomatic option for the US would be to work privately toward Taiwan’s inclusion in the TPP — provided it meets the same requirements as current members — to blunt the effect of a veto by the Chinese government.

  “This option could be pursued alongside a strategy of accelerating China’s TPP entry and is not inconsistent with the US policy goal,” the study said.

  It said that Taiwan should focus its efforts on the areas of the TPP where it can achieve successful outcomes, such as the services sector, rather than attempting to tackle all aspects of the partnership at once.

  “Taking incremental steps toward meeting TPP standards will enable Taiwan’s leaders to build public support for more difficult reforms in agriculture and investor-state dispute resolution,” the study said.

  Transparency would be “extremely important” in convincing the public that joining TPP is in Taiwan’s best interests, the study added.

  It said that Taiwan should engage in bilateral discussions with TPP members to review key trade and investment issues and consider how it might reform its economy to engage in a follow-up round for potential new members.

  “In particular, Taiwan should engage with Japan, which has publicly supported Taiwan joining negotiations and is facing similar difficulties in passing the domestic reforms required by the TPP,” the study said.

  It said that given all the strategic and security implications of further integration into the Asia-Pacific region, joining the TPP would be immensely advantageous for Taiwan.

  “It is imperative for Taiwan to knit itself into the economic and commercial fabric of the region,” the study said.

  “Being a bystander at a time of accelerating regional integration would inevitably reduce Taiwan’s competitiveness and marginalize its role,” the study concluded.
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