Given all the strategic and security implications, joining the Trans-Pacific Partnership (TPP) trade agreement would be “immensely advantageous” for Taiwan, a new study said.
“It is imperative for Taiwan to knit itself into the economic and commercial fabric of the Asia- Pacific,” a National Bureau of Asian Research study said.
The study concludes that being a bystander at a time of accelerating regional integration would inevitably reduce the nation’s competitiveness and marginalize its role.
Written by trade expert Kevin Nealer and energy specialist Margaux Fimbres, the study said that TPP membership would make Taiwan more competitive, create trade diversification and reduce economic dependence on China.
It gives the incoming administration of president-elect Tsai Ing-wen (蔡英文) four pieces of advice for undertaking the reforms needed to gain TPP entry.
First, work on the services sector where success would be most easily achieved before tackling more difficult reforms in agriculture and investor-state dispute settlement.
Second, do not consider the TPP as competition with China but rather consider membership on its own merits.
Third, engage in bilateral discussions with the 12 TPP nations — especially Japan — before launching a drive to enter the partnership in a second round of negotiations for potential new members.
Fourth, continue to pursue closer economic cooperation with the US through the trade and investment agreement framework.
“The TPP will require Taiwan to undertake comprehensive reforms that may prove politically difficult, raising the core question of whether the government can persuade a wary population to support a regional trade agreement that many see as leading to more job losses and a decline in economic opportunity,” the study said.
“The high standards of the TPP would leave little room for protectionism and inefficient trade policies. Concessions on tariff and non-tariff barriers would be daunting for Taiwan, given that joining the TPP would have implications for intellectual property, labor rights, investment and the environment,” the study said.
However, the alternative is simply unacceptable to the nation’s regional position and global competitiveness, the study said.
A major challenge might come in the form of opposition from China and other Asian nations might refuse to pursue economic ties with the island at the risk of offending Beijing, the study said.
Nevertheless, the nation has an opportunity now to take the necessary steps toward TPP membership, the study said.