Tue, Jul 28, 2020 page8

• Tsai needs to concede on US pork

  • By Bill Sharp
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  Nearly two months into her second term, President Tsai Ing-wen (蔡英文) has already gained enormous political capital.

  In January’s presidential election, she received a record-breaking 8,170,231 votes, and her Democratic Progressive Party (DPP) retained control of the legislature. Her capital has further grown due to the exemplary manner in which her administration has managed COVID-19.

  With a 68 percent approval rating, according to a New Power Party poll in May, Tsai needs to use that banked capital to open Taiwan’s market to US pork and food imports from five Japanese prefectures. By doing so, she would reduce Taiwan’s economic dependence on China and buttress the nation’s sovereignty.

  Throughout her campaign, Tsai drew attention to the close relationship that she has developed with the US. Nevertheless, she lacks a free-trade agreement (FTA) with the US, as well as a bilateral investment treaty (BIT), despite taking every opportunity to promote such deals to US officials or members of the US Congress.

  The major stumbling block is that Taiwan has refused to open its market to US pork containing ractopamine, an additive that enhances leanness, claiming that it is not safe.

  Nevertheless, the US Food and Drug Administration has declared ractopamine safe. The additive is allowed in pork production in 26 countries, with another 75 nations permitting imports of pork containing ractopamine.

  Moreover, in July 2012, the UN’s Codex Alimentarius Commission, which sets international standards for food safety, approved a maximum residue limit for ractopamine which US pork meets.

  The US position is firm and would remain fixed: No US pork imports, no trade agreement. Frankly, a Taiwan-US FTA or BIT is much more important to Taiwan than they are to the US.

  The US trade deficit with Taiwan was US$25 billion last year. A trade deal would likely increase that deficit.

  While said to be friendly to Taiwan, US President Donald Trump is hawkish about reducing US trade deficits. Furthermore, he is unlikely to take any position on Taiwan that he thinks might impair trade negotiations with China.

  Tsai needs to use her political capital to persuade the public and civic groups that US pork poses no health danger.

  Let the market decide. Taiwan consumers would either buy US pork or Taiwanese pork. In other words, the best product at the best price will prevail.

  Besides advocating for a trade deal with the US, Tsai has long solicited Japanese support for admission to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

  However, until Taiwan opens its market to all Japanese food imports, little Japanese help would be forthcoming.

  Chinese pressure on partnership countries not to accept Taiwan into the agreement could only be overcome with strong Japanese support.

  Moreover, many of these countries overlap with those targeted in one of Tsai’s key economic development plans, the New Southbound Policy, which seeks to develop export markets in Southeast Asia, South Asia and Oceania to reduce dependence on the Chinese market.

  Taiwan urgently needs to reach an agreement with Japan for two reasons: First, China’s interest in joining the CPTPP is increasing. As a member, it would likely block Taiwan from joining. Second, pro-Taiwan Japanese Prime Minister Shinzo Abe is nearing the end of his tenure.

  When Tsai was campaigning in the 2016 and this year’s presidential races, she advocated the “five plus two” innovative industries plan. The program is designed to create a new commercial model that would reduce economic dependence on China.

  It would also create a new basis for Taiwan’s economy, by creating high-value products, spur innovation and end companies’ reliance on low-paying, labor intensive contract manufacturing in Taiwan, China, Vietnam or elsewhere.

  The “five plus two” plan is based on the development of green industries, intelligent machinery, the transformation of Taiwan into an Asian equivalent of Silicon Valley, advances in biomedicine, new agriculture, the creation of a circular economy, and the fast-tracking of a defense and aerospace industry.

  Export markets are needed to ensure consistent economic growth.

  Taiwan’s geostrategic position is highly important to the US, which fears that Taiwan’s unification with China would lead to the Chinese People’s Liberation Army building bases there and creating a clear path to the Western Pacific.

  In Japan, it is often said that the security of Taiwan is the security of Japan. However, Taiwan should not solely count on its geostrategic position to secure trade advantages.

  Taiwan is a developed nation with one of the most robust economies in the world. Yes, it has been ostracized in global society, but it has passed the point where it can play the role of victim and hold out for one-sided concessions.

  All of this makes it even more important that Tsai be bold. She must use her political strength to open up to US pork to secure either an FTA or BIT, and open up to Japanese food imports to gain support for admission to the CPTPP.

  Bill Sharp is a visiting academic at National Taiwan University and a Taiwan Fellowship recipient.
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