We should help Taiwan join CPTPP
Just as Beijing was launching the Winter Olympics, the United States House of Representatives passed a bill that should wake up Canadians to new trade realities in the Indo-pacific region.
The America Competes Act, passed by a nearly party-line vote of 222-210, promises major shifts in manufacturing and supply chain management as the U.S. seeks allies in its competition with China. Having passed the Senate last June, it awaits only President Biden’s signature. With three sections covering seven pages devoted to Canada, it lays out explicitly what Washington expects from us: close cooperation and joint initiatives on a wide range of issues, including cybersecurity, secure supply chains, critical minerals and illicit narcotics. It also includes strong measures to enhance Taiwan’s international status, including entry in the Arctic Council as an observer. We should accept it as an opportunity to leverage emerging partnerships among democracies to our best advantage.
If Canada wants to benefit from this new blueprint for trade and security in the Indo-pacific, we need to act promptly. To begin with, since we are a founding member of the Comprehensive and Progressive Agreement for Trans-pacific Partnership (CPTPP) — which Donald Trump unwisely refused to join — we can show leadership by inviting new members into the pact. The U.S. is an obvious priority. Taiwan, already a member of the World Trade Organization (WTO) and Asia-pacific Economic Cooperation group (APEC), is another.
In fact, Taiwan applied for CPTPP membership last year. It has a mature economy with transparent markets and strong property rights. The world’s leading semiconductor producer, it is an indispensable link in the global high-tech supply chain. Before the pandemic hit, Taiwan was Canada’s 15th most important trading partner worldwide and our sixth most important in Asia. Its accession to the CPTPP — and to the lowest regional tariffs possible — could only deepen our economic interaction.
Apart from that, Taiwan’s entry into CPTPP would also promote high-standard trade rules. China — which of course claims Taiwan as a wayward province — also wants CPTPP membership and would surely try to deny Taiwanese entry. But China does not meet the high standards on labour, environmental and human rights issues that Canada helped bring to the agreement.
China has no intention of complying with CPTPP’S obligations in terms of labour rights, free flow of information, government procurement regulations or subsidies for state-owned enterprises. CPTPP member-states Japan, Canada, Australia, and New Zealand already question whether Beijing can meet the labour standards, given China’s use of Xinjiang Uyghurs and other minorities as forced labour in manufacturing. Australian Prime Minister Scott Morrison has made clear that the Chinese Communist Party’s economic strong-arming of trading partners does not meet CPTPP criteria, while Japanese Prime Minister Fumio Kishida has warned that the CPTPP will not tolerate unfair trade practices or economic coercion.
The simultaneous application of China and Taiwan may appear to pose a geopolitical dilemma for the CPTPP, but it is also an opportunity. Members should evaluate the two applications strictly on the candidates’ records: e.g., whether their past economic and trade policies have violated WTO principles, whether they have weaponized trade practices so as to apply economic pressure on other countries, and whether they have violated human rights by using forced labour.
Taiwan clearly would be the more reassuring partner, and Canada should support its CPTPP inclusion because of shared values on freedom, democracy, human rights, and rule of law. We can follow the leadership of Japan, which openly welcomes Taiwan’s membership based on “a strategic point of view and with the public’s understanding.” There is no doubt China will respond with diplomatic protests. But, as Japan and Australia have done, we can explain that membership is open to all WTO and APEC members who meet CPTPP requirements for admission. Our diplomats can also assure China that it, too, is welcome to join just as soon as it meets the same standards and commits itself to the pursuit of peace in the region. CPTPP’S long-term goal is not to exclude China, but rather to encourage It to modify its behaviour. In the short term, there are also benefits to strengthening our relationship with Japan by signalling solidarity on strategic issues of peace and security involving Japan.
Encouraging both Taiwan and, eventually, the United States to join the CPTPP is one way Canada can assert leadership in the trade and security order of the America Competes Act. Canada has much to gain from America Competes. We can strengthen our own economic and political independence by supporting Taiwan’s full integration into CPTPP as part of a larger strategy to achieve supply chain resilience and free trade among democratic partners.
IT HAS A MATURE ECONOMY WITH TRANSPARENT MARKETS AND STRONG PROPERTY RIGHTS.