Taiwan wants in on TPP Chuck Chiang
Lobbying eff orts: Island economy based primarily on import- export has been left out of talks for a Pacifi c free- trade zone
The final negotiations for the Trans- Pacific Partnership, a proposed free- trade zone involving 12 major Pacific economies, are close to wrapping up. Meanwhile, Taiwan is taking every opportunity to let it be known that it wants in.
For the past few years, Taiwan has been lobbying hard, stating in no uncertain terms its intention to be part of the proposed zone. Canada is one of the 12 countries involved, so its not surprising that Bruce Linghu, de facto ambassador here as Representative of the Taipei Economic and Cultural Office in Ottawa, is adding his voice.
Linghu spent the last week traversing Canada, speaking in Vancouver after events in Ottawa, Toronto and Calgary, and pushing for Taiwan’s addition to future rounds of negotiation. While he conceded Taiwan’s inclusion in the current TPP discussion is unlikely, that did not dampen his enthusiasm for future talks.
“The first round of TPP discussions is coming to an end, and I think participants really want to focus on getting that done first,” Linghu said in Vancouver. “But for the next round, I think Taiwan cannot be absent from the table.”
It is clear why Taiwan wants in on the TPP, should it be created. Despite its small size ( roughly the same as Vancouver Island), it regularly punches above its weight class in economic terms, ranking 25th in GDP and 37th in per capita income. It is also a top- 20 global trade participant and a heavyweight in semiconductors and electronic components.
But uncertainty abounds, as well. As it increases its economic ties with Mainland China ( the island’s biggest trading partner), locals are increasingly uneasy about prospects of being dominated by the world’s second- largest economy, particularly since a trade and services agreement was made with Beijing. A midterm election one week ago signalled some of those sentiments: The seat of Taipei’s mayor, often seen as a precursor position to the position of president, was won by an independent candidate supported by opposition parties. Thus the ruling KMT, which places good relations with China among its priorities, was dealt a heavy blow.
The message from Linghu is simple: Taiwan’s future depends on its willingness to step onto the global stage, and the TPP — as well as increased bilateral trade relations with Canada — is crucial for Taiwan’s welfare.
“All FTAs are, by nature, contentious,” he said. “When other markets open their doors to you, you have to open your doors for them. There’s competition. But you can’t reverse that trend. … About 50 to 60 per cent of our GDP is from import- export, so if we are left out, the negative impact would be great. We are fortunate our economic policies have been very effective in building what we have today. But if we are not active in pursuing trade, it’s easy to fall behind.
Several Canadian experts say that, given Taiwan’s willingness to join free- trade agreements and its current lack of significant number of free- trade deals ( Taipei has free- trade deals with New Zealand, Singapore, and Japan), it represents an untapped opportunity that many Canadians overlook. “When you negotiate a trade agreement, a lot of the benefits come from the early days,” said Laura Dawson, an Ottawa- based cross- border trade consultant with Dawson Strategies. “Many other Asian markets already have had FTAs that wore down those advantages. Because Taiwan is relatively new to the game, there’s an advantage to be gained from early arrivals.”
Hugh Stephens, senior fellow at the Asia Pacific Foundation of Canada and a leading consultant in Canada- Asia relations, agrees that the opportunity is there for Canada to consider all the available possibilities to do business, given Ottawa’s lack of trade connections to Asia when compared to other countries.
“I think it’s fair to say Canada’s trade links with Asia are underdeveloped,” Stephens said. “While we have a number of agreements with countries in Latin America, we only have one in Asia, and that was the FTA with South Korea ( signed earlier this year). That’s a good start, but compared to the likes of Australia and New Zealand, we are way behind.”
Taiwan is Canada’s 11th largest trading partner and its Canada’s fourth largest in Asia. Linghu said there is potential for more bilateral trade, given Taiwan is an oil- andgas importer.
“Although the size of our populations are not that different, Canada is full of resources, many of which Taiwan is already importing,” he said, adding Taiwan is very interested in the LNG that B. C. plans to sell to Asian destinations.
“Canada is already Taiwan’s number 1 source of nickel, our thirdlargest supplier of oil and the fifth largest supplier of coal. Our economies are complementary; I think there’s a lot of opportunity there.”
Linghu said he has already met with about 90 Canadian MPs since coming to Ottawa three months ago, and the interactions have generally been positive on the topic of bilateral trade relations. He added that his office will be working hard to improve Taiwan’s visibility in Canada.
He acknowledges that any discussion of Taiwan will trigger debate on its relationship with Beijing. But he noted the economic and cultural relations between Beijing and Taipei are stable, and a strengthened Taiwanese economy will bring benefits to the Mainland, as well.
“Naturally, people will speculate how Beijing feels about these issues,” he said. “I can’t comment on what they feel, but since 1980, we’ve made a significant contribution to the Mainland’s economy. Some statistics show Taiwanese investors have contributed to the creation of some 50 million jobs there, maybe more. Three million Mainland Chinese visit Taiwan each year. So if ( joining the TPP) is positive for Taiwan’s economy, it should benefit the Mainland as well.”
As for investors looking solely at the major markets when exploring Asia’s economic scene, Linghu said the so- called “smaller” opportunities may turn out to be the most lucrative and rewarding, and should not be overlooked.
“It’s not logical for someone to say, ‘ The U. S. market is the most important, so we will just do business with them.’ Don’t put all your eggs in one basket.
“Taiwan has experience doing business in Mainland China. We have experience trading with the Philippines, Vietnam, even Myanmar. It makes sense to use Taiwan as a partner to pursue those markets. It’s a double- win; it benefits both parties.”