Taiwan Urges US to Sign New Trade Deal

April 12, 2019 Updated: April 12, 2019

News Analysis

UNION CITY, Calif.—Taiwanese trade official Chuang Suo-Hang called for a new trade agreement between the United States and Taiwan in a speech at a banquet on March 30.

The banquet took place while James Francis Moriarty, chairman of the American Institute in Taiwan (AIT), was visiting California. The AIT is the de facto embassy of the United States in Taiwan.

Moriarty’s visit to California was an important part of a series of events celebrating the 40th anniversary of the Taiwan Relations Act, which was signed into law in April 1979.

“Economic stability is national security; economic stability is regional security,” said Chuang, who is vice chairman of the Taiwan External Trade Development Council (TAITRA), in his March 30 speech at the annual banquet held by the San Francisco Bay Area Taiwanese Chamber of Commerce (SFBATCC).

Chuang said that the Taiwanese government encourages Taiwanese businesses to invest and to create jobs in the United States, and an agreement to secure closer bilateral trading relations will serve the best interests of both countries.

“Stability in the Taiwan Strait is essential to the goal of peace in the Indo-Pacific region,” Moriarty said at the banquet.

He said that a trade agreement could be accomplished through Trade and Investment Framework Agreement (TIFA) negotiations by both sides. TIFA is a program managed by the Office of the United States Trade Representative.

“There is no better time to celebrate the U.S. and Taiwan relationship than now, because this year marks the 40th anniversary of passage of [the] Taiwan Relations Act,” said Joseph Ma, director-general of the San Francisco Taipei Economic and Cultural Office, at the banquet.

Ma said the Taiwan Relations Act has not only secured the relations between the United States and Taiwan, but also “functioned as a cornerstone in maintaining peace and stability of the Indo-Pacific region.”

More than 400 Taiwanese business and community leaders from California attended the SFBATCC’s annual event.

Defending Democracy

Moriarty’s visit to California took place about two weeks after the United States and Taiwan launched a joint platform called the Indo-Pacific Democratic Governance Consultation.

The new platform aims to defend the common values of freedom, democracy, and human rights shared by the democratic countries in the region.

The Indo-Pacific region generally covers India, the United States, and major Asian democracies in the region, especially Japan and Australia.

Since China became the world’s second largest economy by GDP in 2010, Asian countries surrounding China have increasingly expressed concerns about China’s economic growth without a political system of checks and balances.

China started opening its doors to the world in 1979. Beijing’s regime invited investments from the Western world to go to China, mostly because China’s 30-year practice of a centrally planned socialist economy had come to the edge of collapse.

In the 40 years since China opened up to the West, the world’s democratic nations have granted China many advantages when it came to trade and investment, hoping China would eventually change for the better.

Widespread wishful thinking about changing China with investment from the West included the hope that making China a WTO member would change the regime.

“We’ll be able to export products [to China] without exporting jobs,” said President Bill Clinton on March 9, 2000, in a speech on the China [WTO] Trade Bill at the Johns Hopkins University.

In the same speech, Clinton also predicted that letting China join the WTO would bring peace and security to Asia and greater prosperity to the United States.

Clinton’s predictions were not unusual, but represented the optimistic views of many think tanks at that time in the West.

In 2015, China superseded Canada and became the largest trading partner of the United States. The U.S. trade deficit to China exceeded $400 billion in 2018, based on statistics from the U.S. Census Bureau.

Marketwatch published a report in May 2018 titled “China really is to blame for millions of lost U.S. manufacturing jobs, new study finds.” The report stated that there were “some 6 million lost jobs from 1999 to 2010—one-third of all U.S. manufacturing employment.”

China is Taiwan’s largest trading partner. Many people in Taiwanese society have felt a clear and present economic and security threat from the Chinese regime.

In June 2013, Taiwan’s government signed the Cross-Strait Service Trade Agreement (CSSTA) with China. The agreement was criticized by some of Taiwan’s society leaders, who said it was “the last guinea pig” on trading with China.

The agreement provoked the Sunflower Movement, in which students protested against the CSSTA by occupying Taiwan’s congress for 24 days from March 18 to April 10, 2014. As a result, the agreement has been shelved ever since.

As China’s economic power rose from being the tenth largest in the world by GDP in 1979 to being the second largest in 2010, the kinds of changes expected by the West and Taiwan have seemed to be out of reach.

Taiwan’s cyber security department revealed that some 20 to 40 million cyberattacks came from China in 2017, and 360 of these attacks succeeded.

China’s saber-rattling antics against its democratic neighbor Taiwan reached an unprecedented level on March 31, when two Chinese fighter jets intentionally crossed a maritime border separating China and Taiwan.

China’s economic growth has enabled the communist regime’s power to reach far beyond Taiwan and countries directly bordering China.

Stanford University recently published a report summarizing China’s penetration into American media, universities, think tanks, politics, and other parts of American civil society.

The 200-page report, titled “Chinese Influence and American Interests,” states in its afterword: “Once largely a form of economic competition, China’s recent turn to military and political rivalry with the United States has changed the whole equation of the bilateral relationship.”

While a democratic China is currently beyond reach, Taiwan and the Western world have common interests in building stability and defending their shared values in the Pacific region.

“We have shown the world that democracy is a better path for any country,” Chuang said at the annual SFBATCC event. “We have never given up our pursuit [of] freedom and democracy, and we never will.”

Chuang Encourages Agreement

Chuang also said in his speech that Taiwanese businesses support 322,000 jobs in the United States, and that the Trump administration’s corporate tax cut from 35 percent to 21 percent “has made the U.S. an irresistible investment destination for Taiwanese business.”

Chuang said that Taiwan wants to be a responsible trading partner, following fair, free, and reciprocal trade principles.

“Let’s go forward with our united strength. Let’s sign a BTA [bilateral trade agreement]. Let’s connect [the] U.S.A. and upgrade Taiwan,” he said.