China Threatens Taiwan’s Reputation
Image Credit: Flickr/ billy1125

China Threatens Taiwan’s Reputation


Last Thursday, Taiwan’s Sunflower Movement exited the Legislative Yuan – which it had occupied for full three weeks – but the debate over its impact, both domestic and external, is still brewing. And rightly so. In a counter-offensive, Taiwan’s government, its de facto embassies, and supporters of the Cross-Strait Service Trade Agreement (CSSTA, also know as the Trade in Services Agreement, TiSA) argued that CSSTA opponents are wrong about the Taiwan Government’s lack of transparency and that the protests (and Taiwan’s inability to proceed with a signed agreement) will harm its international reputation as a credible economic partner.

I have argued otherwise. In my opinion, Taiwan’s relations with China are unique and other states that negotiate with Taiwan are very well aware of this fact. Protests over the cross-strait deal won’t concern them as long as their own negotiations with Taiwan are not similarly affected. Charles I-hsin Chen, in a partial response to my piece, argues that this observation is superficial. Unfortunately, in the pursuit of a more in-depth analysis, Dr. Chen fails to bring more substance to the arguments that have been already claimed by the current administration.

However, Dr. Chen is raising a couple of arguments that deserve greater attention. Dr. Chen, for example, has joined Taiwan’s Economics Minister Chang Chia-juch in arguing that the Philippines, Israel, India and Indonesia, among others, are reconsidering bilateral talks with Taiwan because of the protests and the legislature’s inability to ratify the service pact. More interestingly, Dr. Chen argues that the major obstacle for Taiwan’s FTA negotiations is that potential partners want to make sure that there will be no political interference from China.

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Dr. Chen refers to authorities like Richard C. Bush (Brookings Institution), Bonnie Glaser (CSIS) and Rupert Hammond-Chambers (U.S.-Taiwan Business Council) to support the point that China may block Taiwan’s FTA aspirations if the CSSTA is not concluded. Glaser indeed argued in a recent interview with The Diplomat that “China can use its influence to pressure one of the twelve TPP negotiating countries to not permit Taiwan to join.” It is unfortunate that the part of the interview where Bonnie Glaser argues that protests won’t affect bilateral negotiations is omitted.

In a similar fashion, Hammond-Chambers’ point that while trade relations with China have boomed, ties with other partners have expanded only marginally. Nor does Dr. Chen mention that while Hammond-Chambers argues that the dispute over the CSSTA may result in less stable cross-Strait relations, he also argues that the U.S. government cannot stay idle and needs to help Taiwan in future negotiations.

This may leave the readers somewhat puzzled. Is it Taiwan’s reputation, allegedly damaged by Sunflower protests, that makes other states rethink their bilateral negotiations with Taiwan and undermines Taipei’s ambitions to join Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP)? Or is it China’s influence exerted on the other states that is the major obstacle? If it is the latter, then the problem is hardly Taiwan’s reputation. India, Israel, The Philippines, or Indonesia may very well wait because they consider Taiwan unreliable. Or they may wait because they expect that China will use its influence to halt any FTA-like negotiations

It is also argued that negotiations with the U.S. will suffer. Why would U.S. negotiators expect that Taiwan will be willing to make concessions in its agriculture sector if Taiwan is not willing to open up its service sector? Indeed, there are ongoing problems with the Taiwan-U.S. Trade and Investment Framework Agreement (TIFA) talks that concern Taiwan’s agriculture sector, namely the issue of beef and pork. Yet, these are ongoing issues that have stalled negotiations for years. Observers in Taiwan have already pointed out that Ma’s administration may blame the protests for any future problems in TPP/TIFA (and other) negotiations when in fact the problems are being caused by the government’s decision to prevent the import of pork containing the leanness-enhancing drug ractopamine. In other words, these problems began before the protests, and will remain a sticking point regardless of the protests. Correlation does not imply causation.

Moreover, the government’s argument that the protests will damage Taiwan’s TPP prospects was eventually rebutted by the American Institute in Taiwan, America’s de facto embassy, which denied any connection between the fate of the CSSTA and the TPP talks. Rupert Hammond-Chambers in this respect urges the U.S. to help Taiwan:

By publicly declaring its backing for Taiwan’s bilateral and multilateral economic ambitions—including a bilateral investment agreement with Washington and a path to participation in TPP—the U.S. would lend invaluable support to peace and stability [in] cross-Strait relations. The U.S. would help ensure that Taiwan’s domestic debate on China policy takes place not just in the shadow of a rising China, but amid expanding Taiwan ties with trade partners around the globe.

Ma’s administration and its supporters have also misrepresented the protests by portraying them as a single-issue matter (anti-China or anti-free trade). This, however, papers over the complex web of concerns among Taiwan’s population.

True, it is partly about fear of China. Yet, it is China that is – as key defense documents underscore – a major security threat to Taiwan, and expanding trade ties with Beijing does not enhance Taiwan’s security. Of course, some of the protesters are also against free trade more generally. Yet, free trade should not be taken as a Holy Grail. Free trade creates winners and losers and Taiwan’s agriculture sector is as vulnerable as Taiwan’s SMEs operating in the service sector.

Regardless, the Sunflower protests were also about other issues including the quality of democracy and governance, and the widespread perception that the government is selling Taiwan out to advance unification and to bolster corporate interests at the expense of small and medium-sized enterprises and workers.

At the end of the day, the question is whether China will use its influence to torpedo Taiwan’s ongoing negotiations with other major trading partners. Some have argued that ratifying the CSSTA would convince China to allow Taiwan’s other negotiations to proceed unimpeded.

There’s little reason to buy this argument, however. After all, China’s agenda is not economic; its endgame is the political absorption of Taiwan. In pursuing that goal, Beijing has had no problem offering Taiwan deals that on the surface look favorable to the latter. Beijing can afford this because it is not motivated by profits but by politics. Dr. Chen rightly points out that Taiwan’s external economic relations cannot be completely decoupled from its economic ties with China. However, neither can one decouple Taiwan’s economic ties with China from China’s political agenda vis-à-vis Taiwan. Contrary to what Taiwan’s government has argued, the CSSTA is far from exclusively an economic matter.

In short, Taiwan is likely to face difficulties in future trade negotiations. But the problem is not that Taiwan’s reputation was tarnished by the Sunflower protests. Instead, it is that China is willing to hold Taiwan’s negotiations with the rest of the world hostage to its political agenda.

Michal Thim is a Ph.D. candidate in the Taiwan Studies Program at the China Policy Institute, School of Contemporary Chinese Studies, University of Nottingham and a Research Fellow at the Prague-based think-tank Association for International Affairs. Michal tweets @michalthim.

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