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Canada Should Support Taiwan’s CPTPP Bid

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The Debate | Opinion

Canada Should Support Taiwan’s CPTPP Bid

Not only do Canada and Taiwan’s values align, but also trade between the two countries is skyrocketing.

Canada Should Support Taiwan’s CPTPP Bid
Credit: Depositphotos

In late 2021, Taiwan submitted an application to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), an influential trading bloc composed of 11 countries scattered across both sides of the Pacific Ocean. However, Taiwan’s application has stalled due to political pressure from China, which is not a CPTPP member but has also put in a bid to join. Canada, as the bloc’s second-largest economy, could be an influential advocate for Taiwanese accession, but has chosen to stay neutral. That should change.

The CPTPP is the successor to the Trans-Pacific Partnership (TPP), a U.S.-led trade initiative that was in the process of being finalized before being aborted by U.S. President Donald Trump in 2016. As the TPP was designed to counter China’s economic influence, its cancellation was widely considered a major geopolitical blunder by the United States.

However, Japan salvaged the agreement and relaunched it in 2018, rebranded as the CPTPP. The bloc retained all of its members except the United States, and differed from the TPP only in that a few clauses, which narrowly supported U.S. trade interests, were removed.

Since then, the Taiwanese have been eager to join the CPTPP for strong economic and political reasons.

Taiwan is an export-oriented economy that, lacking natural resources, relies on its highly educated population to manufacture higher-value industrial goods. Reduced trade barriers would be a boon to the Taiwanese economy not only through easier access to foreign export markets, but cheaper imports of raw materials.

Politically, Taiwan is concerned that China, growing increasingly assertive under Xi Jingping’s leadership, will attempt to conquer the island nation sometime over the next decade. To avoid this disaster, Taipei is desperately seeking to minimize its political isolation and enmesh itself into crucial global supply chains.

The semiconductor industry is particularly important here. Semiconductors are essential to many high-tech products, and Taiwan, incidentally, is the world’s second largest producer of them in the world (behind only the United States). Taipei seems to be betting that allies will be more inclined to come to its aid if they feel that Beijing’s jingoism threatens global high-tech manufacturing.

The CPTPP would support Taipei’s security goals by deepening these trade connections. Moreover, it would provide Taiwan with a new platform for diplomatic engagement and international cooperation, increasing its visibility and political standing. This would signal to the world that, despite Beijing’s disapproval, Taipei cannot simply be shunned and ignored.

In many ways, the advantages of the CPTPP mirror those of the World Trade Organization (WTO), which Taiwan is already a member of. However, some experts have argued that the China-U.S. trade war has infected the WTO with malaise and dysfunction, and, as such, that the CPTPP is now especially valuable for current and aspiring members, Taiwan included.

While the CPTPP is generally beneficial to Taiwanese security, it poses a threat in one small, but important niche. If accepted as a member, Taiwan would have to open up its agricultural sector, which is currently protected by high tariffs, to competition.

Although this sector is economically unimportant, accounting for only 3 percent of GDP, food security is crucial for Taiwan. The small and mountainous island cannot hope to be agriculturally self-sufficient and must rely on food imports. Yet some degree of domestic food production is vital should Beijing attempt to blockade and starve the island nation.

Despite this agricultural riddle, Taiwan seems desperate to join the CPTPP. When the Taiwanese government organized its first post-pandemic press tour this August, it invited one journalist from each CPTPP member state, plus a journalist from the United States, to attend. I was there as Canada’s representative, and, throughout the week-long program in Taipei, met high-level officials and business representatives who almost exclusively spoke about either the CPTPP or the impending threat of Beijing.

While they did not say so directly, the Taiwanese officials appeared to think of the CPTPP as integral to their existential struggle for independence. It is no surprise, then, that the Taiwanese government has been trying to convince current members to back its bid. Taiwan’s representative office in Canada submitted an opinion piece to the Vancouver Sun, which was published in November, arguing in favor of Canadian support for Taiwan’s CPTPP application.

The lobbying makes sense, considering that China has aggressively been trying to keep Taiwan shut out.

Just a week before Taipei submitted its application to join the CPTPP in September 2021, Beijing submitted its own application. China’s economy does not remotely meet membership requirements (i.e. clear regulatory environment, free markets), so many experts interpreted Beijing’s submission as a bad faith stunt meant to strike a contrast with the United States – and derail Taiwan’s application.

By applying to join the CPTPP, China is putting member countries in an awkward position. If they accept Taiwan’s application but reject China’s, they could be seen as favoring Taipei over Beijing, which would have serious diplomatic and trade ramifications. This creates pressure on them to simply reject both.

As countries can only be admitted into the CPTPP with the unanimous consent of existing members, Taiwan’s application now faces a steep uphill battle. Smaller members, such as Singapore and Brunei, cannot afford to offend Beijing. It’s currently unlikely that they’ll support Taiwan unless pressured to do so.

Taiwan is thus at the mercy of the CPTPP’s larger members, who are wary of China, more economically independent, and may have the power to influence smaller members who are friendlier to Beijing.

Japan has been a stalwart ally of Taiwan and supports its CPTPP application, which is unsurprising as China’s growing militarism has alarmed Japanese leaders. Japan’s apprehension is significant enough that, earlier this month, it began turbo-charging defense spending, despite a decades-long commitment to pacifism. Using trade politics to contain China, which includes empowering Taiwan, is just one part of Japan’s security toolkit.

Australia has also supported Taiwan, though less enthusiastically. Canberra has had poor relations with Beijing since 2020, when Australian leaders criticized China for its human rights abuses in Xinjiang and attempted to clamp down on Cheese influence campaigns within Australian society. Beijing subsequently retaliated with trade restrictions that made a relatively small dent in the Australian economy.

However, Australia now seems to be taking a more conciliatory approach to Beijing. In November, Australian Prime Minister Anthony Albanese made comments suggesting that he would reject Taiwan’s CPTPP application, in what seemed to be a concession to Xi Jinping. After a public outcry, Albanese clarified that he remains open to Taiwan’s application.

Meanwhile, Canada, the CPTPP’s second-largest economy, has remained frustratingly neutral, even though it shares many liberal democratic values with Taiwan (i.e. Indigenous and LGBTQ rights).

When Taiwan first submitted its membership application, it was reported in the Canadian media that Ottawa wouldn’t publicly support it. This was dismaying. Not only do Canada and Taiwan’s values align, but also trade between the two countries is skyrocketing. Bilateral trade grew by an astounding 47.9 percent between 2020 and 2021, making Taiwan Canada’s 11th-largest trading partner.

Additionally, when the Canadian government conducted formal public consultations on expanding the CPTPP, they found that Taiwan ranked second, behind only Thailand, as the most-mentioned candidate by businesses and Canadians.

Until recently, Canada showed little interest in deepening relations with Taipei – the risk of angering China was just too great. This changed when, in 2018, Canada detained Huawei executive Meng Wanzhou on behalf of a U.S. extradition request. Beijing retaliated by detaining two Canadian citizens, Michael Kovrig and Michael Spavor, on specious grounds.

Beijing’s hostage diplomacy ultimately worked, but was a pyrrhic victory. In September 2021, Meng was released in exchange for the safe return of the “two Michaels,” but bilateral relations collapsed. A survey conducted in the summer of 2021 found that 59 percent of Canadians distrusted China. Meanwhile, a 2022 survey conducted by China’s state media found that Canada had become Chinese citizens’ least favorite country.

This newfound mutual animosity created new opportunities for Taiwan.

In early 2022, Canada’s International Trade Minister Mary Ng met with high-level Taiwanese officials to explore the negotiation of a bilateral trade agreement – something that would have been impossible a few years earlier.

Then, in August, the Canada-Taiwan Friendship Group (CTFG) announced its intent to visit Taiwan in the autumn. The CTFG is one of dozens of similar friendship groups in Canada’s federal Parliament – each group is composed of a handful of parliamentarians and is dedicated to a specific country or region.

However, the CTFG’s announcement came just weeks after U.S. House of Representatives Speaker Nancy Pelosi’s controversial visit to Taipei. The visit, which showed support for Taiwanese sovereignty, infuriated Beijing. China retaliated by organizing military exercises simulating an invasion of Taiwan, including shooting missiles into the Taiwan Strait. Concerns about avoiding “escalation” were a popular talking point that summer.

After the CTFG’s Taipei visit was publicly announced, Canadian Prime Minister Justin Trudeau commented, “There are significant reflections going on right now,” adding that “[w]e will ensure that the parliamentarians making the decision to travel or not will be done with all the reflections of the consequences and the impacts of it.”

Given the context, critics interpreted Trudeau’s comments as subtle discouragement of pro-Taiwanese diplomacy.

Yet the visit went ahead in October, with positive results. The chair of the CTFG, July Sgro, voiced her support for Taiwan’s CPTPP membership. “Why wouldn’t they be part of WHO and ICAO and those other international organizations? [Their membership] should not be a threat to anyone,” she said. As Srgo is a member of Trudeau’s Liberal party, her comments seemed to signal a larger shift in Canadian policy.

But just as things were looking up, a new complication arose. This month, Canada’s federal ethics commissioner concluded that Mary Ng, Canada’s trade minister who was spearheading trade talks with Taiwan, broke ethics rules by awarding a contract to a friend in the spring of 2020.

Ng has since apologized, but she has not, as of writing, resigned from her post, despite calls for her to do so from opposition parties and the media. To what degree this scandal will impact Canada’s trade negotiations, including those with Taiwan, remains unclear.

Whatever happens with Ng, Canada must build upon the good work it has done with Taiwan this year. Canada-Taiwan trade is already blossoming without the aid of trade agreements, which suggests that there is lots of untapped trade potential waiting to be unlocked.

For example, the MacDonald Laurier Institute has argued that allowing Taiwan into the CPTPP would bolster Canadian agricultural exports, via tariff reductions. In addition, allowing Taiwanese companies to bid for government procurement contracts in Canada, as the CPTPP would enable, would allow Canada’s provincial and federal governments to benefit from Taiwanese innovation.

Canadian policymakers should accelerate bilateral trade negotiations with Taipei and, building off the momentum of October’s successful CFTG visit, show more support for Taiwan’s CPTPP application. The trade opportunities are clear. Since China already hates Canada, what’s the worst that could happen from closer collaboration?

If necessary, Canada can simply say that it is neutrally applying the CPTPP’s membership criteria, which Taiwan clearly meets and China clearly does not.

If Japan, Australia, and Canada can stand united in their support for Taiwan, then perhaps that might be able to convince the CPTPP’s smaller countries to change course. Economic pressure from China can only be counteracted by the aggregate pressure of competing states.

A coordinated approach would also make it more difficult for China to retaliate against Taiwan’s supporters. Surely, Beijing can’t engage in diplomatic and trade spats with several CPTPP countries simultaneously.