In mid-October, Foreign Minister Lin Chia-lung revealed the “model and experience” plan to keep Taiwan’s remaining diplomatic allies. The idea involves utilizing Taiwan’s technological prowess to help loyal partners in their hour of need.
To demonstrate Taiwan’s commitment beyond rhetoric pledges, Lin embarked on his first official overseas tour from October 23 to November 2, visiting Caribbean and Latin American allies including Guatemala, Saint Vincent and the Grenadines, Saint Lucia, Belize, and Saint Kitts and Nevis. The purpose of Lin’s trip was to assess the progress of current cooperation projects and solidify friendships via high-level talks on strategies to further meaningful interactions between Taiwan and its closest allies.
But it seems improbable that Taiwan’s initiative and diplomatic tours could help the democratic island prevail in its diplomatic rivalry with Beijing, which has been relentless in hammering the idea that Taiwan is its “sacred territory” and unification with the island is “an irreversible trend.” While seeking to poach Taiwan’s allies, China has threatened to use a heavy-handed approach to retaliate against politicians and countries that voice support for the self-governed democracy.
China’s campaign has already taken a toll. Taiwan had 22 formal partners back in 2016; today, it has just 12.
Paraguay, one of Latin America’s poorest nations, has recently sparked concerns that it could be the next to make the switch in diplomatic recognition. Exports of agricultural products, particularly soybeans and beef, have become crucial for Paraguay’s national economy. Yet, unlike Uruguay and Brazil, two regional beef-producing powers, Paraguay has been barred from exporting beef to the United States since 1997. Worse, China put a de facto embargo on Paraguay, blocking the direct import of grains produced by local farmers and refusing to engage in trade deals with Asunción.
Meanwhile, Taiwan receives only a small amount of agricultural exports from the South American country, accounting for a pitiful 2.2 percent of overall trade in 2022. Additionally, every five years, Taipei aims to give Paraguay an average of $150 million in aid to fund projects in fundamental sectors including public health, agriculture, and education. But this amount of aid is minuscule compared to Paraguay’s $43 billion economy.
Therefore, Taiwan’s South American partner has cozied up to Beijing in search of economic benefits, with Paraguayan President Santiago Peña articulating a desire to “do more trade with China” in July 2023. In August, Peña reinitiated his intention, despite Taiwan’s warnings about Beijing’s propensity to implement unfair dumping practices in other countries. Paraguay’s efforts to mend fences with China may have left Taiwan uneasy about the future trajectory of the bilateral relationship.
Carlos José Fleitas Rodríguez, the Paraguayan ambassador to Taiwan, recently underscored the “rock-solid” ties between the two allies, which may be an attempt to allay Taiwan’s concerns about Paraguay’s resolve to pursue economic engagement with China. Yet, given growing tensions across Taiwan Strait and the booming investments that China is making in Paraguay’s neighbors, it is uncertain whether the country’s loyalty to Taiwan could endure.
In February, Guatemala, another ally and the most populous country that still maintains formal relations with Taiwan, vowed to explore potential trade ties with China. Nevertheless, Taiwan was told by Guatemala’s Foreign Minister Carlos Ramiro Martínez that formal ties between the two would persist. In alleviating Taiwan’s concerns, Martínez led a delegation to Taiwan in May to underline the “deep friendship” and show backing for the island’s international participation.
Despite many Latin American states severing ties with Taiwan over the past decade, Guatemala has maintained robust support for Taipei, particularly backing Taiwan’s trade complaint against China at the World Trade Organization in 2009 and its bid for World Health Organization membership in 2020. For Guatemala’s elite, supporting Taiwan is crucial to keeping favorable ties with the United States, the country’s largest trading partner, foreign direct investment source, and arms supplier. During President Joe Biden’s administration, Taiwan has actively engaged in lobbying efforts aimed at defusing tensions between Washington and Guatemala City.
However, the bilateral relationship is not set in stone. Despite Guatemalan President Bernardo Arévalo’s resounding victory last year, the Guatemalan Congress is under the control of opposition parties, leading to “repeated political deadlock” and “socio-political instability.” Should Arévalo seek financial incentives to implement his political agenda, especially the campaign against corruption, and strengthen public support, he may consider China as a potential source of support. This would inevitably lead to a “recalibration” in Guatemala’s formal diplomatic ties with Taiwan.
The risk of allies switching strategic allegiance from Taipei to Beijing persists. Taiwan’s remaining allies are small countries that are susceptible to China’s dollar diplomacy and massive development aid. Additionally, they lack the wherewithal to maintain their strategic autonomy and keep up funding for economic projects.
During her eight years in power, former President Tsai Ing-wen failed in her attempts to prevent the People’s Republic of China from stealing 10 of Taiwan’s diplomatic allies. Those diplomatic switches were largely due to Beijing’s offers of huge financial aid. These worries still hold true today, given China’s “diplomatic money game” and its tenacious quest to pick off Taiwan’s diplomatic allies.
In addition, the domestic politics of Taiwan’s allies has a profound impact on the diplomatic ties between the two sides. Under leftist governments, Costa Rica, El Salvador, Nicaragua, Panama, and Honduras severed ties with Taiwan, decisions that were influenced by their focus on economic development and social welfare policies. Such programs cannot be implemented without substantial funding – an area where China has a financial edge over Taiwan. Moreover, unlike right-wing politicians, left-wing leaders are less concerned with ideological issues, such as democracy and anti-communism, which historically united Latin American countries with the United States and Taiwan.
Among Taiwan’s remaining allies, Belize, Guatemala, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines are currently led by leftist administrations. Lin’s recent diplomatic tour encompassed all of them, indicating that Taiwanese leaders are well aware of domestic uncertainties in these countries and are taking proactive measures to prevent left-leaning governments from shifting diplomatic ties to China.
In keeping its allies in the fold, the incumbent administration of President Lai Ching-te has placed its bet on technological advancement. Taiwan does have knowledge, resources, and practical expertise in these areas, but there are other factors to consider as well. Most of Taiwan’s former allies that switched recognition to China grappled with economic difficulties, such as flagging trade and mounting debt, and needed China’s financial aid to get back on their feet. That dynamic persists, with Taiwan’s official allies mostly ranking low in terms of gross domestic product and economic growth. For these states, the strategic consideration that counts the most seems to be financial assistance. This is where Beijing is gaining the upper hand over Taipei in providing massive investments and even “offers of bribes” to political leaders who are willing to cut ties with Taiwan.
Additionally, the Lai administration has been dogged in its diplomatic approach: no participating in the money race with China to win allies. While this line of thinking is commendable and sensible, it is not novel. Tsai, who believed in honest friendship and relationships of respect with allies and partners, previously rejected the notion of engaging in “a meaningless dollar diplomacy race with China.”
Taiwan’s efforts to retain friends is based on the logic that formal ties with these nations “lend legitimacy to Taiwan’s claim to statehood,” thus proving wrong that Taiwan is a pariah state. On the pragmatic front, diplomatic allies are crucial as they could voice support for Taiwan in international institutions and ensure that Taiwan remains posted on important issues discussed at the United Nations, from which it has been excluded since 1971.
In an October interview, Lin unequivocally stated the continued importance of Taiwan’s remaining allies, highlighting the strategic importance of diplomatic allies to Taiwanese statehood and its international standing.
The diplomatic battle to retain alliances has intensified, yet there is scant evidence to suggest that the Lai administration can effectively deter Taiwan’s friends from succumbing to China’s financial allure. Therefore, it is incumbent on Taiwanese leaders to vigorously study the specific needs of each partner and provide support in pragmatic areas, such as infrastructure funding, capacity building, and supply chains.
Taiwan should also continue to forge ties with non-allies and like-minded partners, such as the United States, Japan, India, Australia, and New Southbound countries, as their growing support and engagement with Taiwan could help bridge the diplomatic recognition gap that the island has endured.