President Biden’s declaration during his trip to Asia last month that the United States would defend Taiwan has put the nature of American relations with Taiwan back at the center of American foreign policy concerns. This development has fueled new discussions about how, outside of military engagement, the United States can best help Taiwan. We walked through some of this terrain over 40 years ago.
In 1979, I left Buffalo, New York, for a year-long immersion in Japan as part of a high school exchange. Luckily, I was invited to visit the countryside with a group of adult Rotarians from Keelung. We spent hours on a tourist bus. Over a soundtrack to music by Judy Ongg (翁倩玉), we discussed current events and Washington-Asia relations, including the Soviet invasion of Afghanistan and the start of official US ties with “Beijing”. Much was beyond a high school student’s comprehension but still fascinated me.
By studying international relations and becoming an American diplomat, I came to understand how important 1979 was for our two countries and for the world. Around the time the visiting Rotarians returned to Taiwan, Taipei-based attorney Robert Parker, then president of the American Chamber of Commerce in Taipei, was flying to Washington, DC. His work behind the scenes and his testimony in the Senate helped shape the Taiwan Relations Acta legal framework to support the island’s physical security and international trade, two prerequisites for Taiwanese-American business, and a stable society following Taiwan’s sudden diplomatic derecognition.
Despite all the differences from 1979, similar importance is in the air for 2022. Parker’s two preconditions remain equally central to the US-Taiwanese relationship, and a new campaign is underway to pressure the congressional action.
The 1979 framework worked. Economic, scientific, and people-to-people ties between the United States and Taiwan have flourished. Together, we have pioneered world-changing innovations and built a business relationship valued at over US$100 billion annually. According to the US Department of Commerce, US exports to Taiwan support some 208,000 US jobs. Investment in both directions is up sharply.
Our cutting-edge interdependence, best exemplified by the semiconductor business, is remarkable. But alongside this prosperity has also grown the Chinese challenge that was front and center in 1979. Also exposed are the breakdowns in the global trade order that have made complex manufacturing supply chains possible and, we thought then, the fair distribution of the benefits of this international division of labor. America’s trade liberalization momentum stalled in January 2017 with its withdrawal from the Trans-Pacific Partnership (TPP) agreement, but even a decade earlier, progress in strengthening economic ties between the United States United and Taiwan had slowed down.
Since June 2021, the Biden administration has repeated or launched four economic initiatives with Taiwan that hold promise for improving bilateral relations. But they just don’t go far enough. Without global reach, market access coverage and clear destination, these initiatives – from Technology Trade & Investment Collaboration on Newest U.S.-Taiwanese 21st Century Trade Initiative – below in terms of binding integration and geopolitical signals. A full-scale free trade agreement (or bilateral trade agreement, BTA) can better address the challenges of instability in the Taiwan Strait and around the world.
The case for bolstering American security by bolstering Taiwan’s economy and reducing its international isolation was hammered home years ago. Today, studies like the one just completed by the Heritage Foundation add the economic and business case for BTA. The benefits of a large-scale agreement are indisputable; the case for acting now, just as much. Beyond the bilateral framework, an ACC will encourage like-minded countries to enter into trade agreements with Taiwan as well, strengthening its international space in the process. An BTA would also position Taiwan to make a critical contribution to a separate multi-stakeholder discussion aimed at establishing rules for strategic trade and technology management with China, including a paradigm for coordinating multilateral investment screening and controls. exports.
Creative thinking and inspired leadership are needed to successfully carry out a BTA against bureaucratic inertia and political drift. The times seem to be calling for Congress to take the lead in mandating trade talks. For all the partisan rancor in Washington, support for Taiwan is strong in both parties, and an FTA is one of the pieces of legislation likely to generate broad bipartisan support. Trade strategist and veteran diplomat Kurt Tong has called on Congress to reassert its constitutional power through legislation requiring the start of BTA negotiations with Taiwan. The proposal also calls on Congress to provide funding, set a specific timeline, and establish a “trade promotion authority”-type legal basis for the pact.
Achieving a BTA will require political will and a show of hands from governments and the private sector in the United States and Taiwan. But as energy and commodity markets crash, inflation rises and a sovereign border in Europe is crossed, now is the time for Taiwanese and US companies and the US Congress to impose a BTA in the name of economic prosperity and regional stability.
As Mark Twain is famous to have said, “history does not repeat itself, but it rhymes”. Hopefully, we’ll see a resonance of 1979 in 2022…both in recognition of the issues at hand and in a winning combination of corporate American engagement and congressional judgment.