Taiwan is aiming for trade deals with more countries after breakthroughs with three G7 economies last year, Taipei’s trade tsar said in an exclusive interview.
Last year was “a good year for Taiwan because we have laid a solid foundation with the US, UK and Canada”, said John Deng, Taiwan’s longest-serving cabinet member, who is currently a minister without portfolio and head of the Office of Trade Negotiations. “Precedents set by these three can encourage other countries to follow suit. I hope other countries can overcome their reluctance and be open to trade deals and trade talks with us.”
Deng sat down with Nikkei Asia weeks before president-elect Lai Ching-te is due to replace two-term leader Tsai Ing-wen on May 20, continuing the reign of the pro-sovereignty Democratic Progressive party. Lai’s victory in the January election was seen as a repudiation of China’s hardline approach towards its neighbour, which includes relentless military incursions as well as economic and other forms of coercion.
The Communist party government in Beijing claims Taiwan as its own territory, although it has never controlled it, and has not ruled out an invasion. Its strategy has long been to isolate the democracy of 23.5mn people in the international community, pressuring other countries not to engage with Taipei. But 2023 appeared to mark a turning point, as Tsai’s administration managed to ink trade arrangements with the three advanced economies.
“Trade deals strengthen Taiwan’s international legal status and support Taiwan’s desire to remain an active partner on the world stage,” Deng said. “Signing a trade deal also demonstrates Taiwan’s capacity to commit to an agreement with another country. For example, a deal between the US and Taiwan needs approval by the US Congress and the Legislative Yuan, so its legal status is very solid.”
He added that “more trade agreements will strengthen Taiwan’s security and contribute to peace and stability across the Taiwan Strait in a meaningful way, and align with what many in the international community, including G7, want”.
While few countries officially recognise Taiwan, the island has become a semiconductor superpower, and many see it as the front line of Chinese expansionism. Taiwan’s importance in the global supply chain, Deng said, was only “appropriately recognised” after the disruptions of the Covid-19 pandemic.
Slowly but surely, Taipei has broken through Beijing’s attempts to isolate it and opened up economic pathways with global partners.
Taiwan and the UK in November inked an enhanced trade partnership arrangement, with a focus on digital trade, investment, renewable energy and net zero emissions. Taiwan also signed a foreign investment promotion and protection agreement with Canada in December, after more than two years of negotiations.
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These deals followed the Taiwan-US 21st Century Trade Initiative, signed last June. The initial agreement covers customs administration and trade facilitation, good regulatory practices and other areas. Deng said Tsai — who negotiated Taiwan’s admission to the World Trade Organization in 2002 — spent years working on the trade breakthroughs, including the pact with the US.
“President Tsai has prioritised trade deals since being elected in 2016 and gradually developed the conditions for these talks. For instance, the US showed great goodwill towards Taiwan politically and militarily after she took office, but a trade agreement is a different story,” said Deng.
“The Office of the United States Trade Representative believed Taiwan wasn’t ready, but Tsai pushed through the referendum on legalising US pork imports, demonstrating her political will to deepen partnerships with the US,” he said. She also had to overcome fierce domestic resistance from the opposition Kuomintang, which was against the pork move and sought to overturn her decision via a plebiscite, he added.
Deng also touted Tsai’s New Southbound Policy and other efforts to forge trade and investment links with south-east Asia. “Our exports to south-east Asia have reached 20 per cent [of all exports],” he said. “In terms of investment and trade, culture, education, medical care and beyond, Taiwan has achieved a win-win partnership with our south-east Asian partners,” he added, referring to Thailand, Malaysia, Singapore and Indonesia.
As for the next moves, Deng said Taiwan and the UK were looking at expanding digital trade, investment and energy ties. And he pointed out that the Commonwealth of Nations, mostly former British colonies that collectively evolved into a global association, “has many member states”. Taiwan already has agreements in place with Singapore and New Zealand, he said, and hopes to strengthen trade partnerships with Australia and India.
“There’s a foundation for India and Taiwan to move forward [with a trade deal],” he said. “Taiwanese investments will help India develop its manufacturing infrastructure. India is competing with China as a global manufacturing hub, and this represents an opportunity for Taiwan to step up its business ties.”
Deng, who has been in the cabinet for more than a decade under governments led by the DPP and KMT, has witnessed the evolution of Taiwan’s global ties first-hand. He previously served as deputy chief of Taiwan’s National Security Council from 2009 to 2014, and as economic affairs minister from 2014 to 2016.
Like many Asian economies, Taiwan is closely watching the unpredictable politics on the other side of the Pacific, where US President Joe Biden is set for an election rematch with his predecessor, Donald Trump.
Asked about the prospect of another Trump presidency after November’s election, Deng said: “Taiwan’s policy is to be friends with everyone — Democratic or Republican.”
“Regardless of who’s in power in the White House, Taiwan will endeavour to continue our free and democratic way of life,” he said. “Democracy and freedom are also a core value for the US. As to how we prepare ourselves [for a Trump victory], that’s something we have to work hard on.”
Deng said Trump’s export control proposals based on national security were “the right of every country.” Still, he stressed that “Taiwan hopes that globalisation will continue and that we can maintain good communications with the US government”.
Additional reporting by Cheng Ting-Fang and Lauly Li
A version of this article was first published by Nikkei Asia on April 17 2024. ©2024 Nikkei Inc. All rights reserved.
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