The TAIPEI Act: well intended but uncertain?

Written by Elizabeth Freund Larus.

Image credit: Working Lunch in the Cabinet Room of the White House by TPKanslia/Flickr, license CC BY-NC-ND 2.0

US President Donald Trump on March 26 signed into law the Taiwan Allies International Protection and Enhancement Initiative Act (TAIPEI Act), strengthening US commitment to protecting Taiwan’s international standing. Passed earlier by both house of Congress with unanimous consent, the law is a response to China’s increasing pressure to shrink the island nation’s diplomatic space. The Act encourages countries to support Taiwan’s diplomatic recognition or to strengthen unofficial ties with the island, and to support Taiwan’s participation in international organisations. What form would these measures take, and what is the likelihood of their implementation?

Maintain Diplomatic Allies and Unofficial Ties

Diplomatic partners lend legitimacy to a country’s claim to sovereign status. Since President Tsai Ing-wen’s election in 2016, China has been actively recruiting Taiwan’s allies. Seven allies have made the switch since her election, leaving Taiwan with only 15 diplomatic partners. It would be difficult for Taiwan (formally the Republic of China) to maintain de facto political independence if no countries viewed it as a sovereign state. Hence, the United States considers diplomatic partners essential to Taiwan’s survival. The Act rewards countries that stick with Taiwan and punishes those that undermine Taiwan’s security or prosperity. Rewards include increased diplomatic presence or expanded assistance. This provision raises questions about its implementation. Will Washington reward Taiwan’s allies now, as an incentive to maintain formal relations with Taipei? Or will Washington reward only those allies that have resisted temptation after having been courted by Beijing? Might a flirtation with Beijing be worth a US reward? The Act also allows punitive actions against countries that switch. Specifically, that Act allows the United States to reduce or terminate its diplomatic presence in countries that move to downgrade their ties with Taiwan, and also limit or cut off aid to them. It is doubtful that Washington would go so far as to decrease its diplomatic presence in a country over the Taiwan issue. Making US diplomatic presence contingent on a country’s behaviour toward Taiwan inflates the island’s importance in US foreign policy. Treatment of the Taiwan issue has never been the holy grail of US foreign policy; it is dangerous and foolhardy to do so now. Also, the United States may end up engaging in “chequebook diplomacy,” the practice of offering large sums of money to buy diplomatic favour. We could expect China to meet or exceed any money that Washington offers a country that moves to downgrade its ties or considers switching from Beijing to Taipei. Is Washington willing to compete with Beijing’s dollars in a diplomatic contest? What if a country switches anyway, despite Washington’s best efforts? The US will look weak in the eyes of Beijing and the world. What if the US fails to retaliate? That would make the United States look gutless. The irony is that the United States, which jettisoned Taiwan for China in 1979, would be punishing switchers for emulating the United States. The threat to limit or cut off aid to countries that downgrade ties is an ill-conceived threat. A country that switches sides will likely have figured out that relations with China are more advantageous than relations with Taiwan. What benefit the US will get out of cutting off aid to that country is a mystery. Other than saving US taxpayers money (which is a good thing), Beijing would gleefully rush to fill the void, further marginalising the United States there.

Support for Taiwan in WHO and other International Organisations

The Act calls for the United States to support Taiwan’s membership in International Organisations (IOs) that do not require statehood. Currently, the most important IO for Taiwan’s well-being is the World Health Organisation (WHO). China forced Taiwan into observer status at the WHO in 2009 and blocked Taiwan altogether after Tsai’s election in 2016. Taiwan has a better chance than ever to regain observer status. President Trump and the US Congress are angry that the WHO largely ignored Taiwan’s warnings about the human transmission of COVID-19 while negligently praising Beijing for transparency. Support for Taiwan’s inclusion in the World Health Assembly (WHA), the WHO’s decision-making body, is growing. Last year and before the COVID-19 outbreak, the United States, Japan, Germany and Australia — and Taiwan’s diplomatic allies — supported Taiwan’s participation in the 2019 WHA meeting. US Secretary of State Mike Pompeo recently called for Taiwan’s inclusion in this year’s meeting over China’s objections. Those objections might have a bit less punch after President Trump halted payments to the WHO, pending a review of the organisation’s warning about the coronavirus. The United States and Taiwan’s diplomatic allies, as well as Australia, India, Israel, Japan, New Zealand and South Korea, have publicly praised Taiwan’s success in handling the pandemic, in contrast to their criticism of China. Editorials and stories supporting Taiwan’s inclusion in the WHO have also appeared in newspapers and online commentary in Britain, Canada, France, India, Poland, South Africa, St. Lucia and the United States.

Free Trade Agreement

Enhancement of unofficial relations with Taiwan, which are likely to be implemented, will be through the provision of the TAIPEI Act. This is expected to take the form of a bilateral Free Trade Agreement (FTA). Under a US-Taiwan FTA, both countries would expand business exchanges by lowering tariffs and conferring preferred trade status on each other. Supporters of Taiwan in Congress have been kicking this idea around for a long time, but the chances of it coming to fruition were not great. However, the chances for a bilateral FTA between the United States and Taiwan have increased since the COVID-19 outbreak. Taiwan’s economy took a hard hit after Tsai’s election when Beijing began to limit approval of visas for mainland tour groups. Beijing is trying to make Taiwan more dependent on China by trying to erase Taiwan off the map when it pressures businesses, IOs, and foreign governments to identify Taiwan as a part of China. The US-China trade war has also hurt Taiwan’s economy. There is significant sympathy in Congress for Taiwan, as evidenced by the universal support for the TAIPEI Act, and significant animosity with China for its trade practices and lack of transparency over the COVID-19 pandemic. At a time when many countries are prohibiting the export of personal protective equipment (PPE), Taiwan has donated more than 10 million medical-grade masks to the United States. Additionally, as testament to confidence in their quality, the White House apparently kept 3,600 for key officials.

The major hurdle to an FTA has been Taiwan’s refusal to allow the import of certain beef and pork products. The US resolved similar problems with China and Japan. There is no reason why the United States and Taiwan cannot resolve and come to an agreement on these agricultural imports.

The Balance Sheet

The TAIPEI Act strengthens US support for Taiwan and encourages other nations and IOs to maintain or develop official and unofficial relations with Taiwan. Some of its provisions are realistic and might come to fruition, such as enhancement of unofficial relations. Other provisions are unrealistic, such as punishing countries for switching formal relations from Taiwan to China. Passage of the Act follows the unanimous passage and promulgation of the Taiwan Travel Act, which allows official exchanges between the United States and Taiwan. These two acts indicate overwhelming support for Taiwan in the US Congress and White House. Chances are better now than in previous years for Taiwan to regain observer status in the WHO, and for Taiwan and the United States to move ahead with an FTA.

Elizabeth Freund Larus is Professor of Political Science and International Affairs at the University of Mary Washington, USA and Fulbright Scholar at Marie Curie-Skłodowska University, Poland. She is author of Politics and Society in Contemporary China. This article is part of special issue on the U.S.-Taiwan relations.