United Daily News Editorial (Taipei, Taiwan, ROC)
November 26, 2016
Executive Summary: Once the United States pulls out of Asia, confrontation between the US and Mainland China is expected to ease. Taiwan will feel less pressure to choose sides. This is a turning point. Taiwan can use this to review its one-sided foreign policy and adopt a Taiwan-centric rebalancing policy. The crux of the problem is the DPP government's anti-Mainland attitude. It lacks the courage to face reality. Since May, the Tsai government has repeatedly misjudged the international situation. It shows no signs of change. As a result, it can only paint itself further into a corner. Think about it. How can a government that pointedly ignores Mainland China, Asia's largest economy, possibly champion Asian co-operation?
Full Text Below:
Donald Trump has publicly announced that he will pull the US out of the Trans-Pacific Strategic Economic Partnership Agreement (TPP) on the very day he takes office. Shinzo Abe, who was still rushing about, could not conceal his dismay. A TPP without the US is meaningless. Tsai Ing-wen, who was attending the Asia-Pacific Chamber of Commerce, used the opportunity to urge Asian nations to follow through on economic integration. Her words were pretty. But does the president really think anyone will respond?
Trump's personnel appointments show that for the next four years the United States will be under the sway of the far right. For the world at large, Trump's announcement that he will pull the US out of the TPP, signaled the beginning of America's "new isolationism". The global trade order will be seriously impacted. For Taiwan in particular, heavily reliant on exports to the United States, restarting an economy that has been stalled for years will be harder than ever.
The TPP was the single-handed creation of the United States. Its purpose was to counter Mainland China's RCEP. This cross border economic agreement was originally between New Zealand, Chile, Singapore, and Brunei. It was later expanded, becoming a TPP with 12 member nations. The TPP was more a strategic goal than an economic partnership. Obama's Asian Rebalancing strategy forced nations on both sides of the Pacific to choose sides. When the US retreated, Malaysia and Vietnam jumped ship and returned to the RCEP. Only Japan drew its sword and looked around with alarm. Taiwan was even more embarrassed. For years it waited patiently for the second round, hoping to join. Now its dream has been shattered. Where will it go from here?
Japan is obsessed with the TPP. It desperately wants to ally with the United States to contain Mainland China. It wants TPP to cement the relationship between the two nations. Abenomics sees TPP as part of its economic strategy. It wants to use trade liberalization to promote economic restructuring. But the TPP has run aground. This will greatly diminish Abe's economic power. It will also undermine the US-Japan strategic partnership. Japan will be the biggest victim of the US withdrawal from the TPP.
The TPP was originally a set of economic “rules of the game” for small nations. It set a high threshold. It imposed high standards. It removed all tariff barriers, no exceptions. It fully liberalized financial services, telecommunications and other service industries as well. This favored small nations, but disfavored large nations. The United States sacrificed its domestic market for the sake of TPP. No wonder Trump thinks the TPP is a disaster for the United States.
Long time strategic deployment and hegemonic intervention by the United States has prevented Asia from forming its own free trade area. Now however, the US is withdrawing from the TPP. The Mainland Chinese-led RCEP will rush in to fill this vacuum. Mainland China is conducting itself in a low-keyed manner. It has declared its intent to continue Asian integration. It has stressed that the real leader of the RCEP is ASEAN. But with the United States withdrawal from the TPP, Mainland China will undoubtedly be the biggest beneficiary.
Once Trump takes office, it will be “America First”. He will not sacrifice US economic interests in order to maintain global hegemony. Instead, economic development will come first. The United States will change from military hegemonism to trade hegemonism. This will change the strategic map for global political and economic power, and determine Taiwan's fate.
What impact will an Asia without the TPP have on Taiwan? When the DPP took office, it brought cross-Strait relations to a standstill. It blindly followed in Japan's footsteps, and deliberately ignored the Mainland led RCEP and ASEAN. It bet Taiwan's foreign trade chips on the TPP. The TPP dream has now evaporated. Taiwan's sole alternative is to return to bilateral FTAs. Sadly, the DPP refuses to rethink Taiwan's development strategy based on the Big Picture. Instead, it is betting on the Taiwan-Japan Economic Partnership Agreement. It has forgotten that Taiwan has failed to improve its long-term deficit relationship with Japan. Its eagerness to become an economic vassal is the main cause of Taiwan's current plight.
In fact, once the United States pulls out of Asia, confrontation between the US and Mainland China is expected to ease. Taiwan will feel less pressure to choose sides. This is a turning point. Taiwan can use this to review its one-sided foreign policy and adopt a Taiwan-centric rebalancing policy. The crux of the problem is the DPP government's anti-Mainland attitude. It lacks the courage to face reality. Since May, the Tsai government has repeatedly misjudged the international situation. It shows no signs of change. As a result, it can only paint itself further into a corner.
Think about it. How can a government that pointedly ignores Mainland China, Asia's largest economy, possibly champion Asian co-operation?