Top US trade envoy says Taiwan won’t get a free trade deal with new market access or reduced tariffs

Washington’s top trade envoy on Thursday offered a reality check for her counterpart from Taipei, ruling out a 90s-style free trade agreement with the island. The message came just days after John Deng, Taiwan’s top trade negotiator, stated a wish to broaden the two sides’ initial bilateral trade pact to something that looked more like an FTA. “Do you mean the traditional kind of US approach to a very, very comprehensive maximally liberalising, aggressively liberalising agreement?” responded US Trade Representative Katherine Tai when asked about finalising a free-trade agreement with Taiwan during an event hosted by the Aspen Institute in Washington. “We’re not doing that with anybody right now.” Last week, Deng revealed in an interview that Taiwan was in talks with the US about expanding the scope of a trade agreement that the two sides reached in June. “One goal is to expand the coverage, more topics like agriculture, labour,” said Deng. “Second is the market access issue, that is tariffs. We hope that one day the US government is ready for tariff talk,” he added, referring to a Taiwanese hope of reducing tariffs and gaining new market access. Tai on Thursday said the type of agreement Taiwan sought “may have been fit for the 80s and the 90s”, but that new “innovative” trade policies were needed now. Final Pentagon bill features Taiwan, Aukus and counters to China’s influence The US was dealing with “different” geopolitical tensions at a “different scale with different partners”, she added. The existing pact, known as the US-Taiwan Initiative on 21st Century Trade, does not commit to any new market access or reduced tariffs. But it aims to ease customs and processing times for goods, address corruption and help small- and medium-sized enterprises. Tai on Thursday said “excellent progress” had been made in the negotiations and that the US would “continue to look at building out those agreements, to have an arrangement with the Taiwan economy that is fit for the times”, which she described as “challenging”. Taiwan, a self-ruled island that Beijing considers a renegade province, has become a major flashpoint between China and the US in recent years over increased American arms sales and high-level political engagement. In June, as Washington boosted its trade cooperation with Taiwan, Beijing said it opposed any form of official contact between the island and other countries, including negotiating and signing any economic and trade agreements “with sovereign connotations and of an official nature”. Beijing has pledged to reunite Taiwan with the mainland, by force if necessary. And while Washington does not recognise Taiwan as an independent country, it is legally bound to support its defence capability. Since taking office in 2021, US President Joe Biden has several times committed to intervening militarily should China use force against the island, despite America’s long-standing policy of strategic ambiguity. Speaking at Thursday’s event before Tai, former British prime minister and current Foreign Secretary David Cameron said Britain and the US remained committed to the one-China policy. Taipei’s new envoy to US may be less effective than predecessor, analysts say He said London and Washington “believe in unification of China and Taiwan”, but that “cannot happen in a way that involves force or violence or coercion”. China was “watching” what is happening in war-torn Ukraine, Cameron added, as he called on Britain and the US to work together and show resolve that “resonates around the world”. Cameron believed China had substantially changed since he led Britain from 2010 to 2016. “It is a different China we’re dealing with, and we need to harden our systems and be very clear-eyed as a result,” he said, and that meant aligning “better with our allies, including the United States”. As tensions with Beijing rise, India’s engagement with Taiwan grows ‘by the day’ But a Republican congressman who serves on the House select committee on strategic competition between the US and the Chinese Communist Party observed a growing realisation that Washington’s “financial capacity is right on the edge”. This was despite the close cooperation of several countries in the Indo-Pacific region and beyond, according to Republican congressman Rob Wittman of Virginia, speaking at the event on Thursday. Citing a US federal debt of US$34 trillion, he said American allies and partners were looking to “pick up more of the financial burden because we know the United States’ checkbook is kind of running out of balance”. As an example, Wittman pointed to a backlog in delivering F-16 fighter jets worth US$8 billion to Taiwan. “We’re working to make sure they get F-16 and F-16 parts,” he said, who recalled Taiwanese officials saying: “‘We don’t want you to do it for us. We want you to help us do it for ourselves.’”