US efforts to break cross-strait economic links are bound to fail

The cultural links between Taiwan and mainland China coupled with their geographical nearness has made for an inevitable economic complementarity and interdependence. Efforts by United States President Joe Biden’s administration to break those ties as part of a strategy of weakening Beijing’s power and influence is therefore bound to fail. The joint announcement by American and Taiwanese officials of an initiative to strengthen trade relations is claimed to be about cooperation, fairness and prosperity. But just as with Washington’s recently unveiled Indo-Pacific Economic Framework (IPEF), the goal is less about improving prospects than isolating China for Washington’s benefit.

Dubbed the “Taiwan-US Initiative on 21st Century Trade”, the first round of negotiations on the deal will begin in Washington at the end of the month. Talks will reportedly focus on 11 areas including facilitation, agriculture, common standards on digital trade, fighting corruption, workers’ rights, environmental regulations and state-owned companies, the latter referring to, without specifically saying so, Chinese firms. The list is noticeably similar to the stated basics of the US’ regional trade framework, which has 12 Asian participants, but excluded Taiwan and mainland China. Washington’s omission of Taipei was strategic; governments would be wary about signing on for fear of repercussions from Beijing if they joined a group that included the island among its members.

Therein lies the problem with Biden’s strategy. Under agreements Washington signed with Beijing that led to the establishment of diplomatic relations in 1979, Taiwan was acknowledged as being sovereign Chinese territory under the one-China principle. By severing ties with the self-ruled island, the US could only have dealings on an unofficial level. But under Biden and his predecessor, Donald Trump, those fundamentals have been eroded through increasingly formal links and an agreement like that forged this week furthers an institutionalised approach.

US-Taiwan trade initiative signals a shift in approach, analysts say

Biden created IPEF to rival existing regional trade groups with American rules and standards at its core. By not inviting Beijing, he can further a policy of isolating his country’s stated biggest rival and strengthen an alliance to decouple trade and supply chains. Taiwan’s independence-minded leader Tsai Ing-wen welcomes such an opportunity, but as with Asian nations, it is not in the island’s interests to turn its back on trade and investment links with mainland China.

The mainland is Taiwan’s single most important trading partner and the island needs Beijing for economic health and prosperity. Reunification is inevitable and cross-strait economic activity has a crucial role. Taiwan has all to lose by turning its back on the benefits.