As president of the United States, Donald Trump has altered the course of the previous administration’s policies in many arenas. Nowhere, perhaps, has the impact of the new administration’s shift in policies been more visible than in the trade arena.
On his first day in office, President Trump notified the Office of the United States Trade Representative (USTR) to withdraw from the painstakingly-negotiated Trans-Pacific Partnership (TPP), a multilateral trade deal. The 12-nation trade pact had been the hallmark of the latter half of the Obama administration’s “Pivot to Asia” policy. Consequently, countries throughout the world have been scrambling to adjust to the new political-economic reality in the world’s strongest democracy. Taiwan is no exception.
While clearly eschewing multilateral trade agreements, the Trump administration has indicated its interest in pursuing bilateral trade deals with other countries. To be sure, the pathway ahead for the TPP is at best murky, yet the Tsai Ing-wen administration is ramping up efforts to deepen bilateral dialogue with the United States on “upgraded” economic cooperation.
Indeed, at the American Chamber of Commerce’s annual Hsie Nian Fan celebration on March 22, President Tsai declared that “Taiwan and the US should engage in bilateral discussions and trade negotiations as a matter of priority. Both sides should have frank and substantive discussions and work together towards a new bilateral trade agreement. Preferably, of course, FTA type.” Her administration recently proposed a stimulus package of US$29 billion (T$882.4 billion) over eight years, which is subject to approval by the Legislative Yuan, ostensibly to shore up the island’s export-driven economy in light of perceived global economic uncertainties.
These extraordinary efforts by Taiwan’s government dovetail with the Trump administration’s stated goals of creating jobs at home and encouraging more investment into the United States. In written responses to questions posed by the Senate Finance Committee, President Trump’s nominee for head of the Office of the US Trade Representative, Robert Lighthizer, unequivocally stated “I intend to develop a trade and investment policy that promotes a stronger bilateral relationship with Taiwan.”
The former deputy USTR and next possible top trade negotiator noted that the United States will “examine the prospect of additional negotiations with Taiwan.” He added, “Recognizing that foreign investment from Taiwan and elsewhere can create more jobs in the United States and increase U.S. economic growth and competitiveness, I intend to develop a trade and investment policy that promotes foreign investment into the United States that advances these objectives.”
In this special issue of the Global Taiwan Brief, we asked three experts to weigh in on a potential upgrade in US-Taiwan economic relations under President Trump. The three contributors include a career US Foreign Service Officer with more than 30 years of experience, an economic policy researcher in the Taiwan government, and a prominent think tank expert. The articles explore a range of topics, such as an overview of Taiwan’s current trade policy; Taiwan’s “trade space,” post-TPP, and a roadmap for enhanced US-Taiwan economic cooperation.
There are, indeed, many uncertainties brought about by the Trump administration’s change in trade policies. Despite this shift, however, complementary interests remain between the United States’ and Taiwan’s economic policies.
As one article in this week’s issue notes: “The current Tsai administration, recognizing the risks of having China take up nearly 40 percent of our export trade volume, opted for a policy direction designed to facilitate the diversification of trade and investment destinations to avoid over-dependence towards one economy.”
Despite the apparent setbacks for the multilateral approach towards global trade, another article in this week’s issue points out potential opportunities for Taiwan in this new political environment.
While recognizing the potential for improved economic relations between the United States and Taiwan, the third and final article in this week’s issue soberly asks the critical question: Where will Taiwan rank in terms of US trade policy priorities under the Trump administration? It then offers a clear-eyed assessment of the political feasibility of options for upgrading trade relations.
The main point: While there are complementary interests between the Trump administration’s approach to trade and Taiwan, questions about priority and political feasibility remain.