Taiwan’s Indispensable APEC Stage

Taiwan’s Indispensable APEC Stage

Taiwan’s Indispensable APEC Stage

The biggest news to come out of the November 17-18 APEC (Asia-Pacific Economic Cooperation) meetings in Port Moresby, Papua New Guinea was the standoff between US Vice President Mike Pence and Chinese President Xi Jinping and the failure to produce a communique for the first time because of differences over trade. Yet, also very significant was Pence’s pull-aside meeting with the Taiwan delegation head, retired Taiwan Semiconductor Manufacturing Company (TSMC) founder and Chairman Morris Chang. This was the first time a Taiwan APEC delegate had ever formally sat down with so senior a US official.  Moments like this remind us why APEC is so important to Taiwan.

APEC at first glance is not the world’s most consequential organization, as it has no binding powers. The World Trade Organization (WTO) of which Taiwan’s also a member, under the name the “Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei), means a lot more in real terms to the island’s economy. Yet APEC is the only major regional organization of which Taiwan is a full-fledged member (although, it is unable to send its head of government, or even host an annual meeting).    

APEC was founded in 1989, the year the Cold War ended, to leverage the growing interdependence of the Asia-Pacific. Its 21 members are deemed economies, hence Beijing did not block Taiwan’s membership under its Chinese Taipei moniker in 1991, the same year the People’s Republic of China (PRC) itself and then-British colony Hong Kong also joined.  The fact that APEC membership does not denote statehood is why post-1997 handover Hong Kong, as a Chinese Special Administrative Region, has remained a standalone member. Hence we saw dubiously elected Hong Kong Chief Executive Carrie Lam alongside Indonesian President Joko Widodo, right in front of Taiwan delegate Chang, in this year’s customary APEC Leaders’ group photo.  

APEC member economies were initially represented at the ministerial level at annual meetings but representation was upgraded to the head of government level in 1993 when first-year US President Bill Clinton hosted APEC in Seattle. However, Beijing has always been able to block Taiwan’s heads of state from attending APEC annual meetings.  

Before and after 1993, Taiwan was at least represented by incumbent officials tasked with economic issues and/or cross-Strait relations such as Chairman for Economic Planning and Development and Minister for Economic Affairs Vincent Siew (later vice president under President Ma Ying-jeou from 2008-12) and Straits Exchange Foundation Chairman Koo Chen-fu.

But in October 2001, when the PRC hosted APEC in Shanghai less than six weeks after the September 11 terror attacks in Washington and New York, Taiwan President Chen Shui-bian tested Beijing’s limits by choosing former Vice President Lee Yuan-tsu (李元簇), a full-on politician and legal expert, to represent the island. Beijing rejected Li’s nomination and Chen summoned Taiwan’s delegation home in protest. US President George W. Bush, trying to ensure Beijing’s effective consent to the US invasion of Afghanistan, understandably was not about to go to bat for Taiwan on this.  The United States had other priorities on its mind.

Taiwan thereafter sent to APEC academics, public/private economic officials, captains of industry, as well as former government officials more palatable to Beijing. Former Vice President Siew stood in again from 2013-2015, as did TSMC’s Chang for the first time in 2006.

Many observers kvetched when US President Donald Trump announced his decision not to attend this year’s APEC meeting and to send Vice President Pence in his stead. With Xi Jinping there and Trump not, US observers feared that it might suggest to US regional friends and allies that Beijing cared more about them than Washington did. It is bad enough that Trump had already left many of them high and dry when the United States exited the Trans-Pacific Partnership (TPP) in January 2017.  

Yet, Trump’s absence turned out to be a blessing in disguise. Following up on his landmark October 4 China speech at The Hudson Institute, Vice President Pence eloquently and bluntly articulated, among other key points, a full-throated rejection of Beijing’s militarization of the South China Sea and its predatory lending practices. Moreover, Pence did not undercut his own remarks by also taking gratuitous pot shots at America’s most trusted allies (e.g. Japan) over trade and the cost of stationing US troops abroad.   

Pence also presumably had greater diplomatic flexibility to meet Taiwan’s Chang than Trump might have had.For her part, Taiwan President Tsai Ing-wen picked an ideal emissary in Chang. He was no doubt chosen to assuage any suspicions that Taiwan was there to push an overtly political agenda. As Fo Guang University professor Liu Yih-jiun said, “In terms of political reality, he’s the one and only one (who) could be accepted on the part of mainland China, so that’s why Chang was sent out one more time.” Of direct interest to APEC members, there was also nobody better than Chang to present Taiwan’s digital economy expertise and to explain its strengths in international technological collaboration.  Privacy and intellectual property rights protection are other pressing 21st Century APEC priorities to which Chang could directly speak.  

It is ironic that Taiwan’s intentionally least political choice of all ended up having the biggest possible political impact by being the first Taiwan APEC representative to have a formal sit-down with an incumbent US vice president. When people look back at this 2018 meeting, they will likely remember three things: 1.) There was no communique; 2.) US Vice President Pence met Taiwan’s representative; and 3.)  Pence did not have a formal sit-down with Chinese President Xi Jinping.

Pence said Chang talked about economic issues in their meeting. Yet economics is also politics, especially as rival Beijing uses its growing economic might to bend others to its geopolitical will. Pence noted Taiwan’s strong support for the since renamed Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) and spoke of Taiwan’s desire for a free trade agreement with the United States.  

Taiwan has a ways to go in a number of areas (e.g. pork) before it is ready for a free trade agreement with the United States but its support for CPTPP (even though it is not a CPTPP member) is just one more reason President Trump should strongly reconsider rejoining the pact. Because generally, things that are strategically good for Taiwan are strategically good for America. As New York Post columnist Benny Avni (who supported Trump’s Iran nuclear agreement withdrawal) more or less wrote last week, CPTPP is a readymade US-friendly united Asian trading alliance that can act as a counterweight to Beijing. No wonder, aside from the pact’s economic benefits, Taiwan likes it.  

As with the new North American Free Trade Agreement (NAFTA), or US-Mexico Canada Agreement (USMCA) as it is now called, Trump can rework CPTPP here and there (Malaysia aside, most CPTPP members would love to have the United States back in and would likely make reasonable adjustments to accommodate its reentry), and then call it a renegotiated success that only he could achieve. And together with Tokyo, Washington could then push for Taiwan to join CPTPP Round Two (assuming it still wants to).  What is more, all TPP members are also in APEC. Trump could even credit Taiwan’s Morris Chang with having inspired him to reenter. What could be better?

Yet, according to Taiwan Foreign Minister Joseph Wu, this groundbreaking Chang/Pence meeting might not have even happened if Beijing had its way. In September, Wu claimed Beijing was angling to block Taiwan’s APEC participation this year.  Whatever the case, US Deputy Assistant Secretary of State and senior official for APEC Matthew J. Matthews saw fit to declare that same week (while in Taipei), “The United States always is supportive of ensuring that Taiwan’s full membership (in APEC) is never impeded.”  

As APEC’s centered on regional integration, it needs Taiwan in it because Taiwan is such an important keystone in the region’s technology supply chain. Taiwan’s edge in innovative entrepreneurship and its small and medium-sized enterprises (SMEs) are also world renowned. Taiwan has further made invaluable APEC contributions in areas like disaster prevention, trade facilitation, agricultural production, food security and women’s economic advancement (to name but a few). Taiwan even hosts some 30 non-annual meeting APEC events every year. APEC also provides rising Taiwanese stars with platforms to emerge outside Taiwan. For example, in the late 1990s, current Taiwan President Tsai chaired APEC’s trade in services group.  

Most importantly, APEC affords Taiwan an unmatched opportunity to be seen and heard on the world stage. Vice President Pence said that in his meeting with Taiwan delegate Chang, he also reaffirmed America’s Taiwan Relations Act and the US One China Policy. While some US observers believe that the US One China Policy is long overdue for a strategic rethink, in the context of Beijing’s recent bullying in favor of its own decidedly different “One China Principle,” Pence’s words were important to hear. It is for more moments like this the United States, its friends and allies must do everything to ensure Taiwan remains and thrives in APEC. Taiwan and APEC itself would be poorer otherwise.

The main point: When people look back at the 2018 APEC meeting, they will likely remember three things: 1.) There was no communique; 2.) US Vice President Pence met Taiwan’s representative; and 3.)  Pence did not have a formal sit-down with Chinese President Xi Jinping.