Posted 20/12/2021 by Bernie Lai
On 22 September 2021, Taiwan applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) following years of preparation. The case for Taiwan’s accession is being explored in the inquiry into expanding membership of the CPTPP by the Joint Standing Committee on Foreign Affairs, Defence and Trade. On 12 October 2021, Elliott Charng of the Taipei Economic and Cultural Office in Australia appeared at the inquiry to explain Taiwan’s interest in acceding to the CPTPP, asserting that Taiwan’s membership would be beneficial to Australia.
To date, Australia’s official position on Taiwan’s bid has been neutral. Trade Minister Dan Tehan has stated, ‘Australia will work with the CPTPP membership to consider Taiwan’s application on a consensus basis, in accordance with the CPTPP Accession Guidelines’. Meanwhile, there has been strong support for Taiwan’s bid from a range of entities that have provided to the inquiry ‘an overwhelming number of submissions in support of Taiwan acceding into the CPTPP’. In his recent address to the Yushan Forum in Taipei, former prime minister Tony Abbott spoke of welcoming Taiwan into the CPTPP to show ‘a readiness to support this fellow democracy’.
A notable challenge facing Taiwan during its accession process, as suggested by observers and even the Taiwanese Government, is opposition from China which has also applied to join the CPTPP. Given the recent deterioration of the Cross-Strait relations, the back-to-back applications by China and Taiwan may, as Jeffrey Wilson of the Perth USAsia Centre has observed, represent ‘a geoeconomic showdown whose outcome carries high stakes for the Indo-Pacific and the world’. Although Taiwan is formally eligible to apply for accession to the CPTPP in its own right, the CPTPP ‘signals a degree of political comity and policy alignment between its members’ and thus Taiwan’s contested statehood status will make its road to accession an extended and complex one. These tensions are apparent in China’s contrasting statements on membership issues.
In September 2021, China’s foreign affairs ministry commented on Taiwan’s CPTPP bid:
… The one-China principle is a universally recognized norm governing international relations and the consensus of the international community. China firmly opposes all official interactions between Taiwan and any country, firmly rejects Taiwan’s accession to any agreement or organization of official nature.
This appears to contrast to its stance two decades ago, as illustrated by China’s statement made after its accession to the World Trade Organization (WTO) in 2001:
We hold no dispute to Chinese Taipei’s conduct of normal economic and trade activities with other WTO members within the WTO framework and on the basis of WTO rules as well as the Presidential Statement by the Board of Directors of the [General Agreement on Tariffs and Trade (GATT)] ...
However, it should not be discounted that this statement made in 2001 was always qualified by a succeeding sentence: ‘However, we firmly oppose Taiwan’s attempts in using its WTO membership to carry out political activities aiming at creating “two Chinas” or “one China, one Taiwan”’. This qualification reflects China’s longstanding view that Taiwan’s memberships of international organisations cannot be used as a pretext for establishing de facto statehood, and may explain why China has recently applied contrasting policies to Hong Kong and Taiwan.
China has expressed its active support for Hong Kong’s bid to a comparable trade pact, the Regional Comprehensive Economic Partnership (RCEP), often regarded as a China-backed alternative to the CPTPP. The RCEP is open for accession by ‘any State or separate customs territory’ under its Article 20.9 in the same way the CPTPP is open for accession by ‘any State or separate customs territory’ under its Article 5. Hong Kong has been operating as a separate customs territory in the WTO—as has Taiwan.
Indeed, although officially identifying as the Republic of China, Taiwan made its accession request to the CPTPP under the WTO-approved title of the ‘Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu’. As Taiwan has not applied to the CPTPP as a sovereign state, its application does not appear to be incongruous with China’s ‘One-China’ interpretation—regardless of China’s view on Taiwan’s motivation to accede to the CPTPP. This makes the contrast between China’s support for Hong Kong’s RCEP bid and China’s opposition to Taiwan’s CPTPP bid conspicuous, albeit unsurprising given President Tsai’s consistent stance that ‘[Taiwan is] an independent country already’.
Given this context, it is worth noting the comments made by China’s commerce ministry in June 2020 about President Trump’s announcement revoking Hong Kong’s preferential treatment as a separate customs territory from mainland China:
The status of Hong Kong as a separate customs territory has its legal basis from the WTO protocol … This legal status, established by the multilateral rules of the WTO, is recognized by other Members, not granted by a single [WTO] Member.
…
Unilateralist measures taken in accordance with American domestic law, in disregard of the basic norms governing international relations, will be a violation [of] the WTO rules … We will … oppose foreign interference into Hong Kong affairs …
This compares to a comment made by China’s Taiwan Affairs Office of the State Council [Chinese-language source; translated below] in September 2021 on Taiwan’s CPTPP accession bid:
Taiwan’s accession to the WTO as a separate customs territory does not constitute a precedent for Taiwan to join regional free trade pacts or to sign free trade agreements.
Taiwan also faces a challenge in terms of its trade policy towards Japan, reportedly one of its most supportive CPTPP members. Following the Fukushima Daiichi nuclear plant disaster in 2011, Taiwan imposed a ban on agricultural and food imports from five Japanese prefectures. Reported statements by Japanese and Taiwanese officials alike provide little clarity on whether the issue will be brought to their bilateral CPTPP negotiation table. Meanwhile, Taiwan may still face domestic political pressures on the ‘nuclear food’ issue. Despite the Tsai Government’s efforts to lift the ban on Japanese imports, there has been persistent resistance in Taiwan to allowing their importation. In a November 2018 referendum, approximately 78% of Taiwanese voters favoured [Chinese-language source] maintaining the prohibition. Three years on in the recent December 2021 referendum, approximately 48% of Taiwanese voters favoured banning pork imports with ractopamine residue—a similar issue considered by President Tsai to be capable of undermining Taiwan’s CPTPP bid. Although the results of both referendums on two separate food safety issues may not be directly comparable, the outcome of the December 2021 referendum may indicate a shift (albeit an almost even split) among Taiwanese voters’ views on food safety issues generally since November 2018.
The ‘nuclear food’ issue is only one example of the many domestic political challenges that Taiwan may face during its CPTPP accession process. Taiwan’s Council of Agriculture acknowledges [Chinese-language source] that if Taiwan accedes to the CPTPP, the introduction of tariff cuts will adversely affect at least 20 Taiwanese agricultural products that are currently protected by tariff quotas and special safeguard measures. On that note, the Taiwanese Government would likely want to avoid the repetition of ‘rice bombing’ incidents perpetrated in support of local rice farmers affected by the acceleration of rice imports after Taiwan acceded to the WTO about two decades ago. Therefore, beyond China’s opposition to its CPTPP accession bid, it will also be a delicate balancing test for Taiwan between domestic politics on relevant local issues and any expectations or demands from current CPTPP members who will need to decide by consensus on Taiwan’s application.