Cornerstone of Taiwan-US Relations

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Here’s an article from the Brookings Institute on what they see is the Cornerstone of Taiwan-US Relations. Can’t forget “the other China” and how that can affect your mainland policy.

“A strong and stable relationship with the United States is undoubtedly at the center of Taiwan’s overall foreign relations. Taipei has been greatly dependent on Washington’s political support, security commitment, arms sales, and—especially since 1979—many non-governmental (or “people-to-people”) interactions such as trade and cultural exchanges. This dependence is expected to remain unchanged in the foreseeable future.

Reuters/Phelan Ebenehack
President Ma Ying-jeou and his government therefore took office in May 2008 with the goal of repairing strained relations with the United States and, two years later, the Ma government has managed to develop a surprise-free relationship with the U.S. Taipei clearly understands that Washington’s policy guideline has been consistent over the past three decades: adherence to a one-China policy, observance of the three U.S.-China communiqués, and implementation of the Taiwan Relations Act (TRA). Washington supports Taiwan’s democratic development, pursuit of greater international space, and wishes for a peaceful resolution of the cross-strait issue. For its part, the Ma administration believes that, within this framework, Taiwan and the United States can and should develop into an alliance (not aimed against any specific third party) with shared values and great interdependence. Because the political relationship has improved under President Ma, the non-governmental relationship can play a much stronger role in enhancing overall ties, with the most potential perhaps in the commercial relationship discussed below.

The cornerstone of Taiwan-U.S. people-to-people relations

Non-governmental interaction is an important part of international relations, and is perhaps more important in the Taiwan-U.S. relationship than in most other bilateral connections. Taiwan and the United States enjoy a deep, friendly, and mutually beneficial relationship, but they have lacked formal government-to-government relations with one another since 1979. Therefore the two nations must rely heavily on non-official interaction – even to conduct official business. Section 2(b) of the TRA states that “It is the policy of the United States to preserve and promote extensive, close, and friendly commercial, cultural, and other relations between the people of the United States and the people on Taiwan…”[1] Thus by definition—at least from the U.S. perspective—the contemporary relationship is centered on non-governmental relations, even if the two governments have contrived various methods through which they can interact.

Since the abrogation of official relations, Taiwan and the United States have maintained close and extensive non-governmental ties in three major categories: business, tourism, and education. (There is also a substantial security relationship, of course, but it is outside the scope of this essay.)

Trade statistics show that Taiwan’s economy has been very dependent on the American market. In 2009, for instance, Taiwan exports to the United States totaled US$23.6 billion, or 11.6% of Taiwan’s overall US$203.7 billion trade amid the global economic downturn.[2] Taiwan’s 2009 imports from the United States reached US$18.2 billion, or 10.4% of Taiwan’s total imports of US$174.7 billion.[3] The United States is Taiwan’s fourth largest trading partner, with total bilateral trade in 2009 amounting to US$41.8 billion; Taiwan’s top three trading partners are Mainland China (including Hong Kong and Macao), US$78.7 billion; Japan, US$50.7 billion; and ASEAN states (Vietnam, Singapore, Thailand, Malaysia, Indonesia and the Philippines), US$50 billion. In 2009 Taiwan was the tenth largest trade partner of the U.S.[4]

This commercial relationship generates significant interpersonal contact and travel, and the United States is one of the top destinations for Taiwan businessmen as well as tourists. In 2009, Taiwan people paid 515,465 visits to the United States, following the 2.26 million visits to Hong Kong, and 1.52 million visits to China.[5] Americans made 369,258 visits to Taiwan in 2008, trailing only Japanese (1 million visits), Mainland Chinese (972,123 visits), and Hong Kong and Macao Chinese (718,806 visits) among foreign tourists visiting Taiwan. American visits represented 8.4% of the overall foreign tourists traveling to Taiwan that year.[6] A largely overlooked and underappreciated fact is that about two-thirds of the 50 American states have sisterhood relationships with Taiwan, and 17 state governments have representative offices on the island, promoting business interests and tourism.

Taiwan businesses have been very ambitious, flexible, and viable in the world marketplace, but Taiwan has remained quite isolated and, due to external political reasons, has lagged behind the ongoing Asian regional and multilateral economic integration. Taiwan so far has reached only five free trade agreements (FTAs) with its diplomatic allies in Central America. It is generally believed that in the long run the Economic Cooperation Framework Agreement (ECFA) between Taiwan and China will help Taiwan in signing FTAs with ASEAN countries, Japan, the United States, and the European Union. Reaching an FTA agreement with the United States has been the most significant long-term goal for Taiwan. More generally, a reorientation of Taiwan’s economy toward the mainland will benefit the Taiwan-U.S. economic relationship because it will help more American companies choose Taiwan as a gateway into the Chinese market. The lowered tariffs on both sides of the Taiwan Strait will enhance the competitiveness of Taiwanese companies in the mainland and help industries continue to invest in Taiwan. Such a situation will offer some opportunities for Taiwanese-American joint ventures.

The third indicator of Taiwan’s close non-official ties with the United States is the number of Taiwan students in the United States. Because of their sound, professional, and advanced systems and international esteem, American institutions of higher education have been the first choice for Taiwan students, far more attractive than Canadian, Japanese, Australian, European, and Mainland universities. A considerable number of Taiwan elites and opinion leaders were educated and built up their professional track records in the United States, and this is a very important factor in facilitating mutual understanding. In 2009, Taiwan sent 28,065 students to the United States, the sixth largest source of foreign students in the United States, following India, China, South Korea, Canada, and Japan[7]; Taiwan sends more students to the U.S., on a per capita basis, than any other. In the year 2009/2010, the U.S. sent 2,505 students to Taiwan and the number of American students in Taiwan between 1988 and 2010 totaled 25,598, behind only South Korean (33,972) and Japan (31,407).[8]

Taiwan ’s major goals in developing Taipei-Washington ties

President Ma has stated that his priorities for developing relations with the United States include participation in the U.S. Visa Waiver Program, enhancement of the Trade and Investment Framework Agreement (TIFA), and the conclusion of an extradition agreement. In a meeting with the chairman of the U.S. House of Representatives Subcommittee on Asia, the Pacific, and the Global Environment earlier this year, President Ma stated that “ROC-U.S. ties will center on these three issues,”[9] again reflecting the importance of non-governmental interaction in the bilateral relationship.

Taiwan into the Visa Waiver Program

Winning participation in the Visa Waiver Program, which would allow holders of Taiwan passports to visit the United States without first obtaining an expensive and time-consuming visa, would be a major victory for Taiwan. But Washington has moved slowly—not because of any touchy cross-strait issues, but because of homeland security considerations. The U.S. administration has considered the following aspects before qualifying Taiwan for this program. (A) The issuance of passports containing microchips in Taiwan, which is related to passport security; such “chip passports” can reduce the risk of fraud. (B) Substantial results in anti-terrorist cooperation. (C) The rejection rate of applications by Taiwan citizens for American visas. (D) Taiwan’s change of policy requiring children under 14 years old to interview for an ROC passport, which also reduces opportunities for fraud. The Taipei government understands that only by meeting these criteria will the chance of obtaining participation in the American visa waiver program increase.

Taiwan is also bidding for similar treatment from the European Union, and in recent years it has made some breakthroughs in gaining visa free treatment from a number of countries. Beginning July 2009, New Zealand granted ROC passport holders visa-free status for three months for a non-working stay. From March 2009, Taiwan visitors have not needed a visa for a non-working stay of six months in the United Kingdom. Japan began to give Taiwan visitors three-month visa-free stays in September 2005. Such visa-free treatment, normally reciprocal, certainly facilitates travel convenience and boosts tourism and commerce for both countries. For instance, after Japan implemented visa-free treatment, Taiwanese tourists surged to account for one-sixth of Japan’s inbound tourist market. Conversely, Japanese tourists coming to Taiwan increased to represent about one-quarter of Taiwan’s incoming tourist market. It is expected that when Taiwan joins the U.S. Visa Waiver Program, Taiwan’s visitors to the United States for both sightseeing and business purposes will boom.

Bilateral Extradition Agreement

The United States has extradition treaties with over 100 nations. It does not have extradition treaties with roughly 70 countries with which it maintains diplomatic relations, though Taiwan arguably has more exchanges with the U.S. than any of these nations except China. In the absence of an extradition treaty, some felony offenders from Taiwan have escaped Taiwan and have gone to either the United States or mainland China to avoid judicial proceedings and punishment. As Taipei and Beijing are developing closer anti-crime cooperation, major Taiwan economic criminals have begun to consider the United States their major haven and remain at large there to enjoy their illegal gains. However, public opinion in Taiwan has urged the government to expedite the process of concluding an extradition agreement with the United States. Taiwan’s diplomatic and judicial apparatus is actively pushing for a breakthrough in such negotiations, which would benefit bilateral judicial cooperation and mutual trust.

Renewing TIFA Talks

The American Institute in Taiwan (AIT) and the Council for Coordination of North American Affairs (CCNAA) signed a Trade and Investment Framework Agreement (TIFA) in September 1994, establishing a deputy minister-level communication platform for trade and investment promotion and consultations to resolve disputes pertinent to both sides. Such consultations broke down in 2008. Under TIFA, a bilateral investment agreement (BIA), e-commerce cooperation, a double taxation avoidance agreement (DTA), and green energy are the priorities of the Taiwan side; the DTA is especially important in professional exchanges, as it would make it more economically feasible for professionals from one country to work in the other. The United States is especially concerned about drug pricing in Taiwan under the national health insurance program there, restrictions on agricultural imports, a rice import quota, on-campus protection of intellectual property rights, and barriers to entering the telecommunications market.

While many of these issues fall within the purview of government policy, they depend upon private citizens and organizations for both advocacy and implementation. Taiwan’s business community, the American Chamber of Commerce in Taipei, and the US-Taiwan Business Council hope to re-open the TIFA talks[10] to gradually remove bilateral trade barriers, and they have also voiced support for the eventual signing of a free trade agreement with the United States. Regular TIFA consultations, scheduled to start early this year, were postponed due to the controversy surrounding restrictions that Taiwan’s legislature placed on the import of certain types of American beef after the Ma administration had agreed with Washington to liberalize imports. A smooth resumption of TIFA talks would be a win-win outcome for both sides, not only strengthening bilateral economic relations, but also benefiting American firms through the increased business opportunities resulting from the ECFA and cross-strait peace.

Other initiatives

In addition to these three priorities, two other aspects of people-to-people relations deserve attention. First of all, the U.S. government should allow its cabinet-level officers to visit Taiwan. The level of visits by U.S. cabinet officials is an indicator of Washington-Taipei relations and while they are by nature official contacts, they can also be considered an important type of personal interaction and public diplomacy. In December 1992, U.S. Trade Representative Carla Hills visited Taiwan to attend a conference of the US-Taiwan Business Council, which marked the first cabinet-level visit since Washington severed diplomatic relations with Taipei 13 years earlier. After the Clinton administration took office in early 1993 and conducted a Taiwan policy review, it also allowed high-level officials in charge of commerce and technology to visit Taiwan. During the eight-year Clinton administration, the administrator of the U.S. Small Business Administration, Secretary of Energy and two Secretaries of Transportation visited Taiwan, but during the subsequent eight-year Bush administration, no cabinet-level official made the trip.

In March 2008, candidate Barack Obama wrote in a message congratulating Ma Ying-jeou on his election victory that “[t]he U.S. should reopen blocked channels of communication with Taiwan officials,”[11] and despite rumors about a Cabinet-level visit to Taipei in autumn 2009, none has taken place yet. Washington is urged to first allow cabinet-level officials to visit Taiwan with those in charge of commerce and technological exchanges to further dialogue, exchanges and cooperation in related fields. Exchanges of visits of legislative delegations should also be an area for promotion.

Secondly, Taiwan’s cultural diplomacy to the United States should be strengthened. Cultural flows between Taiwan and the United States have laid a solid foundation for social interactions between the two countries. Culture—including language, food, art, literature, music, films, and television—is also a major element of a country’s soft power. Given its diplomatic isolation and its rich cultural heritage, Taiwan should be devoted to outreach in this arena. President Ma addressed this issue during his presidential campaign, proposing the establishment of a “Taiwan Prize,” envisioned as the equivalent of a Nobel Prize for Chinese-language literature, and the development of “Taiwan Academies” around the world to teach Chinese language and promote Taiwan’s culture, which could compete with the Confucius Institutes now being established by Beijing. President Ma also proposed the endowment of an NT$5 billion (US$152 million) cultural diplomacy fund to support these activities.[12] In February this year, he reiterated his plans and instructed the Council for Cultural Affairs (CCA) and the Overseas Compatriot Affairs Commission (OCAC) to develop plans and schedules.[13]

To be successful, the idea of the Taiwan Academies will require much detailed study and planning, including locations, positioning, and operations, and whether these academies should be merged with the existent Chinese- language schools in Latin America and Japan, including Osaka and Okinawa. Some of these “Chung-Hwa schools” run by OCAC have operated for some time, and up to one-third of their enrollment is by local people. They could possibly be upgraded to Taiwan Academies in the future. Overall, the establishment of Taiwan Academies is clearly a direction for Taiwan to allow Americans to gain more understanding of the art, culture and society of Taiwan, and more American tourists could be attracted to Taiwan for either sightseeing or for cultural and academic exchanges.

Conclusion

Since the Ma administration took over in May 2008, cross-strait relations have advanced toward apparent normalization and relaxation, under an atmosphere dramatically different from previous tensions. A healthier and more positive cross-strait relationship is undoubtedly the wish of the Taiwan people. But the government’s approach does not imply a degradation of the sovereignty of Taiwan or neglect of its relations with other countries; indeed, President Ma has reiterated that cross-strait ties and international relations are equally important. His government has adopted a strategy in its foreign relations to “reconcile with China, pursue a special partnership with Japan, and ally with the United States” Such a strategy is intended to strike a balance. To construct a stable and positive triangular relationship among Taiwan, China, and the United States is in Taiwan’s best interests. However, a robust relationship with the United States remains at the center of Taiwan’s overall foreign relations and, especially because of the special nature of Taiwan-U.S. ties, non-governmental interaction forms an important pillar in that relationship.

Washington’s political support and security commitment are irreplaceable and are built on close economic relations, frequent social exchanges, and smooth interactions between the two peoples. At the current stage, joining the U.S. Visa Waiver Program, signing a bilateral extradition agreement, renewing the TIFA talks, resuming visits by U.S. cabinet-level officials, and promoting Taiwan culture in the U.S. are high on Taipei’s agenda, and deserve serious consideration and the real commitment of the both sides in order to consolidate and deepen this important relationship.”

Courtesy of The Brookings Institute.

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