The storm in the Formosa Strait is not going away. parade of US politicians Taiwan island negotiations will be added shortly and Washington strengthening its already significant trade ties and slapping China in the face. The parties announced this Thursday, and the predictable angry reaction from the US Beijing. “We have always opposed the negotiations of economic and trade agreements with Taiwan that have connotations of sovereignty or official character,” the State Department said.
The initiative opened in June with the grandiose title for US-Taiwan Trade for the 21st Century and was a consolation prize. Taipei Then White House separated it from the bishop Indo-Pacific Economic Treaty, which was a commitment to reduce Chinese influence in the region because it would have implied granting it the status of a country and still respected the red lines at the time. The context is hopelessly broken and a few issues seem illogical. Taiwan isn’t even pulling the deal out of the US free trade which for years asked him to reduce his dependence on China.
Congressman’s last trip Nancy Pelosi The gaseous compromise has been brought to life, and negotiations will begin in the fall. The letter of agreement includes eleven predictable and aseptic areas (trading facilities, labor or environmental regulations, anti-corruption…), but in the presentation they referred to issues that clearly point to China. One of them is “disruptions”. global trade A recurring lament from Washington, who sees state-owned companies subsidies as an unfair advantage. The other is “economic coercion” by Beijing on countries doing business with Taiwan. those Chinese sanctions Shame as much as the US has promised countries that have closed their doors to Taipei to enter diplomatic relations with Beijing.
economic pressure
It can be predicted that the outcome of the negotiations will depend on the health of relations between Beijing and Washington. It is a vital issue for Taiwan that transcends the geostrategic challenge because the economy is the most dangerous Chinese missile. 75% of the island’s GDP is based on exports, and more than 40% goes to China. Diluting this dependency with its possible repercussions on sovereignty is a political urgency and not easy to perceive.
During a visit in 2019, the Chung-Hua Institute of Economic Research assured this reporter that Taiwan aims to reduce the flow to China by up to 30% in the short or medium term. Failure can be seen after three years. After Pelosi’s trip, Beijing banned Taiwan’s imports of some fruit and fish and the export of the natural sand it needed. chips Y semiconductors. These are timid, almost symbolic sanctions, but a few turns of the screw can suffocate the candidate.
Taiwan’s relevance goes beyond the obvious. It has a population of almost 23 million and accounts for 1% of global GDP, but is still the eighth largest trading partner of the United States and indispensable in industries such as automobiles or electronics. The island manufactures many of the latest generation chips and semiconductors and is home to world-leading TSMC, whose representatives Pelosi met two weeks ago.