context: November 2018 Taiwan regional elections resulted in losses for Taiwan’s DPP, which is now seeking to re-establish its political dominance. Meanwhile, Xi and Tsai Ing-wen clashed at the beginning of the month: while Xi hailed cross-strait relations as unshakeable, Tsai stated that she would welcome a British military base in the region.

The US should start consultations with Taiwan on negotiating a bilateral trade agreement says a recent National Committee for US Foreign Policy report, writes Global Times. The US would benefit more from such an agreement than Taiwan, argues professor Tang Yonghong 唐永红 Xiamen University Taiwan Research Centre deputy director.

Through this deal, Taiwan’s Democratic Progressive Party (DPP) is aiming to revitalise Taiwan’s economy and improve the DPP’s own chances for re-election. A successful negotiation would boost DPP support, explains Tang. Negotiating a China–US trade agreement would be more beneficial, writes Tang, as the US and Taiwan have always had difficulties in resolving issues of market access. Problems include

  • Taiwanese restrictions on US imports
    • to protect its own economy
  • US seeking to increase its power and interests vis-a-vis China and Taiwan
  • international economic issues

This combination of domestic and international issues will most likely lead Taiwan’s negotiators to make substantial concessions and compromises in favour of the US, argues Tang. Despite playing the ‘economic card’, ‘unification and independence card’, ‘Taiwan Strait card’ and ‘international card’, the DPP has no hand to play.

Overcoming these obstacles won’t save Taiwan’s economy, writes Tang. Instead, Taiwan should work towards normalisation, liberalisation and facilitation of cross–strait relations. Taiwan’s economy requires global market integration. China, a global economic power would be optimum for Taiwan’s economy, but difficult relations and unwillingness to liberalise Cross–Strait trade ultimately leaves Taiwan marginalised, impacting its own development and investors’ confidence. Economic stagnation and ‘suffocation’ will be the long-term results, concludes Tang.