Asia Report #53 | July 26, 2021
The Biden administration’s first few months have laid to rest any claims that its foreign policy agenda will take a backseat to domestic priorities. Important questions regarding the role of Taiwan in a renewed focus on the Indo-Pacific as it relates to force posture, economic ties and a broader strategic vision, have also begun to be answered in these early days. What have we learned already about how the Biden team views Taiwan strategically and economically? What are the prospects of cooperation bilaterally and multilaterally? How does Taiwan fit into the administration’s overarching framework within the region?
To address these questions, the Sigur Center’s recent Taiwan Roundtable featured a panel of leading experts including Derek Grossman, senior defense analyst at the Rand Corporation, Barbara Weisel, managing director at Rock Creek Global Advisors, and Robert Sutter, Professor of Practice of International Affairs at the Elliott School of George Washington University.
Defense Strategy
Derek Grossman led off the discussion by highlighting recent developments in the Taiwan Strait. Subsequent to President Tsai ing-wen’s election in 2016, China has escalated military pressure against the island, most notably through a considerable increase in the number of Chinese warplanes entering Taiwan’s air defense identification zone. The Biden administration’s seemingly staunch commitment to deterrence against Beijing can be seen in immediate steps such as ordering the transiting of the Taiwan Strait by American warships at least four separate times following the President’s inauguration, along with maintaining the Trump administration’s policy of terminating self-imposed limits on contacts with Taiwan, inviting the island’s de facto ambassador to the inauguration and issuing a joint statement with G7 partners calling for Taiwan’s participation in the World Health Organization as well as the World Health Assembly.
Moreover, having now assessed that Chinese capabilities have become too significant to stave off a cross-strait invasion, Taiwan has developed what it terms the Overall Defense Concept, which prioritizes the conservation of resources, procurement of asymmetric technologies such as anti-ship cruise missiles and sea mines, as well as engaging in combat near littorals and on its beaches if necessary. Of primary concern for the Biden team is determining how best to integrate into this operational concept.
Finally, Grossman contends that the most prudent approach for the new administration is to reinforce the Overall Defense Concept, most notably through arms sales, due to the fact that it takes the island’s geographical position into account and preserves its conventional arms for that point at which they can be most effective.
Economic Ties and the prospect of a Free Trade Agreement
Building upon the discussion of the current security dynamic, Barbara Weisel noted that despite two-way trade between the U.S. and Taiwan totaling $106 billion the previous year, calls for deepening their economic relationship have seen a marked increase as both seek to reduce their dependence on Chinese markets and diversify their respective trading partners. As the single largest manufacturer of sophisticated semiconductors, Taiwan has taken on an especially critical role for U.S. companies.
Moreover, advocates of a free trade agreement in Taiwan have intensified their calls for negotiations in recent years not only due to heightened regional tensions and a renewed emphasis on diversification, but also a fear of collective economic security agreements such as the recently concluded Regional Comprehensive Economic Partnership (RCEP) and CPTPP Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) failing to adequately take the island’s interests into account.
While Weisel sees a plethora of opportunities for heightened cooperation, she notes three principal factors that make the launching of FTA negotiations unlikely. First, the Biden administration has made it abundantly clear that combating the COVID pandemic, climate change and infrastructure will take precedence over trade agreements. Second, in the event that the administration made the decision to dedicate energy and political capital to negotiations, it is unclear whether it would pursue bilateral agreements, sectoral agreements or a broader regional approach. Finally, the looming expiration of trade promotion authority would require a new authorization or Congressional assent to any agreement in its entirety.
With these hurdles in mind, Weisel asserts that policymakers must instead look to additional areas of potential cooperation through three existing work streams: The Trade and Investment Framework Agreement led by USTR which aids in producing policy alignment in APEC as well as the WTO, the U.S. – Taiwan Economic Prosperity Dialogue led by the State Department, which addresses issue areas such as 5G and telecommunications supply chains, and the Commerce Department’s responsibility for establishing standards.
Broader Foreign Policy Strategy and the Future
In spite of heightened polarization within the U.S. domestic political arena, Robert Sutter asserts that the Biden team has largely continued the previous administration’s weakening of the One China policy in favor of increased support for Taiwan. He identifies three key “drivers” that have contributed to this relative continuity. First, China’s heightened military, diplomatic and economic pressure on Taiwan has prompted a U.S. policy that actively seeks to derail such efforts and preserve the status quo. Second, Taiwan’s strategic geographic position and role within the region, along with its thriving high technology industry, elevates its importance for policymakers seeking to counter China’s increasingly aggressive behavior. Lastly, Taiwan’s liberal political system and economy, along with its support for international norms, are seen by U.S. leaders as powerful tools in their efforts to halt the proliferation of the strain of authoritarianism championed by China.
While this shift in U.S. policy presents the potential for heightened tensions in the diplomatic and security realms, with the latter playing out most clearly in the Taiwan Straits, Sutter presents two principal reasons why the relationship is not likely to deteriorate to the point of armed conflict. First, China has consistently demonstrated a reluctance to confront the United States in ways that would give rise to military force being employed out of a concern for domestic priorities, adverse economic consequences and vulnerabilities along the rim of Asia. Second, China’s ambitions as it relates to internal development require continued economic and high technology interchange with the United States.
Taking these competing factors into account, Sutter argues for continuing to abide by a broad interpretation of the One China policy in order to prevent a potential crisis and allow for a progressive strengthening of the U.S. – Taiwan relationship.
By Ben Briedman, Rising Powers Initiative Research Affiliate, Elliott School of International Affairs.
