Taiwan politics: DPP takes to the international stage

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Economist Intelligence Unit
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Politics, News Analysis
Political Geography

At the general election on January 16th, Taiwanese voters clearly signalled their dissatisfaction with the foreign policy of the incumbent Kuomintang (KMT) government. The outgoing president, the KMT's Ma Ying-jeou, was twice elected on a platform to bolster Taiwan's economy by improving relations with mainland China, but eventually lost the public's trust on the issue. Tsai Ing-wen of the Democratic Progressive Party (DPP) is now tasked with maintaining the cross-Strait status quo while building international engagement elsewhere to spur economic growth. This will be no mean feat, as China's deep-rooted influence over the island will overshadow all foreign relations.

The thaw in cross-Strait relations under Mr Ma had some successes. Foundations were laid for future deals with China in the form of the Economic Co-operation Framework Agreement and a host of subsequent cross-Strait liberalisation accords. It also served to ease diplomatic pressure from China on the Taiwan-sovereignty issue so that progress could be made elsewhere, including the signing of free-trade agreements (FTAs) with Singapore and New Zealand. After decades of pursuing formal bilateral agreements, these were the first fully fledged FTAs with nations that did not maintain formal diplomatic relations with Taiwan.

Ms Tsai recognises that China's position on Taiwan can exert a strong influence on the island's other international relationships. Consequently, she has no desire to sour cross-Strait relations-in her victory speech following the election, she again reiterated her pledge to "maintain the status quo for peace and stability across the Taiwan Strait". Nevertheless, she will aim to slow the island's still-growing dependence on the mainland by expanding international ties elsewhere. This was made clear during her election campaign trips, in which she indicated the priorities of her international agenda.

Pivoting towards the US

Ms Tsai's first international port of call during her campaign was the US capital, Washington, DC, in June 2015, where she was hosted by White House and State Department representatives. Barack Obama's administration was willing to buck China's opposition to the hosting of Taiwanese politicians, under the assumption that Taiwanese independence would be off the agenda if she were to secure the presidency-her consistent cross-Strait "status quo" stance was already well publicised. Nonetheless, she took the opportunity to reassure senior US officials of this explicitly in order to distance herself from the foreign policy of the previous DPP government of 2000-08. In 2004 the last DPP president, Chen Shui-bian, stoked fears of a de facto independence claim (and therefore conflict with the mainland) with his push to expand national defence measures and revise the constitution. This led the US's then-secretary of state, Colin Powell, to rebuke Mr Chen publicly to reduce the risk of the US being drawn into a conflict in the Taiwan Strait.

Ms Tsai also used the opportunity to indicate to American officials that she would raise defence spending to the equivalent of 3% of GDP (it currently runs at around 2%). This was welcome news, as the US has for several years pressed Taiwan to shoulder more of its defence burden so that it relies less on its key ally as an implicit security guarantor. Currently, Taiwan's defence strategy assumes US intervention if military conflict were to arise, as well as depending on intermittent military hardware purchases, which tend to exacerbate Sino-US tensions.

Domestic barriers remain

The most immediate aim from this careful cultivation of relations was to boost support for Taiwan's inclusion in the Trans-Pacific Partnership (TPP), a US-led trade bloc. As a top trade priority for the Ma administration, the TPP represents an area of continuity between both the incoming and outgoing governments. It offers the promise of greatly expanded export markets beyond the mainland, at a time when shipments to China (including Hong Kong) account for nearly 40% of Taiwan's exports (as of January-November 2015). The fact that the TPP is designed by the US to exclude China also chimes with the DPP's agenda, offering a buffet against further mainland influence.

In spite of the efforts to please the US administration, however, Taiwan's membership of the TPP will remain contingent upon its willingness to liberalise import restrictions on agricultural goods, specifically pork. It remains to be seen whether DPP legislators can be marshalled into reneging on promises to protect these farmers, but this seems unlikely to happen soon if so. It would appear a betrayal of a lobby they have been fervently loyal to in the past and public support for this culturally significant industry would need to be carefully negotiated. However, Ms Tsai has already surprised many by claiming during her campaign that she would refer to the safety standards used by South Korea and Japan for imported pork. Both countries accept pork produced using ractopamine, a controversial feed additive, which is the official reason for Taiwan's ban on imports of American pork.

Reaching out to Japan

Ms Tsai's second pre-election foreign visit was to Japan, a recurring positive focus for the DPP's diplomatic efforts. Japan, like the US, does not formally recognise Taiwan and is unlikely to welcome a visit from Ms Tsai when she is president to avoid diplomatic confrontation with China. Nonetheless, she was still able to cultivate important relationships and make her case for greater co-operation under a DPP government. Accordingly, in her post-election victory speech Ms Tsai praised Japan, in addition to the US, for their support of Taiwan's democracy and emphasised the importance of shared democratic values. Shortly after, she announced that her administration would work towards the signing of a Taiwan-Japan FTA.

Despite Japan's relatively limited importance as a trading partner (it accounted for around 7% of Taiwan's exports in January-November 2015), an FTA would be a diplomatic coup-proof that Taiwan could forge new trade relationships without the acquiescence of China's leaders. The proposal, however, is unlikely to succeed, as Japan will not be willing to jeopardise its relationship with China for the benefit of a less important trade partner. Yet Japan offers another trade opening with brighter prospects: as an important member of the TPP, Japanese support could prove invaluable to Taiwan's bid to join the trade bloc. Owing to the TPP's multilateral framework, support for Taiwan would be a less contentious issue with China than bilateral deals.

Dissent within parliament

In theory, the DPP's solid majority in the Legislative Yuan (Taiwan's parliament) will give Ms Tsai a much stronger hand in furthering her foreign policy agenda. In practice, her own legislative caucus may frustrate this, as it may clash with the party's traditional domestic priorities. DPP legislators, for example, are unlikely to support a 1% increase in the defence budget after winning the parliamentary election on a populist economic platform intended to revitalise economic opportunity at home. Likewise, fervent support for the pork lobby will resurface to create intra-party tensions on the TPP issue.

A DPP-controlled parliament will also be suspicious of the heavy focus on FTAs-much support was garnered through criticising Mr Ma's trade agenda as benefiting only large corporations and the wealthy elite. To mitigate this, Ms Tsai will have to enact and emphasise the greater parliamentary oversight of trade deals that she has promised. Her intention to move past partisan politics and work with opposition politicians may aid her in this regard, but she is likely to discover that her own party is capable of derailing her foreign policy goals, too.

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