Following the U.S. withdrawal from the embryonic Trans-Pacific Partnership (TPP) soon after Donald Trump’s inauguration as President, the other 11 TPP countries decided to maintain the multilateral trade agreement under the revised name of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).
As a major trading economy, Taiwan hopes to be able to join the CPTPP when the pact is formally established and opens membership to more countries in a second round. Currently the CPTPP signatories are still in the process of seeking ratification from their various parliaments.
Da-Nien Liu, research fellow at the Regional Development Study Center of the Chung-Hua Institution for Economic Research (CIER) and an expert on regional trade agreements, shared his insights on “The CPTPP: The Challenges for Taiwan” with AmCham Taipei members and guests on May 24 at the Chamber’s Lincoln Room. Liu is also a former Deputy Secretary General of the National Security Council during the Ma Ying-jeou administration.
Liu noted that Taiwan will feel an economic impact from CPTPP whether or not it is able to participate in the agreement. If allowed to secure membership, Taiwan will need to liberalize its import regime, which would likely affect the domestic agricultural sector and certain industries. If Taiwan is excluded from CPTPP, the impact would be even greater, affecting the country’s markets in such sectors as plastics, iron and steel (and their products), electrochemical equipment, and auto parts.
The “China Factor” will be a major challenge for Taiwan, Liu said, as Beijing may try to pressure CPTPP members not to admit Taiwan or to block Taiwan’s accession until after China joins the group. Another prospective challenge might be the “down-payment” problem, as CPTPP member countries would likely expect Taiwan to resolve any outstanding trade disputes with them during bilateral talks preceding Taiwan’s entry into the agreement.
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