US, Taiwan launch trade talks in challenge to China

WASHINGTON: The United States and Taiwan launched talks on Wednesday (Jun 1) aimed at deepening their trade ties, in a clear challenge to Beijing.

The process, labeled the US-Taiwan Initiative on 21st-Century Trade, follows an agreement President Joe Biden announced last week with 12 Asian economies, which excluded Taiwan.

Like that effort, the discussions with Taiwan will not involve tariffs or market access – items that would require congressional approval, officials said.

“Both sides will work at pace … to develop an ambitious roadmap for negotiations for reaching agreements with high-standard commitments and economically meaningful outcomes,” the US Trade Representative said in a statement.

Despite the limited scope of the talks, which a senior administration official said was in keeping with the “unofficial” relationship with Taipei, they are likely to anger Beijing which bristles at any sign Washington is treating the self-governing democracy as an independent nation.

China claims sovereignty over Taiwan and opposes its participation in international fora including a Pacific trade pact.

Beijing has engaged in frequent saber rattling to show its displeasure: China on Monday made the second largest incursion into Taiwan’s air defense zone this year with Taipei reporting 30 jets entering the area, including more than 20 fighters.

US Secretary of State Antony Blinken accused China of “increasingly provocative rhetoric and activity”.

Biden also is under pressure to deepen ties with the island after a bipartisan group of 52 senators urged him to include Taiwan in the Indo-Pacific Economic Framework (IPEF) launched last week, which includes about 40 per cent of the global economy.

They argued in a letter to Biden that leaving an important trading partner out would “allow the Chinese government to claim that the international community does not in fact support meaningful engagement with Taiwan”.

“ROBUST” RELATIONSHIP

A senior official said there is still time to add Taiwan to that effort.

“We didn’t include Taiwan in the initial launch. However, going forward, we intend to take a flexible and adaptable approach to IPEF participation,” the official told reporters.

The official reiterated Washington’s “long-standing one China policy”, but said the Biden administration also maintains a “robust unofficial relationship with Taiwan and … is committed to deepening it”.

Deputy USTR Sarah Bianchi and Taiwan’s lead trade negotiator John Deng met on Wednesday to launch the new initiative, which the trade agency said “is intended to develop concrete ways to deepen the economic and trade relationship, advance mutual trade priorities based on shared values, and promote innovation and inclusive economic growth for our workers and businesses”.

The first meeting under the initiative will be held in Washington later in June, and will cover customs procedures and regulations, including rules governing agriculture trade, worker rights and the fight against “harmful non-market policies” – a clear reference to China.

Another administration official said the goal is to produce a “high framework, binding agreement”, but gave no timeframe for reaching a deal.

Taiwan is the 10th largest export market for the United States as well as a vital source of semiconductors which are seeing a global shortage, hitting industries that rely on them from autos to smartphones and pushing inflation higher.

The US Commerce Department has launched a separate dialogue with Taipei on technology and investment – two other areas covered by IPEF.

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