Taiwan has been resilient in its efforts to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) after its initial interest to join the Trans-Pacific Partnership (TPP) in 2016.
Throughout TPP’s evolution to CPTPP, Taiwan conducted adequate research on the agreement, its provisions, and held consultations with CPTPP members while utilising opportunities in multilateral spheres.
CPTPP is one of the world’s largest free-trade areas by GDP, with combined economies of approximately US$13.5 trillion.
Member countries include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
Eight countries have ratified the agreement namely; Australia, Canada, Japan, Mexico, New Zealand, Singapore, Peru, and Vietnam.
While the remaining signatories; Brunei, Chile, and Malaysia have yet to formally ratify the agreement.
By joining CPTPP, the Brunei government estimates that the agreement can potentially bring $1 billion to the nation’s economy over the next five to 10 years through increased market access and international joint ventures.
Taiwan’s economy
Senior Assistant Trade Representative and Chief of Staff Office of Trade Negotiations of Executive Yuan, James C.J. Hsiao said Taiwan’s economic development is heavily dependent on trade.
“(Our) participation in bilateral and regional economic integration is crucial for us,” he said during a meeting with media representatives from CPTPP member countries.
He added that Taiwan’s accession to the World Trade Office (WTO) on 1 January 2002 was a significant step in Taiwan’s trade policy history.
Taiwan is currently the seventh-largest economy in Asia, the 22nd largest economy in the world, and one of the four Asian Tigers along with trade powerhouses; Hong Kong, Singapore, and South Korea.
Its economy expanded at an average annual pace of 4.8 per cent over the last three decades.
Furthermore, economic reports state that Taiwan was the only Asian Tiger to record positive GDP growth in 2020; achieving a 3.1 per cent increase – placing it top in the Asia Pacific region.
Despite the pandemic, Taiwan’s annual GDP growth rate in 2021 was approximately 6.57 per cent, exhibiting constant high economic growth as a consequence of successful measures against the spread of the coronavirus.
Asia’s hidden gem has also become an important global supply chain, linking with most CPTPP member countries who are among Taiwan’s top 10 trading partners; Australia, Japan, Malaysia, Singapore, and Vietnam.
Statistics provided by the Office of Trade Negotiations of Executive Yuan show that in 2021, 24.6 per cent of Taiwan’s trade in goods came from CPTPP members, amounting to US$203.4 billion.
Of this amount, US$95 billion were exports equating to 21.3 per cent of Taiwan’s total exports. The remaining US$108.4 billion were imports, amounting to 29.8 per cent of the country’s total imports.
“In terms of investment, by 2021, 30 per cent of Taiwan’s outbound investment destinations were to the current CPTPP members, while inbound Foreign Direct Investments (FDI) from current CPTPP members comprised of 21 per cent of our total FDI,” said Hsiao.
The Senior Assistant Trade Representative and Chief of Staff Office of Trade Negotiations added that the country has complementary industries with many CPTPP members.
“Joining CPTPP can help Taiwan deepen supply chain cooperation, diversify our market and attract investment.”
Taiwan’s domestic efforts
Hsiao outlined Taiwan’s domestic efforts emphasising that by joining the agreement, Taiwan’s various industries; Agriculture, Industry, and Services will benefit greatly and improve the country’s trade performance and position.
In Agriculture, market opportunities for the country’s agricultural products can expand further while attracting investment opportunities.
Sanitary and phytosanitary examinations will be strengthened while import tariffs on raw materials can be reduced – helping the development of the agro-processing industry.
In Industry, Taiwan’s position in the Asia-Pacific supply chain will be strengthened thus improving the manufacturing export performance and domestic production activities.
In Services, service exports have the opportunity to expand as a result of further access to CPTPP member markets.
Assistance from the government
The Taiwanese government has also helped boost their chances of entering the free trade agreement (FTA).
This is through broadening export markets, encouraging companies to increase sales, enhancing import control systems, and supporting businesses in employing redress mechanisms.
Additionally, the Taiwanese government has encouraged the development of six key strategic industries, promoted the 5+2 industrial transformation plan, and established smart manufacturing and machinery.
The six core strategic industries are as follows: digital and information technology industry; cybersecurity industry; medical technology and precision health industry; national defense and strategic industries; green and renewable energy industry and the strategic stockpile industries.
To promote digital transformation and innovation, the development of 5G was accelerated along with Artificial Intelligence (AI), and other technology applications.
This also entailed stakeholder consultations where government agencies of various levels are in constant communication with concerning businesses.
As a result, the business industry acknowledges that Taiwan will benefit from joining the CPTPP.
Legislative amendments
Currently, Taiwan’s laws and regulations are thoroughly in line with the provisions and obligations of the CPTPP.
Through comprehensive examination, the Taiwanese government identified 11 laws to amend in areas relating to the environment, intellectual property rights, pharmaceuticals as well as services.
“Taiwan is committed to aligning our domestic rules with international standards to demonstrate the determination to join the CPTPP such as establishing Maximum Residue Limits (MRL) for pork ractopamine and opening the importation of food from Fukushima, Japan,” said Hsiao.
He further shared that Taiwan requested technical exchanges and informal consultations with CPTPP members to pave the way for the establishment of Taiwan’s Accession Working Group.
“Through bilateral talks with the members in WTO, Asia-Pacific Economic Cooperation (APEC) and other fields, Taiwan intends to gain members’ support for our application to the CPTPP,” he said, adding that immediate establishment of a working group for Taiwan’s accession is crucial.
As he calls for the support of member countries, Hsiao emphasised that their presence in CPTPP will be advantageous to the other members as Taiwan can offer significantly more due to its various successful developments.
Furthermore, trade relationships will be further reinforced between the countries, trade would more inclusive and freer along with the elimination of tariffs, among others.
New Southbound Policy (NSP)
To further advocate their aspirations to join the CPTPP, Hsiao highlighted its core regional strategy for Asia – the NSP – with the core concept of generating Taiwan’s soft power to foster regional prosperity with 18 partner countries including Brunei.
Hsiao said the policy sees the refinement of the country to accelerate its activities while seeking a decrease of dependency on China.
The NSP will allow for the expansion of economic agreements, encourage local small and medium enterprises (SMEs) to explore opportunities overseas, and engage with communities from the 18 target countries while expanding cultural and education exchanges.
Under the NSP, several flagship programmes have been identified including Regional Agricultural Development, Medical and Public Health Cooperation, Industrial Innovation and Cooperation, Industrial Talent Development, and lastly the Yushan Forum: People-to-People.
The policy also has three Prospective Programmes; Cross-border e-Commerce, Public Infrastructure, and Tourism.
Hsiao concluded with hopes that member countries can assist and support Taiwan to join CPTPP, benefitting everyone while moving toward a more transparent and accessible trade.
THE BRUNEIAN
