Taiwan's challenge if US President-elect Trump withdraws from TPP: The China Post

Taiwan's representative James Soong (centre) arriving at Lima's international airport ahead of the Asia-Pacific Economic Cooperation Summit.
Taiwan's representative James Soong (centre) arriving at Lima's international airport ahead of the Asia-Pacific Economic Cooperation Summit.PHOTO: AFP

In its editorial on Nov 18, the paper says the region might look towards the China-led Regional Comprehensive Economic Partnership if TPP is sunk, but that may prove perilous for Taiwan.

This weekend, Taiwan's envoy to APEC James Soong will meet world leaders to discuss regional economic cooperation.

Following Donald Trump's unexpected election victory, the summit of regional leaders will be scrutinised for any inkling on how US foreign trade policy may change over the next four years.

But thinking beyond the dominant neoliberal paradigm, Taiwan should note the recent public backlash against trade liberalisation, and consider playing an alternative role in the regional economy.

Already last week, signs pointed to the death knell of the Trans-Pacific Partnership (TPP), an ambitious yet controversial free-trade agreement that both major parties in Taiwan have supported without reservation.

While it remains to be seen how Trump will act on free-trade pacts overall, the president-elect has given an indication of his policy direction by promising to either renegotiate or withdraw from the North American Free-Trade Agreement.

Should the TPP be sunk, the Asia-Pacific may well look to the Chinese-led Regional Comprehensive Economic Partnership (RCEP) as an alternative.

A shift in the balance of power from the U.S. to China may prove perilous for Taiwan, as it has hedged its bets on joining the US-led TPP.

Cooling cross-strait relations make Taiwan's acceptance into RCEP highly unlikely and, as per the rationale of neoliberal economics, one simply cannot afford to be left out when it comes free-trade agreements.

So, despite having told the press last week that much his focus as envoy would be on expanding the reach of domestic small and medium-sized enterprises (SMEs), it is likely Soong will also be probing for any changes in U.S. regional orientations in the Asia-Pacific, given the geopolitical implications for Taiwan.

Before leaving for Peru, Soong downplayed any potential interactions with mainland Chinese leader Xi Jinping and his delegation. Beijing's continuing efforts to isolate Taiwan on the world stage, including the RCEP, will be reflected its interactions - if any - with the People First Party chairman.

But this uncertainty also gives policy makers in Taipei an opportunity to re-evaluate existing trade policies and the unquestioned rush to put Taiwan's competitiveness to the test through unfettered market access.

Indeed, as Soong himself stated last week, pursuits of wealth need to be balanced with equal distribution.

Drawing an astute parallel between Brexit and Trump's victory, Soong reminded us that growing social inequality and the rise of the urban-rural divide were behind these unexpected political upheavals.

But fairer distribution is not enough if politicians from around the world want to keep their societies harmonious and resistant to the demagoguery of bigotry.

For years, the economics of free-trade have devastated once productive manufacturing cities from Detroit to Kaohsiung.

We are told endlessly that free-trade agreements drive economic growth by providing cheaper goods to companies and consumers alike.

But the extraction of productive labour and the imperative of keeping costs to an absolute minimum has also drained communities of the social cohesiveness and common bonds of humanity that once held them together.

While it is heartening that Taiwan's government is willing to share the experience of development and help developing economies, it remains to be seen whether such exchanges are just as profitable to local communities as they are to Taiwanese investors.

If not, Taiwan's apparent benevolence may well be nothing more than a softer form of predation that confines these economies and their societies to an inferior development path.

Taiwan, sometimes an orphan on the international stage, could overcome its isolation by cultivating an economic alternative to cut throat trade liberalisation.

Cooperating with like-minded countries to revive long-stalled World Trade Organisation negotiations and level the playing field for developing economies would be a start.

This would ensure that global development begins to shift toward a fairer system of distribution while also halting the unchecked extraction of humanity by transnational capital.

* The China Post is a member of The Straits Times media partner Asia News Network, an alliance of 21 news media.