Taiwan's election was important, but not a game changer

by Hugh Stephens

Embassy
February 1, 2016

Since the landslide election of Tsai Ing-wen of the Democratic Progressive Party as president of Taiwan on Jan. 16, and the concurrent sweep of the legislature by the DPP to win 68 of 113 seats, there has been much coverage and commentary on the vibrancy of Taiwan’s democracy, the possible reaction of Beijing, and the implications for Canadian policy.

Commentaries asking whether the Trudeau government will “stand with Taiwan or China,” or “choose Chinese trade over Taiwan’s freedom” have suggested that the Liberal government now has to make a choice, siding with values or economic development. It is a false dichotomy.

There have even been suggestions that Canada should reconsider its unofficial relations with Taiwan and upgrade the status of its non-diplomatic presence on the island state, the Canadian Trade Office in Taipei.

It is hard to know whether to take such suggestions seriously, but it is worth reflecting on how reaction by Canada—or other countries maintaining diplomatic relations with China but unofficial relations with Taiwan—need to be carefully calibrated.

Nothing would damage Taiwan’s interests more than ill-considered moves that would destabilize the careful and cautious relationship that China and Taiwan have been able to forge over the past eight years, under the administration of outgoing KMT President Ma Ying-jeou.

China and Taiwan have over 20 bilateral understandings, covering everything from direct flights between Taiwan and the mainland, movement of tourists, student exchanges, taxation, economic partnerships and many others.

There was even a ground-breaking "unofficial" meeting between Ma and Chinese President Xi Jinping in Singapore in November 2015, the first such meeting since 1945.

This dialogue and the bilateral understandings were developed on the basis of the acceptance by both sides of the so-called 1992 Consensus, whereby both China and Taiwan acknowledged there is “one China,” but with different definitions.

The acceptance of this fundamental principle lays the foundation for eventual reunification, at some indeterminate point in the future and in some undefined way. In the meantime, while cross-strait relations improve, the political status quo prevails. 

The DPP has always been reluctant to accept the one-China principle, since its electoral support comes more from those who identify with Taiwanese nationalism, and who see Taiwan as an independent state separate from China (the de facto situation today).

A previous DPP resident, Chen Shui-bian, who was president from 2000 to 2008, was mistrusted by China. At the time, the legislature was still dominated by the KMT so there was a brake on Chen’s influence, and when the KMT returned to power on the basis of a platform that included opening up ties with China, the prospects for cross-strait relations seemed to improve.

In 2012 when she first ran against Ma, Tsai’s ambiguous position on relations with China was a big factor in costing her the election. 

This time around, she has been more careful, sending reassuring messages that she does not want to disrupt the status quo in terms of relations with Beijing. A possible way forward may be a statement by the DPP as to the “non-deniability” of the one-China principle. In other words, the DPP would neither accept nor deny the premise of one-China. 

This is a position remarkably similar to the so-called Canadian formula that allowed Canada and China to bridge the gap on Taiwan in order to come to an agreement on the establishment of diplomatic relations in 1970. Under that formula, Beijing stated its position that Taiwan was an inalienable part of China, and Canada “took note of” that position. 

Any move by a third party to intrude into this delicate calculus by appearing to change the status quo in terms of its relations with Taiwan carries high risks for the security of the region, not to mention the obvious negative impact on that country’s relations with China.

Maintaining and improving relations with China is important not just for obvious economic reasons, but also for a range of motives including impact on regional security and development, shaping global governance, promotion of values and so forth, none of which is inimical to Taiwan’s interests.

Indeed, a proposed bilateral trade agreement between Canada and China would actually open the door to a bilateral agreement between Canada and Taiwan (Canada’s fourth-largest export market in Asia).

The only two countries that to date have reached bilateral trade agreements with Taiwan (New Zealand and Singapore) have, not coincidentally, also reached bilateral agreements with China, and did so prior to completing their negotiations with Taiwan.

While Taiwan is a separate member of the WTO from China, the acceptable formula that was reached when both economies acceded to the organization in 2001 was that they did so at the same time.

Taiwan has also expressed interest in future membership in the TPP (assuming it is ratified), and there is also some interest on the part of China. Nothing in the TPP disqualifies either economy from joining the trade agreement at a later date, and while it can be argued that earlier Taiwanese entry to the TPP could be in China’s interest, the most likely scenario is that both would need to join simultaneously.

Canada, and many other countries that maintain diplomatic relations with China, have been able to develop stronger relations with Taiwan on the basis of a pragmatic and realistic appreciation of cross-strait realities.

Canada enjoys direct air links with Taiwan, Taiwanese visitors enjoy visa-free access to Canada (unlike PRC passport holders), Canada and Taiwan have just reached an Avoidance of Double Taxation Arrangement, etc.

Dialogue is maintained through unofficial channels, the Canadian Trade Office in Taipei and the Taipei Economic and Cultural Office in Canada. Canada supports and appreciates the development of Taiwan’s democratic institutions, but Tsai Ing-wen’s election, while significant, is not a game changer.

In fact, it was the third time there has been a peaceful transition of power in Taiwan from one party to the other. Ma Ying-jeou’s KMT wins in 2008 and 2012 were no less democratic than Tsai’s 2016 victory. Canada did not need to take sides between China and Taiwan then; it does not need to do so now. It is not a zero-sum game. 

How China will react to Tsai’s incoming presidency (she will be sworn in on May 20) remains to be seen. Reaction will likely be cautious, with mutual sounding-out of the formula that will be needed to keep cross-strait relations on an even keel.

There is the risk of over-reaction by either side. The best thing that Canada can do is to continue to develop its relations with Taiwan on the current non-official basis, adhering to formulas that have served all parties well in the past, while pushing forward to strengthen the Canada-China relationship for both economic and strategic reasons. 

Hugh Stephens is a senior fellow at the Asia Pacific Foundation of Canada, and a fellow at the Canadian Global Affairs Institute. He is a former (1995-98) director of the Canadian Trade Office in Taipei.