US, Taiwan Reach Trade Pact

    US, Taiwan Reach Trade Pact
    Last updated May 19, 2023
    Image credit: Reuters [via CNN]


    • On Thursday, the US and Taiwan agreed to the first stage of a bilateral trade initiative, which was unveiled last June, marking their first official trade deal during the Biden admin., in a move that draws them closer amid mounting pressure from mainland China.[1]
    • The initial agreement of the Initiative on 21st Century Trade covers customs and border procedures, regulatory practices, and small businesses. Negotiations on remaining, more complicated areas — including agriculture, labor and environmental standards, and digital trade — are still in progress.[2]
    • While this trade deal doesn't require approval from Congress, there's broad bipartisan support in Washington for the self-ruling island that Beijing considers a renegade province, long demanding its reunification with the mainland.[3]
    • A spokesman for China's embassy in the US on Thursday accused Washington of substantially elevating its official interactions with the democratic island, as Beijing has long expressed opposition to any US-Taiwan intergovernmental relations.[4]
    • This pact was announced hours after the Chinese embassy in Washington declared that Minister of Commerce Wang Wentao will meet US Commerce Secretary Gina Raimondo and US Trade Representative Katherine Tai next week.[5]
    • This is Taiwan's first official trade agreement since it was excluded from the 14-member Indo-Pacific Economic Framework launched by Biden last year. Meanwhile, its application to join the now 12-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is under consideration.[1]


    Anti-China narrative

    The signing of the trade agreement between the US and Taiwan signals Washington's strong support for the island's democracy, which is an important and strategic trading partner with the US. Beijing will surely complain about this announcement, but its words will fall on deaf ears in Washington as negotiations continue with Taiwan.

    Pro-China narrative

    Under the pretext of trade collaboration, Taiwan is colluding with foreign adversaries, with Washington's deepening ties with Taipei jeopardizing peace and stability in the region. The Chinese government has numerous times warned the US not to encourage the island to try to make its de facto independence permanent, a step that would lead to war. It's time that the US fully respects China's core interests.

    Nerd narrative

    There's a 6% chance that there will be an armed conflict between Taiwan and the People's Republic of China (PRC) before 2024, according to the Metaculus prediction community.

    Establishment split



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