TCSS Security Commentaries #018

Taiwan, as a like-minded partner and a private-sector stronghold in Asia, would at first glance seem like a strong candidate partaking in the Washington-led B3W. Whether this premise holds true will likely hang in the balance of bilateral developments across the Taiwan Strait, if at all.

Richard Chen and Jaime Ocon, Taiwan Center for Security Studies

Just as Taiwan rides a wave of optimism in the fight against the coronavirus, Taipei and Washington seek to expand their ties well beyond that of vaccine diplomacy. While the United States is well on its way to returning to a somewhat state of normalcy with regards to post-pandemic life, Taiwan is meanwhile hopeful that it can do the same in the coming months. Nevertheless through repeated calls for commitment, the United States and Taiwan have made significant strides in their relations, with more still to come as they set to continue their amiability through the revived trade talks between the two.

Both Taipei and Washignton understand the implications that a rising, or better yet already risen, China can have in terms of security and global governance. As political influence stems into economic influence, both sides of the Pacific see the need to enhance the security of their supply chains and bolster economic ties. Taiwan has a gold mine in its semiconductor production capabilities unlike anywhere else in the world, with experts saying competitors will remain behind for at least 6-7 years. As TSMC (Taiwan Semiconductor Manufacturing Corp.) begins breaking ground in Arizona, the United States understands just the seriousness of securing the semiconductor supply chain as to prevent any influence to its domestic and global market.

As President Biden now shifts to revamping discussion under TIFA (Trade and Investment Framework Agreement), Taiwan is ready to strategically position itself in front of China in terms of priority in finalizing a BTA. John Deng, Taiwan’s trade representative, told the Financial Times earlier this week that “We [Taiwan]  want to elevate our trade relationship to the next level of cooperation, a level fit for the future … we would like to talk about supply chains, digital trade and trade facilitation.” Earlier in June when some of the world’s most powerful leaders met at the G7 Summit in Cornwall, the same concern regarding fragile supply chains and cross strait security was also shared.

The underlying rationale for these strategies can be found in the White House’s 100 Day Supply Chain Review Report that came out earlier this June. The B3W specifically was promulgated during the G7 Summit this year to counteract the Beijing-led Belt and Road Initiative (BRI) that has been in place since its adoption in 2013. Despite trends—whether political or external forces—showing that the funding flowing into the BRI has been slowing down (CSIS, Reconnecting Asia Project) the fundamentals of these now competing projects are being put on display for the world to see.

The B3W in its nature is geared towards the “infrastructure needs of low- and medium-income countries”. However, the mobilization of private-sector capital in areas such as: climate, health and security, digital technology, and gender, endeavors G7 nations to coordinate with global partners from a value-oriented, transparent, strategic and sustainable platform.

Thus, as foreign policymaking in Taipei seeks in many ways to board this train of international cooperation restructuring, it looks that initiatives such as the B3W would be a strong candidate for Taiwan’s international involvement, with its insulated nature from Chinese-influence and strong business-backed focus. Ultimately, whether or not private-sector enterprises in Taiwan would see this as an alluring opportunity to fully shift its business model away from across the Taiwan Strait will be determined by the state of Taipei-Beijing relations in the long haul, rather than the one between Taipei and Washington.