US Changes Course on Taiwan in Defiance of Beijing

Keith Krach (L), U.S. undersecretary of state for economic growth, energy and the environment, speaks to Brent Christensen, director of the American Institute in Taiwan, during a funeral ceremony of former Taiwan president Lee Teng-hui at the Aletheia University in Nee Taipei City on Sept. 19, 2020. HSU CHAO-CHANG/POOL/AFP via Getty Images

WASHINGTON—Washington has long been cautious in dealing with the Taiwan issue for fear of provoking the regime in Beijing and heightening tensions. The tone of U.S.–Taiwan relations, however, has dramatically changed under the Trump administration, particularly since a September 2020 visit to Taipei by a senior U.S. official that paved the way for new economic dialogue.

On Jan. 9, the United States lifted restrictions on contact with Taiwanese officials, marking the latest move to deepen ties with the democratic island.

Secretary of State Mike Pompeo announced that he was removing all “self-imposed restrictions” on interactions of diplomats, service members, and other officials with their Taiwanese counterparts. The decision came after a multi-year review of arcane protocols.

Pompeo made the announcement, during the final days of President Donald Trump’s term, saying that the U.S. government will no longer “appease the Communist regime in Beijing.”

The move has angered China since it claims sovereignty over the island. This latest tension will likely be the first major test for President-elect Joe Biden, according to experts, as his approach will determine the fate of the U.S.–China relations under his presidency.

The United States sees Taiwan as a strategic partner in the region and there’s a growing bipartisan push for the establishment of a bilateral free-trade agreement with the self-governed island.

Keith Krach, undersecretary of state for economic growth, energy, and the environment has played a crucial role in the warming of relations with Taipei under the Trump administration.

As a first step toward negotiating a free trade agreement with Taiwan, Krach recommends pursuing the completion of a Trade and Investment Framework Agreement (TIFA), which is a mechanism for resolving bilateral trade issues.

“If the incoming team would like to pursue TIFA, I think the table has been set, especially with the bipartisan support on Capitol Hill,” he told The Epoch Times.

In September last year, Krach led a delegation to Taiwan, becoming the highest-ranking State Department official to visit the island since 1979, when the U.S. government transferred diplomatic recognition to Beijing from Taipei.

His historic visit signaled the continuation of increasing support for Taipei, in defiance of the Chinese Communist Party regime. Krach went there to attend a memorial service for former President Lee Teng-hui, the first democratically elected leader of the island and considered by many as Taiwan’s George Washington.

A visit by such a high-profile U.S. official was a big event in Taiwan.

“When I arrived at the hotel to quarantine, almost every TV station was showing footage of the different chapters of my life, back to when I was 5 years old,” Krach said.

The move, however, drew immediate condemnation from China.

“We were greeted with fighter jets and bombers,” he said.

Beijing conducted military operations near Taiwan to express its frustration. Chinese bomber and fighter jets entered Taiwan’s airspace at least 46 times during the week of Krach’s visit, violating a protocol that neither side would cross the midline of the narrow Taiwan strait.

The United States doesn’t have a formal diplomatic relationship with Taiwan, but maintains unofficial ties with the self-ruled island under the 1979 Taiwan Relations Act.

The act authorizes the United States to provide the island with military equipment for its self-defense, and set up a nonprofit corporation called the American Institute in Taiwan (AIT), which is the de facto U.S. embassy on the island.

The U.S. delegation to Taipei led by Krach also conducted economic dialogue and collaboration on a wide range of areas, including secure technology, economic empowerment of women, education, entrepreneurship, healthcare, energy, infrastructure, and global supply chain realignment.

U.S. Undersecretary for Economic Affairs Keith Krach, Taiwan President Tsai Ing-wen, and Taiwan Semiconductor Manufacturing Co. (TSMC) founder Morris Chang attend a banquet for the U.S. delegation in Taipei, Taiwan on Sept. 18, 2020. Courtesy of Keith Krach

Krach’s visit came after U.S. Health and Human Services Secretary Alex Azar visited the island in August to sign a cooperation agreement on disease control and drug development.

During his three-day visit, Krach also set the goal of signing an Economic Prosperity Partnership (EPP) named after President Lee before Thanksgiving and signing a Science and Technology Cooperation Agreement before Christmas.

As planned, both parties signed a memorandum of understanding for the EPP in Washington on Nov. 20. They also signed in December the U.S.–Taiwan Science and Technology Cooperation Agreement to bolster their commitment to transparency, intellectual property, research integrity, and human rights.

Strong Momentum for a Trade Agreement

About half of the U.S. Senate believes that it’s the right time to begin trade talks with Taipei. In October last year, 50 senators sent a joint letter to U.S. Trade Representative Bob Lighthizer, urging him to start “the formal process of negotiating a comprehensive trade agreement.”

Under Trump’s presidency, Washington significantly expanded military aid to Taiwan as well.

Taiwanese officials are now hoping the incoming Biden administration will follow Trump’s lead.

Taiwan plays a key role in the critical supply chains that the coronavirus pandemic has exposed last year. The island is also a crucial hub for the global semiconductor supply chain.

In May last year, Taiwan Semiconductor Manufacturing Co. (TSMC) announced that it would build the world’s most advanced 5-nanometer chip fabrication facility in Arizona, an important milestone for building a safe 5G network for the United States and its partners.

TSMC recently acquired land in north Phoenix to build its $12 billion factory and is planning to hire more than 1,600 workers when the plant is fully operational.

The deal with TSMC “has the potential to fundamentally reorient Taiwan’s high-tech supply chain away from China and toward the United States,” according to a State Department official familiar with the deal.

Last year, the State Department launched a campaign called “Clean Network” to boot Huawei and other Chinese companies from critical telecommunications infrastructure around the world. The TSMC deal is an important component of the initiative as it will help bring semiconductor production vital to national security back to the United States, according to Krach.

More than 50 countries, including Taiwan, have joined the Clean Network as of December and more countries and telecom operators are expected to join the alliance.

Biden’s Approach to Taiwan

The ongoing U.S.–China trade dispute will be a central issue for the new administration. And Beijing is anxious to see how Biden will approach the outgoing administration’s decision about the lifting of the restrictions on contact with Taiwanese officials.

China’s state-run media Global Times, in recent editorials, slammed the announcement as the Trump administration’s “last-ditch madness.” However, Beijing is unlikely to make any move to upset relations with the new administration before Biden takes office.

As part of the efforts to help Biden’s transition team, the Trump administration suddenly canceled all planned travel this week, including a trip by Kelly Craft, the U.S. ambassador to the United Nations, to Taiwan. Craft had been scheduled to begin her three-day trip on Jan. 13 and was to meet the island’s president Tsai Ing-wen.

It is still unclear whether the new administration will unwind Trump’s policies on Taiwan and pay a domestic political cost for making concessions to the Chinese Communist Party regime.

Rupert Hammond-Chambers, president of the U.S.–Taiwan Business Council, said that this would be an early test of Biden’s attitude toward Taiwan.

“This approach of self-censorship in U.S.–Taiwan relations under Presidents Barack Obama and George W. Bush caused considerable problems for U.S.–Taiwan ties and created further imbalances in cross-strait tensions as the PRC became further emboldened,” Hammond-Chambers told The Epoch Times.

He believes the Chinese regime “is likely to demand the United States reverse some or all of the gains made in American national interest with Taiwan” during the Trump administration.

“As Mr. Biden has declared there’ll be no new trade agreements for the foreseeable future, the best we can hope for is a resumption of the TIFA [talks], not held since 2015,” Hammond-Chambers said.

According to him, while it’s hard to conceive of the Biden administration pursuing a trade agreement with Taiwan, it is still possible for his team to explore and possibly implant “smaller agreements including on investment and taxation, which the U.S. business community supports.”

An official with Biden’s transition team told reporters this week that Biden would continue to support “a peaceful resolution of cross-strait issues consistent with the wishes and best interests of the people of Taiwan.”

Cathy He and Alice Sun contributed to this report.