Xi Jinping and the CCP Will Rage, but America and Taiwan Are Preparing a Trade Deal.
As the national congress of the Chinese Communist Party approaches, the CCP is likely to increase the pressure around Taiwan.
As America and Taiwan announced that the two countries were entering into formal trade negotiations, Beijing was quick to react. On Weibo, the Chinese social network, the Chinese Ministry of Commerce stressed that it was “firmly opposed” to such trade negotiations taking place.
Even though the tensions arising from Nancy Pelosi's visit have not subsided, Washington has indicated that the first round of trade negotiations should take place “early this fall.” In a statement, the office of U.S. Trade Representative Sarah Bianchi said it will “develop an ambitious roadmap for negotiations under the U.S.-Taiwan 21st Century Trade Initiative.”
No free trade agreement in sight for now ...
The initiative was unveiled in June 2022, just days after the administration of U.S. President Joe Biden excluded the island from an economic project for Asia designed to counter China's growing influence in the region. And an inaugural meeting was held in late June 2022.
As a result of the U.S. policy of strategic ambiguity, the negotiations will take place under the auspices of the American Institute in Taiwan (Washington's de facto embassy on the island) and the Taipei Economic and Cultural Representative Office in Washington (Tecro).
“We plan to follow an ambitious agenda to conclude high-level commitments and achieve meaningful results covering the eleven trade areas of the negotiating mandate that will help build a more equitable, prosperous, and resilient 21st-century economy,” detailed Sarah Bianchi.
The negotiations will seek agreements in areas such as agriculture, customs procedures, regulation, anti-corruption, and small and medium-sized enterprises. But also the protection of labor and the environment, the rules of digital trade, and the operation of public enterprises.
However, Washington is careful not to suggest that these discussions could lead to the formalization of a broader free trade agreement that includes tariff reductions, which Taipei is eager to see. The two powers are taking direct aim at Beijing with their initiative, which is sure to enrage Xi Jinping and the CCP.
The two powers recall that the United States and Taiwan are both “market economies” and that the upcoming negotiations will also focus on responses to “anti-market policies and methods” pursued by some trading partners in that part of the world.
This formal announcement comes at a time when tensions are still high between Beijing and Washington since Nancy Pelosi's visit to Taiwan. On Wednesday, August 17, 2022, the spokesperson of the Chinese Ministry of Foreign Affairs once again called on the United States to respect the One China principle. The Chinese ambassador to the United States had reaffirmed, a few hours earlier, that the United States was responsible for the tensions in the Taiwan Strait.
For their part, the United States explained on Thursday, August 18, 2022, that they expect Beijing to strengthen its military, economic and diplomatic “coercion” on Taiwan in the “weeks and months” to come. “If our policy hasn't changed, what has changed is Beijing's increasing coercion,” said Daniel Kritenbrink, the State Department's East Asia official.
If America believes China will step up pressure on Taiwan in the coming months, it is also because the Chinese Communist Party's national congress will take place at the end of 2022, and Xi Jinping will have to respond to Chinese ultranationalists who accuse him of being too soft on Taiwan. Xi Jinping thus finds himself caught at his own game, he who has made China's reunification his top priority since coming to power in 2013. He must now meet the expectations raised.
Some reading
The 10 Profiles of Unbearable Colleagues at Work. Any resemblance with existing people would be purely coincidental.
The Paradox of the Unbearable Lightness of Markets — The World Is Bad, but Finance Is Better. The investor prefers to enjoy the summer by putting aside the bad news about the world that is piling up.
Zelenskyy Gamble in Crimea — Everything Is Done to Draw Attention to the Real Start of Putin’s War. The war did not start on February 24, 2022, but on February 27, 2014.
No Internet Connection or Smartphone? You Can Still Use Bitcoin Now (*). (*): Only in Africa for the moment, thanks to the promising Machankura project.