On October 12, the Trade Subcommittee of the Australian Parliament's Joint Standing Committee on Foreign Affairs, Defence and Trade heard testimony from Elliott Charng of the Taipei Economic and Cultural Office in Australia as part of its inquiry on "Expanding Membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership." The Taipei Economic and Cultural Office (TECO) in Australia was set up in 1992 "as the highest representative office of the Government of Taiwan, ROC in Australia."
The questions and answers at the hearing dealt with a number of issues, several of them relating to the Australia-Taiwan trade relationship or to specific issues such as state-owned enterprises. In this piece, we highlight two issues: Taiwan's readiness to join the CPTPP, and China's CPTPP application. The full text of these exchanges is at the end of this post.
Beginning with Taiwan's readiness, Senator Sheldon asked about "legislation [that has] been put forward to create an easier pathway to alignment with the CPTPP." In response, Mr. Charng said that "[o]ur government has completed examination and ensured the compliance of our regulatory regime with respect to the CPTPP disciplines, chapter by chapter." For 13 regulations that require amendments, "[s]ince 2016, the amendment process ... has already been completed for nine of them," and "[t]he remaining four proposed amendments will be completed soon." They have also completed over 350 domestic outreach events.
With regard to China, Chair Ted O'Brien asked, "is Taiwan expecting that the PRC might frustrate its efforts to join the CPTPP, and how will Taiwan respond to and view that? Secondly, how does Taiwan feel about the PRC's request to themselves join the CPTPP?" Mr. Charng responded by saying that "[w]e all understand that China use[s] every way to obstruct Taiwan from participating in any international organisations"; and he noted that "for any applicant that wants to join the CPTPP, it all depends on whether this applicant would meet the commitment and implement the rules."
Mr. Drum then asked, "how important would this accession into the CPTPP be to your relationship to China and your standing within China?" Mr. Charng replied in part, "[i]f Taiwan were to become a member of the CPTPP, from an economic perspective, I don't think it would be a bad thing to China." Mr. Drum also asked, "if China were forced—and accepted it—to abide by these stronger rules, that would be a good thing. Do you agree with that?" Mr Charng replied that "[e]veryone following the rules will be good not only for business but also for customers."
Partial transcript of session:
Senator SHELDON: ... One of the critical questions is the preparedness of Taiwan for the CPTPP. Has legislation been put forward to create an easier pathway to alignment with the CPTPP? There's no need to go through each and every one, but is there a piece of legislation that you would like to speak to by way of an example of how Taiwan is seeking to align to the CPTPP?
Mr Charng : Taiwan has been preparing to join this agreement for quite a long time. Since 2016 my government has had increased coordination among government agencies. For example, we decided on a minister to oversee the cross-agency work for the joint CPTPP. We've also set up an office of trade negotiation, a cabinet level office to coordinate with other agencies regarding our negotiating positions.
The second step is the release of the initial CPTPP text. Our government has completed examination and ensured the compliance of our regulatory regime with respect to the CPTPP disciplines, chapter by chapter. We call that 'gap analysis'. If I remember correctly, 13 regulations were identified as having gaps. Since 2016, the amendment process, in line with the CPTPP regulations, has already been completed for nine of them. The remaining four proposed amendments will be completed soon. I can give you one or two examples. On transparency, we encouraged government agencies to improve English on their official websites. In financial services, we simplified the procedures for establishing an offshore unit to offer national insurance. We are relaxing the requirements for the movement of foreign officials through 27 reform initiatives with respect to visas, employment, residence, finance access and insurance.
We also have impact assessment and domestic outreach. We not only process amendments to our law and regulations; we also outreach to our people. For example, we have already completed over 350 outreach events. Before I came to Australia to take this post, I was involved in two or three outreach events. I had the chance to go to universities and associations and unions. So I think Taiwan has done its best to prepare for our participation in the CPTPP.
CHAIR (Ted O'Brien): Thank you. Let me ask you a general question I've asked many people who have come before the committee. If you were us, how would you assess different potential members from Australia's perspective? The terms of reference of this inquiry go to which potential members it would be in Australia's interest to have join the CPTPP. As you can imagine, there are lots of different ways we can assess the merits of different potential economies joining. Do you have a view as to how the committee might consider Taiwan's merits, as well as the merits of other economies wishing to accede?
Mr Charng : The only answer I can give you is that Taiwan should be your first choice to support! So far, the talk about Taiwan is all positive. So I believe Taiwan should be your first priority.
CHAIR: I will move to a topic which is often a sensitive one, Mr Charng, and that is the People's Republic of China. We know that the PRC has also recently formalised its request to accede to the CPTPP. This committee has heard evidence from different groups who are very supportive of Taiwan joining the CPTPP but have also expressed concerns that the People's Republic of China might seek to frustrate or block Taiwan's bid. For me, this gives rise to two questions. Firstly, is Taiwan expecting that the PRC might frustrate its efforts to join the CPTPP, and how will Taiwan respond to and view that? Secondly, how does Taiwan feel about the PRC's request to themselves join the CPTPP?
Mr Charng : I'll respond to the first question first. The opposition from China is not unexpected to us. We all understand that China use every way to obstruct Taiwan from participating in any international organisations. So the response from China is not unexpected.
On the second question, I will quote your trade minister. He has remarked:
All parties will want to be confident that any new member will meet, implement and adhere to the high standards of the agreement as well as to their WTO commitments and their existing trade agreements. It's in everyone's interests that everyone plays by the rules.
That means that, for any applicant that wants to join the CPTPP, it all depends on whether this applicant would meet the commitment and implement the rules. Since Taiwan announced it wishes to join the CPTPP, we have already received a lot of support from international friends. Only one voice on the other side is a negative. There is a lot of support for Taiwan to be a part of this big family.
Also, our government already had an announcement about two weeks ago regarding our position. We just want to contribute to the international organisation and we want to market to each of the members of the CPTPP. I think that Taiwan's participation in the CPTPP will benefit not only the members of the CPTPP but also the global region.
Mr DRUM: I want to get your views on your relationship with China. Irrespective of the benefits to your country as a trading nation, and benefits to us as a trading nation, how important would this accession into the CPTPP be to your relationship to China and your standing within China? If you were to be accepted, would that make a significant difference to your standing with China?
Mr Charng : I think we are well qualified to be part of this economic trading bloc. China is Taiwan's No. 1 trading partner. Also, between Taiwan and China, we have a framework agreement, which we call the economic comprehensive framework agreement. It's also under the structure of the WTO. If Taiwan were to become a member of the CPTPP, from an economic perspective, I don't think it would be a bad thing to China. We'd just follow CPTPP rules and regulations. We'd also commit to our obligations. I think this is not a bad thing to everyone.
Mr DRUM: It has been put to the committee that the structure, the rules and the regulations surrounding the CPTPP are significantly stronger and more enhanced than many other trading agreements and that, if China were forced—and accepted it—to abide by these stronger rules, that would be a good thing. Do you agree with that?
Mr Charng : Yes. I think doing business is important. Business needs the economic situation to be predictable. Everyone following the rules will be good not only for business but also for customers.
Mr DRUM: Undoubtedly. But, unfortunately, we keep hearing that our friends in the north sometimes don't like to follow the rules. We are therefore attracted by an agreement that has stronger and more enhanced trading arrangements. I was just interested in your view on that.