Unprecedented election results in January have produced unprecedented options for Taiwanese President-elect Tsai Ing-wen in domestic politics, international trade and cross-strait relations with Mainland China.
For the third time, the opposition Democratic Progressive Party (DPP) won the presidency, with Tsai winning 56 percent of the popular vote. The long-ruling nationalist party (Kuomintang or KMT) candidate, Eric Chu, won 31 percent.
But, for the first time, the DPP also won a majority in the legislative branch — the Legislative Yuan (LY), which had continuously been dominated by a KMT majority. While media attention has focused on the presidential contest, the DPP control of the LY will likely have greater impact on both domestic political activities and cross-strait relations with Mainland China.
Since Feb. 1, 2016, the DPP’s 68-seat majority has had control of the 113-seat LY, while the KMT has been reduced to just 35 seats. Under the revised Republic of China (ROC) Constitution, Tsai will not assume office until May 20, when she will replace the current president, Ma Ying-jeou.
In her first remarks in January, Tsai stated: “Our democratic system, national identity and international space must be respected.” This view is supported by her repeated statements during the election campaign that she would maintain the “status quo” of cross-strait relations, rather than overturning the departing Ma’s policies.
This election was not a popular referendum on Taiwanese independence, but rather on growing cross-strait economic integration with the Chinese mainland — integration that could, in the future, lead to political integration. As DPP Secretary-General Joseph Wu has said: “The cross-strait issue was not a salient issue in the campaign and therefore was not the issue defining the election result.”
Even so, in a Feb. 17 statement, DPP spokesman Wang Min-sheng explained that Tsai has clearly said that she would follow the public’s will, abide by democratic principles and insist on safeguarding the Taiwanese people’s options for their future. The DPP statement went on to note that “the DPP will not follow the established approach [of the Ma administration].” Rather, the Taiwan public’s will and democracy should be the new government’s “two pillars” in formulating a cross-strait policy and if the party deviates from these two pillars, it “cannot expect its platform to be stable for very long.”
Earlier in her June 2015 visit to the United States, as well as during the election campaign, Tsai repeatedly stated her support for “maintaining the ‘status quo’” in cross-strait relations — by promoting a cross-strait policy in accordance with the ROC constitutional system and the public’s will. While continuing cross-strait “peace and stability” based on consultations and exchanges over the previous two decades, Tsai has stated that cross-strait relations would be “consistent, predictable and sustainable” after her inauguration.
Working with a DPP majority
Under the ROC constitution, the president is elected for a four-year term and has the power to appoint the government premier and cabinet ministers. Tsai does not need to consider a new cabinet line-up until April, when she can simply call for letters of resignation from all serving ministers — and then appoint (or reappoint) those she wants in her cabinet.
More important, DPP lawmakers have control of the LY for the first time. This has relegated KMT members to a small minority, also for the first time in ROC history.
In addition to the DPP and KMT seats, the new and young-leaning New Power Party has five seats, pushing the People First Party to fourth-party status with three seats. Independents hold two seats.
This party structure will become important for a number of political issues. First, newly elected LY President Su Jia-chyuan (DPP) has already stated there is a series of reforms under consideration for boosting public participation and transparency in the legislature.
Another issue is passing Cross-Strait Agreement Oversight legislation. According to DPP Secretary-General Joseph Wu, the passing of this oversight legislation would be a “top priority” for the DPP-led legislature during its first 100 days. Such legislation was a major demand of Sunflower Movement protesters in 2014, when they occupied the LY to block passage of the controversial Cross-Strait Service Trade Agreement (CSSTA) with Mainland China. The agreement would have opened up the island’s service industries to mainland investment and businesses. The protesters argued that agreements like the CSSTA deal had been done without public oversight or input.
Some political observers have suggested that the DPP legislators, in coalition with the New Power Party (NPP), could achieve the super majority needed to amend existing legislation. But to change the ROC constitution would require a three-fourths LY vote. Taiwan also has a national referendum law (2003) that permits questions of national importance to be put directly to Taiwan citizens — and which has been used in the past.
Internationally, the DPP legislative caucus will need to ensure party solidarity to push through its proposed and future legislative initiatives. One area that is likely to be a minefield is legislation that calls for a declaration of a “Republic of Taiwan.” While ROC-Taiwan conducts all the functions of a sovereign state, there are many in the DPP who want a public “declaration of independence.” While this would be difficult without changes to the ROC constitution, such a declaration would certainly elicit a strong response from Mainland China, which still claims Taiwan as part of its sovereign territory.
Increasing international trade
Taiwan is basically an export economy that has increasingly been integrated into Mainland China’s economy — with an estimated US $1.3 billion in Taiwanese investment in mainland manufacturing and as part of supply-chain exports worldwide. But as China’s economy has slowed down, so has Taiwan’s.
One method for increasing Taiwan’s international market is through membership in international trade and regulatory agreements — or at least by revising Taiwan’s own regulatory and administrative structures to ensure that its exports are not restricted in those markets. The ROC government under Ma eased restrictions on more than 860 laws and regulations to achieve greater trade liberalization — and fast-tracked implementation of the new free economic pilot zones on the island to boost supply-chain exports.
At present, there are three major multi-country trading blocs being formed in the Asia-Pacific Region: the Trans-Pacific Partnership (TPP), the China-led Regional Comprehensive Economic Partnership (RCEP) and the ASEAN Economic Community (AEC). Each of these groupings — with some overlapping country memberships — seeks to enhance regional businesses, trade and economies, though with different degrees of economic integration. To push Taiwan’s inclusion in such trading blocs, Tsai has already announced plans to set up a dedicated cabinet office to handle the island’s international trade negotiations.
The TPP agreement is attempting to harmonize trade-regulatory structures and build a regional digital economy between developed economies on the Pacific Rim, to establish protections for intellectual property rights and ensure new enforceable corporate rights, among others. TPP membership is open to any Asia Pacific Economic Community (APEC) country that is prepared to liberalize its regulatory structures. While Mainland China and Taiwan (as Chinese-Taipei) are APEC members, the Beijing government has shown no interest in joining the TPP. And it would likely block Taiwan from joining — much as it did with World Trade Organization membership when China joined in December 2001 and, in a compromise, Taiwan joined a month later as a “separate customs territory.”
The RCEP is a free-trade agreement currently being negotiated between member Asian economies. It is scheduled for completion by November 2016 and aims to lower tariffs and eliminate non-tariff barriers. Two of the RCEP members — Singapore and New Zealand — are also TPP signatory members and have separately signed free-trade agreements with Taiwan. By negotiating trade regulatory agreements with these two countries, Taiwan is better prepared for future negotiations and for applying for membership in these trading blocs — when and if the opportunity arises. Similarly, Taiwan’s trading agreement with Singapore further harmonizes its trade relations regionally as Singapore is an ASEAN member and a signatory to the 2010 ASEAN-China Free Trade Area agreement.
The AEC is seeking economic integration of ASEAN member countries into a single market and production base to boost its competitiveness in world trade. Building on its free-trade agreement with Singapore, Taiwan will need to increase its economic ties and production links to Singapore and other ASEAN countries to maintain and grow its role as a major supply-chain country for Asia.
The “One China” principle
“Stable and transparent” cross-strait relations between the democratic ROC-Taiwan and the communist People’s Republic of China are complex. The Chinese Communist Party (CCP) government in Beijing claims sovereignty over the island and refuses to renounce the use of force for its claim — even while the mainland and the island are increasingly becoming economically integrated.
Since its creation in 1949, the CCP government has consistently insisted that the “Taiwan issue” is an internal affair under the “One China” principle. Between 2008 and 2016, the KMT-led ROC government under Ma supported the so-called 1992 consensus that accepted that there was one China, with each side of the Taiwan Strait having its own interpretation of the concept. This CCP-KMT rapprochement lowered tensions and set the stage for more than 20 agreements on cross-strait regulatory interactions, trade, air flights and tourism, among others.
Last November, Ma and Chinese President Xi Jin-ping’s historic handshake in Singapore symbolized this lessening of tensions after more than five decades of hostility. For Tsai, it will be important to maintain this reduced level of tension.
But a number of issues will arise in the coming months and years. First, within the DPP party, there will continue to be discourse for a “declaration of independence” for Taiwan. This would likely require a change to the ROC constitution, which states the Mainland and Taiwan belong to One China. And Tsai will have to decide if and when she will make an official policy statement on this issue — bearing in mind that Taiwan exercises sovereign powers over the island and its adjacent areas. She has stated that this issue must take into account the wishes of the Taiwanese people.
Next, with the DPP holding a majority of LY seats, the proposed oversight legislation on cross-strait agreements will likely pass. What is in question is whether such legislative overview will be retroactive to the already signed agreements.
Third, Tsai is likely to reduce Taiwan’s excessive economic dependence on Mainland China through widening its global market and developing new economic partnerships with Pacific Rim countries. But there are already media reports that Taiwanese businesspeople based on the mainland fear economic relations could be harmed under the DPP.
Fourth, how will Beijing react? To date, statements issued by China have implicitly and explicitly said the Taiwan issue is an internal one and warned against calls for independence. In a recent speech in Washington, D.C., Chinese Foreign Minister Wang Yi said China does not care “who is in power in the Taiwan region of China … what we care about is, once someone has come into power, how he or she handles the cross-strait relationship.”
The Beijing government continues to refuse to renounce the use of force towards Taiwan — including an estimated 1,200 short- and medium-range missiles aimed at the island. It also has other means of pressuring Taiwan, such as reducing tourist numbers, restricting investments and holding military exercises near the Taiwan Strait. Chinese media report the number of Chinese tourists permitted to travel to Taiwan will be reduced in the coming months, which is concerning for Taiwan as it’s been a major source of revenue during the current economic downturn.
And finally, Taiwan under Tsai will still rely upon the U.S. for defence support, including the purchase of high-tech weaponry under the 1979 Taiwan Relations Act.
“Peace and stability” in South China Sea
The Taiwanese government and the CCP government hold similar claims to the Spratly Islands and Paracel Islands in the South China Sea — with each thought to have significant undersea resources as well as ocean fisheries. Vietnam, the Philippines, Malaysia and Brunei also have claims on these island chains, through which an estimated US $5 trillion in international ship-borne trade passes every year. While Ma had proposed a joint South China Sea resource development initiative without deciding on the sovereignty issue, Tsai will need to decide whether to pursue this initiative or just maintain control of the islands under the ROC administration. This could become a major international issue during her term of office.
More international space for Taiwan
Taiwan has formal diplomatic relations with only 22 countries worldwide, as a result of the continuing pressure from Mainland China for foreign countries to cut diplomatic ties with Taiwan. But Taiwan continues to work toward full membership — or at least observer status — in intergovernmental organizations, particularly regulatory groups, such as the World Health Organization, the International Civil Aviation Organization, Interpol and others, that don’t require statehood. The incoming government will need support from key governments such as the United States, Britain, Japan, Canada, Australia and the European Union in this quest.
Prospects for Canada-Taiwan relations
This year, China and Taiwan have a number of key issues to pursue in bilateral relations. Wu Rong-chuan — Taipei Economic and Cultural Office Representative in Ottawa — has pointed to priorities in promoting trade and investment, people-to-people exchanges, diaspora re-engagement and continued co-operation between Taiwanese and Canadian NGOs.
Also, it would be advantageous for Taiwan to work toward harmonizing its trade and regulatory structures with those of Canada — and the other TPP signatories — as this would assist democratic Taiwan’s efforts to apply for membership in the TPP in the future. Many of the TPP signatories are Taiwan’s major trading partners, including the United States and Japan, and, like Canada, all have signed the agreement with ratification pending.
For Taiwan, there are a number of issues — domestic, international and cross-strait — that could create a rocky path ahead for Tsai and her DPP government.
Robert D’A. Henderson is a retired professor of international relations who currently does international assessments and international elections monitoring. Among his recent writings is “China — Great Power Rising” in the Routledge Handbook of Diplomacy and Statecraft (London and New York).
