Foreign Policy Research Institute A Nation Must Think Before it Acts Taiwan, Pivoting Allies, and American Interests Abroad
Taiwan, Pivoting Allies, and American Interests Abroad

Taiwan, Pivoting Allies, and American Interests Abroad

It seems like nearly every week there is something in the news about how the People’s Republic of China (PRC) is squeezing the Republic of China (ROC, Taiwan) diplomatically, economically, politically, or militarily. Earlier in the summer, the Chinese Communist Party (CCP) demanded that airlines and other private companies like Marriott International label Taiwan as a part of China, not as a separate country. In response, White House Spokesperson Sarah Huckabee Sanders, who works for an administration that has its own problems with the truth, ironically accused the CCP of “Orwellian nonsense” and imposing “its political views on American citizens and private companies.” Most recently, on August 21, President of Taiwan Tsai Ing-wen announced that Taiwan had severed ties with the Central American country of El Salvador.

According to Joseph Wu, Taiwan’s Foreign Minister, the government of El Salvador wanted Taiwan to invest in the “Port of La Union development project” and to fund the ruling party’s campaign for upcoming elections in 2019. The Taiwanese government did not view the port project as viable and would not fund the ruling party’s campaign because “such a request runs counter to the democratic principles we uphold, and we certainly could not agree.” After trying to persuade El Salvador not to switch recognition—China reportedly had been courting the country heavily since June 2018—Taiwan preempted the move by severing ties in response to what amounts to economic blackmail. Taiwan will remove all of diplomatic staff and cease all aid payments to the country.

The government of El Salvador, led by President Salvador Sanchez Ceren, has denied these accusations. Instead, his administration announced, “We cannot turn our back on the world, ignore that China is the second largest power in the world and the leading export economy on the planet.” Perhaps, Ceren is hoping that China will do what Tsai’s government refused to do: invest in a bad infrastructure project and prop up his struggling campaign. The opposition party in El Salvador was reportedly against the change in recognition.

Not an Isolated Incident

Since 2016—when Tsai took office—Taiwan’s list of official diplomatic allies has grown shorter. Only 17 countries now have official diplomatic relations with Taiwan, but many countries across the world like the United States and Japan have informal, or unofficial, diplomatic relations with it.

El Salvador joins Panama, Burkina Faso, the Dominican Republic, and Sao Tome and Principe in breaking with Taiwan and establishing ties with the PRC. Each one switched due to the expected economic boon of Chinese investment and a change in political signals from China that it gone from accepting a “diplomatic truce” to trying to squeeze Taiwan with an “anaconda strategy.”

The Gambia had severed ties with Taiwan in 2013, but did not establish relations with the PRC until 2016—after Tsai was elected, but before her inauguration. The delay can be credited in large part due to the so-called “diplomatic truce” established under the administration former President Ma Ying-jeou. The “diplomatic truce” was a tacit agreement whereby neither Taiwan nor China would poach the other’s allies. With the election of Tsai and her Democratic Progressive Party in January 2016, the CCP unilaterally ended the truce by re-establishing ties with the Gambia.

Since then, the PRC has actively worked at poaching Taiwan’s remaining allies. The CCP has been attempting to court the Vatican, Taiwan’s only remaining European ally, since late 2017. The news of the prospective deal that would welcome excommunicated Chinese priests back into the Church as bishops—at the expense of faithful bishops—caused much controversy earlier in the year. The international uproar is likely why no formal deal has been struck yet between the PRC and the Holy See, but receiving legitimacy through a deal with the Pope is still on President Xi Jinping’s radar.

Taiwan’s last remaining African ally, the Kingdom of eSwatini, formally known as Swaziland, issued a statement in support of Taiwan after the PRC said it expected the nation to switch recognition soon. Mgwagwa Gamedze, the Kingdom’s foreign minister who is currently visiting Taiwan, said, “[China] must not play mind games because our relationship with Taiwan is over 50 years so we will not dump them. . . . We have no desire to change camps since Taiwan has been good to us.”

And the United States has stood firm in its support of Taiwan despite Chinese aggression. The United States recently finished construction on a new state-of-the-art facility to house the American Institute in Taiwan, the organization that handles American diplomatic efforts in Taiwan, and Congress has also shown its support for Taiwan by allowing for reciprocal port calls for the two countries’ navies in the 2018 Defense Authorization Act and by passing the Taiwan Travel Act, which allows for high-level Taiwanese officials to travel to the U.S. and for high-level American officials to travel to Taiwan.

The Value of Taiwan’s Allies

Since Taiwan has lost a number of allies recently, the question of the value of these countries comes to mind. What does Taiwan gain from having so few allies from these countries that have little economic or strategic value? Citizens and lawmakers in Taiwan have asked themselves this very question whenever a country switches over to China. Some see losing these allies as a benefit because Taiwan would save money that could be spent domestically.

It is very likely that another of Taiwan’s allies will switch in the near future. Other countries in the Latin American region could easily be swayed by the PRC’s economic might and massive investment opportunities. How long can Belize, Guatemala, Honduras, Nicaragua, and Haiti, among others, hold out?

Tsai herself has said that Taiwan will no longer engage in “dollar diplomacy,” or the writing of large aid or investment checks to keep countries from switching to China. With the recent El Salvador move, Foreign Minister Wu tweeted, “Taiwan will not engage in dollar nor debt-trap diplomacy. This is why El Salvador’s repeated requests for assistance with an unfeasible port development were declined.” Debt-trap diplomacy refers to a relatively new Chinese practice where China provides predatory loans to developing nations and when they cannot pay the money back, China accepts strategic assets or access to natural resources as a form of compensation.

What will happen when another one of Taiwan’s allies makes either an unreasonable demand or Taiwan refuses to invest in a development project?

In terms of trade, Taiwan does not receive much economic benefit in the aggregate from its allies. According to Taiwan’s Bureau of Trade, for January to June 2018, the total trade conducted between Taiwan and its 17 remaining allies totaled $340,979,006. That number is less than the total trade between Taiwan and Papua New Guinea ($351,050,385) for the same timeframe. For comparison, U.S.-Taiwan trade amounts to $34,806,928,808, and China-Taiwan trade amounts to $72,593,413,815. Economically, Taiwan receives more from its adversary, unofficial allies, and countries without any formal or informal relationship.

What these allies lack in economic benefits, they make up for in providing Taiwan a form of international legitimacy. There is something to be said about having formal diplomatic allies. And the question must be asked: is a country really country if no one else recognizes it as one? For a reference point, the Democratic People’s Republic of Korea only has one formal ally: China. Having these countries as allies allows for the president of Taiwan to make official state visits. Tsai recently completed such a trip to Belize and Paraguay. And making these trips has the added benefit of “stopover” visits to the United States. Every time that Tsai has a planned stopover visit, the CCP lodges complaints against her trip, which offers U.S. officials an easy opportunity to demonstrate their support for Taiwan by speaking out against Chinese pressure on Taiwan.

During her most recent stopover in Houston, Tsai visited NASA, the first time that a leader of Taiwan visited a U.S. federal building since the U.S. severed its formal relations with Taiwan under President Jimmy Carter. In a move that has angered China even more than simply travelling through the U.S., Tsai toured facilities that the Chinese scientists are forbidden from visiting for fear of espionage. Stopover visits also allow Tsai to have meetings with elected U.S. officials like Senators Marco Rubio and Cory Gardner and Representative Ed Royce, Chairman of the United States House Committee on Foreign Affairs, so without allies in Latin America, Tsai’s ability—or excuse—to travel within the United States would be removed.

In addition, having formal allies gives Taiwan a voice it otherwise would not have in key international organizations. Since 2016, the PRC has pressured many international organizations not to invite Taiwan. Since Taiwan is not a member—or observer—of the United Nations (UN), it is largely prevented from attending key meetings. During the Ma administration, Taiwan was an invited guest or observer at the World Health Assembly, the annual meeting of the members of the World Health Organization, from 2009 to 2016, and the International Civil Aviation Organization, a UN organization that deals with global aviation policy that meets every three year, in 2013. Though Taiwanese officials and press have been barred from these meetings since Tsai took office, its allies have lodged complaints against Taiwan’s absence and have lobbied for its presence. The efforts have not been successful to date, but they publicize how international organizations are caving to Chinese pressure, which paints China has the aggressor and Taiwan as a victim.

While the benefits of having such small nations as official allies are few, it is not in the best interest of Taiwan to push countries away or just issue a blanket severance of diplomatic ties. And even though Taiwan only has 17 official allies, it does benefit from the support of other nations. However, as Tsai and her administration have made clear, it will not be blackmailed or get into a bidding war with China to keep an ally.

A Future Strategic Threat to the United States

Taiwan’s loss of allies in Latin America and Africa also represents a strategic threat to the United States. The recent move by El Salvador may have negative consequences in the near future for American security and supremacy in the Western hemisphere.

The hallmark of Xi Jinping’s foreign policy has been the Belt and Road Initiative (BRI). It is advertised as an economic endeavor to build infrastructure along the old Silk Road that linked China to the West. Another part of the initiative is the construction of “pearls,” or the development of ports, along the Indian Ocean. One of the so-called “pearls” is now a military based in the African nation of Djibouti. It is China’s only foreign military base, but there are reports that it is looking to build one in Pakistan in the near future. Before establishing the base, China had loaned Djibouti billions of dollars—money that Djibouti could never hope to repay—and then coincidentally China signed a lease for the base for $20 million per year for 99 years. And the base is near an American military base, which has caused problems for American pilots flying missions. And the situation there will likely get tenser as China grows bolder in action. China has signed similar deals, though commercial in nature, for ports with Sri Lanka and Greece.

Now, the United States must wonder: what plans does China have for El Salvador? One of the sticking points for Tsai severing relations with the Ceren government was its demand to invest in a port infrastructure project. With Taiwan’s refusal and China now coming into the picture, will China unleash its coffers in helping El Salvador the Port of La Union? The CCP has shown a distinct pattern of port development—though so far only with ports along its BRI. Would Xi be bold enough to pressure the El Salvadoran government into leasing a military base on the coast after the government will inevitably fail to pay off any loans that China grants it? How will the United States respond to such a prospect? Will President Trump dust off the Monroe Doctrine to reassert American preeminence in the region now that claims of Chinese restraint or deference to U.S. strategic interests in the Western hemisphere ring newly hollow? Taiwan’s problem with keeping its few remaining in its corner directly coincides with the American strategic interest of checking Chinese expansion.

Even a commercial deal in which a Chinese company purchases the port and runs the operation so close to American soil should be unacceptable. It has the potential to disrupt—or reorganize—trade in the region. Any sort of potential deal will be wrapped up in language about how Chinese investment will benefit the people of El Salvador, but as we have seen with other countries, that is not the case. Taiwan’s loss of an ally this close to the American homeland could become a significant problem for the United States.

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