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Across the Strait
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Richard Bush:
Take a Chance on Service Pact

In this exclusive interview, the former American diplomatic representative to Taiwan considers the delicate balance of cross-strait affairs,Taiwan's enduring relationship with the United States, and the road to future competitiveness.

Photos: CW

Richard Bush, formerly the managing director of the American Institute in Taiwan and currently thedirector of the Center for East Asia Policy Studies at the Brookings Institute, is a scholar with extensive practical experience and an authoritative voice on Taiwan-China-US relations.During his recent trip to Taiwan, he not only paid a visit to President Ma Ying-jeou, but also took time to speak with CommonWealth Magazine,urging Taiwan to stay strong and accept the challenge of trade liberalization. Following are highlights from this exclusive interview.

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Could you share with us the progress on TPP (Trans-Pacific Partnership)?

Itseems pretty clear now that the TPA (Trade Promotion Authority) is not going to be passed before the Novemberelection. I think there is not strong enough support, particularly among the Democrats, that this is worth doing for now.

So TPP negotiationswill not likely be completed this year?

Other TPP countries could be forgiven if they say, we are not going to make our final hardest concession, because the US doesn't have TPA. If they make their hardest concession without the administration getting the TPA, they are exposing themselves to post-TPA demands that reflect pressure and concession that Obama has to make with key members of congress in order to get their support for TPA. Hence most countries would just defer, especially since this is not the easiest trade agreement that has been tried.

What is the implication for Taiwan?

Well, I think the most important thing Taiwan can do is to start getting ready internally, such aslooking into outdated regulation that would have to be set aside or abandoned for TPP. If that work is underway, that could be a good signal. I think working hard with the US on a bilateral investment agreement would be outstanding, because investment is a key element of TPP, and if you have already done a good investment agreement under TIFA (the Taiwan-U.S. Trade and Investment Framework Agreement), then Taiwan is moving ahead of the game. I think that creating a stronger confidence among other trading partners that Taiwan can actually ratify and implement the trade agreements it negotiates is also very important.

How would you interpret the recent protests in Taiwan about the Cross-strait Agreement on Trade in Services?

First of all, I think nobody can dispute that there is a general fear of growing engagement with China. Second, there is also a danger in Taiwan being marginalized in terms of the economic liberalization effort in the Asian region. It has been marginalized in recent decade, and China is responsible for that. It means that Taiwan doesn't gain the market access advantages that other countries do.

This is a dilemma. If you stop liberalization with China, then marginalization will increase. So if avoiding marginalization is one of Taiwan's objectives and is part of maintaining Taiwan's competitiveness and prosperity, then you have to strike a balance between the risks of marginalization and the risk of dependence on China. It's devilishly hard to do. The benefits of trade agreements are not always easy to understand. Often the benefits are long term and generalized, but the cost is immediate and specific, with certain sectors in a more vulnerable position.

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