RG, vol10 n3, 2024
Chih-shian LIOU
Professeure, College of International Affairs
National Chengchi University, Taipei
cliou@nccu.edu.tw
Résumé: En décembre 2023, le Canada et Taïwan ont signé l’Accord sur la promotion et la protection des investissements étrangers (APIE), marquant un changement important dans leurs relations bilatérales et offrant de nouvelles possibilités de collaboration économique. Cet accord, qui s’inscrit dans le contexte de l’adhésion du Canada à la politique d’une seule Chine, représente un réalignement stratégique dans la région indo-pacifique. L’accord soutient également la candidature de Taïwan à l’accord global et progressif pour le partenariat transpacifique (CPTPP), bien que les intérêts concurrents de la Chine compliquent cette candidature. En outre, les récents changements politiques à Taïwan et les paysages politiques intérieurs plus larges de divers pays de la région indo-pacifique rendent encore plus complexe la mise en œuvre des stratégies géopolitiques, car ces dynamiques internes influencent considérablement la politique étrangère et l’engagement régional de chaque pays.
Mots-clés : relations Canada-Taiwan, Foreign Investment Promotion and Protection Agreement (FIPA), Stratégie Indo-Pacifique, Accord global et progressif pour le partenariat transpacifique.
Summary: In December 2023, Canada and Taiwan signed the Foreign Investment Promotion and Protection Agreement (FIPA), marking a significant shift in their bilateral relations and offering new opportunities for economic collaboration. This agreement, set against the backdrop of Canada’s adherence to the One China Policy, represents a strategic realignment within the Indo-Pacific region. The agreement also supports Taiwan’s bid for membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), though China’s competing interests complicate this bid. Additionally, recent political changes in Taiwan and various Indo-Pacific countries’ broader domestic political landscapes add further complexity to implementing geopolitical strategies, as these internal dynamics significantly influence each country’s foreign policy and regional engagement.
Keywords: Canada-Taiwan relations, Foreign Investment Promotion and Protection Agreement (FIPA), Indo-Pacific Strategy, Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Introduction
In December 2023, Canada and Taiwan reached a significant bilateral relationship milestone by signing the Foreign Investment Promotion and Protection Agreement (FIPA). This landmark agreement underscores a notable shift in the dynamics between Canada and Taiwan, offering a new avenue for collaboration and cooperation in the realm of investment and economic ties. However, amidst the backdrop of the enduring One China Policy (OCP) shaping Canada’s official diplomatic stance, the implications of this agreement extend far beyond mere economic considerations. The FIPA between Canada and Taiwan signifies more than just a bilateral economic partnership. It represents a strategic recalibration of their relationship amidst evolving global dynamics, particularly within the Indo-Pacific region. How it evolves in the near future depends on how both governments navigate geopolitical landscapes and their domestic public opinions.
The bilateral FIPA marks the first agreement resulting from the Canadian government’s updated model of the Investment Canada Act (ICA) in 2021 (Executive Yuan, Republic of China 2023). Concurrently, with the newly established Taipei Economic and Cultural Office (TECO) in Montreal in the same year, the fourth official office of its kind after three decades, Canada’s de facto recognition of Taiwan occurred despite the prevailing OCP (Asia Pacific Foundation of Canada 2023). This significant development holds promising implications for Canada’s Indo-Pacific Strategy, particularly in bolstering supply chains and fostering strategic coherence. By formalizing economic ties with Taiwan, Canada not only strengthens its position within the Indo-Pacific region but also contributes to broader efforts to enhance economic integration and stability.
Furthermore, this milestone paves the way for Taiwan’s potential accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). As Canada and Taiwan deepen their economic partnership through the bilateral FIPA, Taiwan’s participation in the CPTPP gains momentum, offering mutual benefits and reinforcing the region’s commitment to free trade and multilateralism (Hopewell 2023). Nevertheless, while the bilateral FIPA serves as a significant stepping stone toward Taiwan’s accession to CPTPP, it is imperative to consider the complexities arising from the rival bids for CPTPP membership between China and Taiwan, especially under the framework of the One-China Policy.[1]
The competing claims to CPTPP membership present a tangible challenge for the Canadian government as it assumes the chairmanship of the CPTPP in 2024. With Canada assuming the leadership role within the CPTPP, Taiwan anticipated increased opportunities to advance its bid for membership and enhance its economic integration with other member states. However, as the first couple of months of Canada’s chairmanship progressed, Taiwan encountered setbacks in its application process. The ongoing political tensions between Taiwan and China spilled over into discussions surrounding Taiwan’s CPTPP membership. Some member countries expressed concerns about potential repercussions from China if they openly endorsed Taiwan’s bid. Additionally, procedural challenges within the CPTPP framework complicated Taiwan’s path toward membership, which hardly passes the organization’s consensus-based decision-making process for the same reason.
However, this development should not come as a surprise. Taiwan’s bid for membership in the CPTPP is not solely an economic issue; it is deeply entwined with political considerations (He and Magcamit 2024). Merely pointing out that China’s socialist economic system and its mercantilist practices fall short of the high standards set by the CPTPP while Taiwan meets these standards is not sufficient to address the complexities of the situation. Balancing the interests of both Taiwan and China within the CPTPP framework requires a delicate diplomatic approach that acknowledges Taiwan’s economic significance while respecting the political sensitivities surrounding the One-China Policy. In other words, as Canada charts its course through this intricate geopolitical landscape, it must strive for practical solutions that uphold the tenets of free trade and multilateralism while acknowledging the geopolitical realities.
Meanwhile, Taiwan’s domestic political landscape adds another layer of complexity to this dynamic. Following eight years of governance by the pro-independence Democratic Progressive Party (DPP), the 2024 presidential election witnessed a significant shift in electoral dynamics. DPP presidential candidate Lai Ching-te secured victory with only 40.05% of the votes, marking the lowest percentage for a winning candidate since 2004. Furthermore, the DPP lost control of Taiwan’s legislative body, signaling a clear decline in its electoral support. This electoral setback serves as a wake-up call for the DPP, prompting reflection on its approach to cross-strait relations during its tenure.
At the same time, the China-friendly Kuomintang (the Nationalist Party, KMT) emerged as the largest party in the legislature, highlighting a resurgence of support for more conciliatory approaches toward China. The KMT’s emphasis on economic interaction and social exchanges with China resonated with voters, reflecting a growing desire for stability and pragmatism in cross-strait relations. KMT’s Vice Chairman, Mr. Hsia Li-yan, visited China in March, the 8th time in the past two years. Former President Ma Ying-jeou visited China and had a meeting with Xi Jinping in April. It is essential to note that the economic interdependencies between Taiwan and China play a significant role here. China, including Hong Kong, has historically been the largest destination for Taiwan’s exports despite a gradual decline in the proportion of exports directed toward China.[2] This economic relationship underscores the intricacies of cross-strait relations, where economic cooperation coexists with political tensions (Tsai 2017). In April 2024, 17 KMT legislative members visited China to « break the ice » with China. In return, China partially lifted the ban on its tourists to Taiwan, easing the travel restrictions for Fujian residents to visit Matsu Island, and opened its market access for Taiwan’s agriculture and fishery products. Moreover, recent public opinion polls in Taiwan indicate that over 50% of Taiwanese prefer maintaining the status quo in cross-strait relations, either indefinitely or for now and deciding at a later date.[3] For example, in 2023, the stance of “maintain status quo indefinitely” accounts for 33.2%, while the stance of “maintain status quo, decide at later date” accounts for 27.9%. This sentiment, coupled with the electoral outcomes, challenges the DPP’s previous strategy of comprehensive confrontation with China.
The recent political shifts in Taiwan carry significant implications for the Canada-Taiwan relationship, emphasizing the need for a nuanced understanding of Taiwan’s evolving priorities and diplomatic strategies. With Taiwan’s interests delicately balanced between maintaining economic ties and managing political tensions with China (Dittmer 2017), finding common ground between Canada and Taiwan has become more crucial than ever, particularly within the context of the Indo-Pacific Strategy. As the outgoing Tsai Ing-wen administration’s era of comprehensive confrontation with China draws to a close, there is an opportunity for both Canada and Taiwan to reassess their approach to China and explore avenues for constructive engagement that advance shared interests while mitigating potential risks.
Canada’s interests in the region are also influenced by its relationship with China, which has exhibited fluctuating dynamics over time, often characterized by periods of tension and confrontation (Paltiel 2018). Tension between Canada and China has been across various fronts, including trade, diplomacy, human rights, and security. Canada and China maintain robust economic ties, with bilateral trade reaching significant levels. However, tensions have arisen over market access, intellectual property rights, and trade imbalances. Negotiations on a bilateral free trade agreement have been ongoing but have faced challenges. Diplomatic relations between Canada and China have been strained, particularly following the arrest of Huawei executive Meng Wanzhou in Vancouver in December 2018 at the request of the United States. In response, China detained two Canadian citizens, Michael Kovrig and Michael Spavor, on allegations of espionage, widely seen as retaliation. This situation has led to a significant deterioration in diplomatic ties. Canada has raised concerns about human rights abuses in China, particularly regarding the treatment of ethnic minorities in Xinjiang, crackdowns on democracy in Hong Kong, and repression of political dissent. These issues have strained bilateral relations and led to public criticism from Canadian officials. Canada and China have differing perspectives on various security and geopolitical issues, including territorial disputes in the South China Sea, cybersecurity concerns, and Canada’s participation in the Five Eyes intelligence alliance with the United States, United Kingdom, Australia, and New Zealand.
Looking ahead, all these interactions will be heavily debated in Canada’s forthcoming federal election in 2025. Depending on the outcome of the election and subsequent policy decisions, Canada’s interests in the region may be redefined, potentially influencing its approach to China and broader engagement in the Indo-Pacific region. In short, against the backdrop of negative interactions with China and mounting concerns reflected in domestic polls, Canada faces complex considerations in navigating its engagement with Taiwan. The gravity of these considerations underscores the need for careful analysis and strategic decision-making. Moreover, with the impending transition to a new U.S. administration following this year’s election, the geopolitical landscape in the Indo-Pacific region is poised for potential shifts, further shaping the strategic calculus for both Canada and Taiwan.
It is evident that the Indo-Pacific Strategy represents a dynamic and evolving framework. As the geopolitical landscape continues to evolve, so too does the strategy’s content and implementation, reshaped by the diverse domestic contexts of its member countries. Moving forward, the success of the Indo-Pacific Strategy will depend on the continued commitment and collaboration of its member countries, as well as their ability to navigate complex geopolitical dynamics and evolving domestic contexts.
References
Asia Pacific Foundation of Canada (2023). “Taiwan Opens de facto Consulate in Montreal, Its Fourth in Canada.” https://cast.asiapacific.ca/map/event/4405.
Dittmer, Lowell (2017). “Taiwan and the Waning Dream of Reunification.” In Lowell Dittmer, ed., Taiwan and China: Fitful Embrace. California: University of California Press.
Executive Yuan, Republic of China (2023). “Taiwan and Canada Complete Negotiation over a Foreign Investment Promotion and Protection Arrangement.” https://www.ey.gov.tw/otnen/D3BA0C3D9BF6E894/fee84307-8a2b-45b4-811e-1535de3bc025
He, Tian. and Michael Magcamit (2024). “The CPTPP, Cross-Strait Tensions, and Taiwan’s Recognition for Survival Strategy under the Democratic Progressive Party.” International Relations of the Asia-Pacific 24 (2): 217-252.
Hopewell, Kristen (2023). “Canada’s CPTPP Leadership in 2024: Managing the Rival Accession Bids of China and Taiwan.” Canadian Global Affairs Institute. https://www.cgai.ca/canadas_cptpp_leadership_in_2024_managing_the_rival_accession_bids_of_china_and_taiwan .
Paltiel, Jeremy (2018). “Facing China: Canada between Fear and Hope.” International Journal 73(3): 343-363.
Tsai, Chung-min (2017). “The Nature and Trend of Taiwanese Investment in China (1991-2014): Business Orientation, Profit Seeking, and Depoliticization.” Dans Lowell Dittmer (dir.), Taiwan and China: Fitful Embrace. California: University of California Press.
[1] China formally applied to the CPTPP on September 16, 2021 and Taiwan submitted a request to join the CPTPP a week later on September 22.
[2] For official data on the export destinations of Republic of China, Taiwan, see: https://cuswebo.trade.gov.tw/FSCE3000C?table=FSCE3010F.
[3] According to National Chengchi University Election Study Center which has published the annual survey data on “Changes in the Unification-Independence Stances of Taiwanese” since 1994, there is an increasing support for cross-strait status quo, including “maintain status quo, decide at later date” and “maintain status quo indefinitely,” in recent years. For the survey data, see: https://esc.nccu.edu.tw/PageDoc/Detail?fid=7801&id=6963.