by Brian Hioe
Photo Credit: bangdoll/WikiCommons/CC BY-SA 2.0
THE CHINESE AND TAIWANESE governments continue to dispute over trade, with the Chinese government accusing the Taiwanese government last week of being protectionist and not engaging in fair trade practices. This is due to the Taiwanese government maintaining bans on a number of Chinese products.
The Chinese government then followed up this week by announcing bans on Taiwanese mangos, citing claims that pests were detected in shipments of Taiwanese mangos. The ban on Taiwanese mangos may have been an escalatory action after the Taiwanese government protested that China’s claims were inaccurate, though this slightly undercuts China’s narrative about Taiwan engaging in unfair trade practices by banning products. China also previously lashed out at trade talks between Taiwan and the US.
According to statements last Thursday by Chinese Department of Commerce spokesperson Shu Jueting, Taiwan has banned 2,509 products from China in the agricultural, textiles, metals, coal, and mineral imports sectors. The suggestion was that this violates the Economic Frame Cooperation Agreement (ECFA) that was signed between Taiwan and China in 2010. China threatened to end preferential tariffs under ECFA if Taiwan did not change its behavior.
Taiwan responded that it blocks certain products from China because of national security concerns, stating that this does not violate international rules set by the World Trade Organization (WTO), of which both Taiwan and China are a member. Taiwan accused China’s actions of being politically motivated, aiming to interfere with 2024 presidential elections. Along with its allegations, China announced that it would be investigating Taiwan’s trade practices, and that this probe would potentially last until January 12th–one day before presidential elections are to take place in Taiwan.
Nevertheless, it is not entirely surprising that the Chinese government would seek to use the WTO as a means of pressuring Taiwan, similar to how it has weaponized international bodies in which it has significant influence to pressure Taiwan.
Trade authorities in Taiwan have stated that though China did inform it of the detection of mealy bugs on June 15th and August 3rd, it had responded in July and last week about its own investigation into the farms where the mango shipments originated from, taking steps to address the issue.
But even if China blocks mango shipments from Taiwan, this may not have a significant impact on the domestic mango industry. Only 2.2%, or 4,000 tons, of 174,000 tons of mangos produced this year were shipped abroad for export. It is probable that the mango shipments originally slated for China could simply be consumed by the domestic market or sent elsewhere.
Even if the impact is likely to be limited, following up attacks on Taiwan over trade practices with a ban on Taiwanese mangoes proves to be a rather typical move from China, drawing from its pre-existing repertoire of moves aimed at signaling displeasure with Taiwan and seeking to economically constrain it.
China may have meant the trade measures as another sign of displeasure against Taiwan after DPP presidential candidate William Lai’s recent transit through the US. In the same timeframe, China has conducted military drills around Taiwan to show its reaction against the Lai transit, though these were more low-key than previous such drills by China.
China previously hit Taiwan with bans on products ranging from grouper to pineapple, wax apple, custard apple, iconic alcohols such as Kaoliang or Taiwan Beer, beverages, and snacks such as Kuai Kuai. This would be a means of economically coercing Taiwan, by suggesting that China would act to block products from Taiwan unless Taiwan politically conforms to China’s will.
This, too, was often carried out through China claiming to have discovered bugs, traces of the virus, or other irregularities through inspections. Otherwise, China sometimes claimed that Taiwanese companies had failed to submit the correct information for approval of imports. That being said, Taiwanese companies have sometimes raised concerns about China stealing trade secrets through information that it forces Taiwanese companies to disclose as part of this process.
Bans targeting agricultural goods may have, likewise, been aimed at pressuring the politically influential agricultural industry to act on China’s behalf in Taiwan. The agriculture industry in Taiwan historically had to deal with political influence from KMT-controlled farmers’ and irrigation associations, which may be why China has sought to pressure farmers.
The Tsai administration stated during these bans that it would go to the WTO for arbitration regarding these import bans. At the same time, there was always the risk that China would also seek to retaliate against Taiwan through the WTO, given that it is true that Taiwan does ban some Chinese products.
Infographic on varieties of Taiwanese mangoes by media outlet News&Market. Photo credit: News&Market/Facebook
When China acted to ban Taiwanese products, this was often targeting goods with high symbolic value. These were, however, substitutable goods that China could source from elsewhere. China remains crucially dependent on Taiwanese semiconductors as an intermediate product for its own electronics supply China. But Taiwan has not gone to the degree of threatening to cut off China from its semiconductors, likely because this would be a provocative move.
With regards to the framing of Taiwan as engaged in unfair bans of Chinese products, in a time that the KMT has taken to calls for reviving the Cross-Strait Services Trade Agreement, which was shelved close to a decade ago, the Chinese government may have also once again sought to pressure Taiwan through ECFA. That is, China’s actions may have been an attempt to recenter conversations about Taiwan’s economy around ECFA, suggesting that at a time in which voters have also shown significant discontent against the DPP because of sluggish economic growth, Taiwan should seek to revitalize economic ties with China, and that ECFA is the framework for this to occur–but that China could take away ECFA if Taiwanese voters continue to side with the DPP.
To this extent, it has been a preferred tactic of the pan-Blue camp to frame Taiwan as violating international norms regarding free trade, or to mislead about the relationship between economic frameworks. In the past, Ma Ying-jeou suggested that ECFA would be a precondition to joining the TPP, for example. China might be seeking to do the same here.
At the same time, given that investment in Southeast Asian countries under the New Southbound Policy is on the rise and investment in these countries has surpassed investment in China, one wonders if China would be taking away one of its levers for influencing Taiwan if it cuts Taiwan out of ECFA. More broadly, China may be contributing to the view of itself as a politically risky market, and international trends currently reflect decoupling from China in light of tensions between China and the US and because of such political risks–actions such as the mango ban could further this perception in Taiwan.