Track II – common interests
unite Taiwan and NZ

Leadership Network members Will Seal and Joshua Pietras were part of the Foundation's Track II delegation that discussed bilateral relations and regional issues with Taiwan's Prospect Foundation in October. In this article, Seal outlines what the talks covered.

Leadership Network member Will Seal chatting to a member of the Taiwan delegation

Taiwan's international relations occupy a curious space – of the United Nation's 193 member states, the island nation is officially recognised by just 21, of which New Zealand is not one. Because of this, although Taiwan is New Zealand's twelfth largest export market, and our fifteenth largest source of imports, no official diplomatic or political relations exist between the two nations.

Despite the absence of official links, extensive economic, academic, scientific and cultural interactions ensure the two nations' close existing ties continue to grow, complemented by a number of unofficial talks (such as our Track II dialogue) that provide opportunities for engagement.  

Now in its third year, the day-long Track II dialogue between the Asia New Zealand Foundation and Taiwan’s Prospect Foundation involved academics, economists and researchers discussing a range of issues including:

  • Asia-Pacific security challenges and security and stability in the South China Sea
  • Taiwan’s upcoming presidential election and its implications
  • Asia-Pacific economic integration, and China’s growing regional role.

Taiwan’s position in the politically tense South China Sea was a particular focus of discussion, with both parties agreeing the geopolitical landscape was becoming increasingly complex:

  • North Korea shows no sign of moderating its aggressive posture and determination to strengthen its WMD capability.
  • Japan has removed its self-imposed geographical limits to its military operations as a response to perceived regional instability.
  • China’s emergence as a major power continues, with growing military clout and aspirations to replace the U.S. as the dominant regional power.
  • The United States presses forward with its “pivot” back to Asia.

The delegates agreed that unless problems are carefully managed, miscalculation or misunderstanding could quickly ratchet up tensions.

Of greatest concern to the delegates was the worrying friction over ownership claims to various island groups in the South China Sea. Concern was also expressed over the lack of progress in developing a multilateral maritime code of conduct, and in implementing the 2002 Declaration on the Conduct of Parties in the South China Sea. It was agreed there was a pressing need for confidence and trust-building measures in an attempt to reduce tensions and foster a habit of co-operation.

The dialogue also focussed on Taiwan’s upcoming (January 16, 2016) presidential election and the implications for Cross-Strait and international relations depending on the outcome. The polls point to a comfortable victory for the pro-independence Democratic Progressive Party (DPP) over the incumbent Kuomintang Party, despite a late change in the Kuomintang’s candidate.

Under Taiwan’s current political leadership, relations with China are at their best in 60 years, meaning a change in government could have a significant impact on Cross-Strait relations – a situation watched closely by many in the Asia-Pacific region.

New Zealand, with its strong interest in the South Pacific, does not want to see a return to “cheque-book diplomacy” in the region due to previous destabilisation of some of the more politically fragile nations. The Taiwanese delegation had particular concerns about the future of the mutually beneficial Economic Cooperation Framework Agreement (EFCA) under new political leadership.

Regardless of the potential outcomes, it was agreed the election campaign demonstrates democracy is flourishing in one of Asia’s most democratic nations.

Unsurprisingly, given New Zealand’s close economic ties with Taiwan, the topic of Asia-Pacific economic integration was also a frequent touchpoint. The relationship between the two countries is of growing importance, with two-way trade exceeding NZD $1.6 billion per annum, common membership of APEC, the 2013 ‘Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu on Economic Cooperation’ (ANZTEC) trade agreement coming into force, and days-old signing of the Trans Pacific Partnership (TPP), which does not include Taiwan. It was agreed that the TPP should not be characterised as a means of countering China, but rather a pathway to build over time a free trade area that would encompass the entire region.

Sharing a mutual trade dependence on China (New Zealand’s second largest trading partner and Taiwan’s largest trading partner), New Zealand and Taiwan understand the potential economic risks of trade disruption. With diversification identified as a key tactic to reduce this risk, the Taiwanese delegation reiterated Taiwan’s interest in joining economic partnerships such as the Regional Comprehensive Economic Partnership or the TPP in future, but acknowledged the diplomatic difficulties of doing so.

The final point of discussion focused on the opportunities and challenges presented by China’s evolution towards superpower status. The region is having to adjust to the new geo-political realities and some countries are managing this better than others. The United States, long the dominant force in the Western Pacific, is now focussed on the challenge China presents to its strategic primacy. It was agreed among delegates that it is essential that China and the United States continue to engage in building a wide-ranging relationship that is robust enough to prevent disagreements turning to antagonism. Despite the new geopolitical dynamics, there is no doubt that all countries in the region were benefitting from China’s powerhouse economy and would be adversely affected by an economic downturn in China, or even worse the outbreak of conflict.

Notwithstanding the challenges ahead, it was agreed that Taiwan and New Zealand, as democratic island states, with ever-present large neighbours, intertwined futures with China, and a shared interest in the South Pacific, should continue to grow the relationship through, trade, economic and cultural interaction.