GTI Report Calls for More U.S. Arms, Visits, and Chip Investment to Taiwan

The Lede: Last week, a Taiwan-focused policy incubator released a new report that made specific recommendations for U.S.-Taiwan relations including streamlining military sales and training, boosting high-level diplomatic visits, and integrating Taiwanese industries with American supply chains amid heightened tensions in the U.S.-China rivalry over the self-governed island.

What We Know:

The Washington-based Global Taiwan Institute (GTI) report entitled “Advancing the US-Taiwan Partnership in a Changing Global Landscape" was released on Wednesday with a panel discussion event. The study divides the research areas and recommendations into three categories: Diplomatic and Political, Military and Security, and Trade and Economics.
Diplomatic and political recommendations include expanding contact between U.S. and Taiwanese officials, increasing efforts to include Taiwan in international organizations and public-private sector initiatives, facilitating academic-industry partnerships between universities and high-tech companies between the U.S. and Taiwan, and identifying overlaps between the U.S. Indo-Pacific Strategy and Taiwan’s New Southbound Policy.
Military and security recommendations include streamlining the Foreign Military Sales (FMS) process, expanding combined training operations with Taiwan, providing Taiwan with more affordable and flexible armaments and dual-use technologies, developing a defense strategy, and working with allies to ensure that Taiwan has the necessary supplies to maintain its democracy.
Trade and economics recommendations include liberalizing trade ties, negotiating a double taxation agreement, developing stronger semiconductor and supply chain security, advocating for Taiwan’s inclusion in regional multilateral economic groupings, and fostering expanded private sector connections between U.S. and Taiwanese companies.

The Background: The GTI is a non-profit organization with the mission of enhancing the relationship between Taiwan and other countries, especially the U.S., through policy research and programs that promote better public understanding about Taiwan and its people. Its task force on US-Taiwan Relations is headed by Ambassador Robert C. O’Brien, a former U.S. national security advisor, and composed of policy experts and practitioners from the public and private sectors as well as academia. The task force visited Taiwan and met with top officials there in March this year for this study. Meetings between U.S. and Taiwanese officials have occurred more frequently in past years. China has commonly responded with condemnation and shows of military force in and around the Taiwan Strait. Introduced in 2016 by Taiwan’s President Tsai Ing-wen, the New Southbound Policy (NSP) aims to strengthen Taipei’s relationships with the ten countries of the Association of Southeast Asian Nations (ASEAN), six states in South Asia, Australia, and New Zealand. The U.S. Indo-Pacific Strategy includes many of the same countries, among others, in a larger regional framework.

Likely Outcomes:

U.S. officials are likely to make visits to Taiwan in the future. The GTI report places significant value on these interactions and encourages them. The task force acknowledges that these visits and meetings may be provocative toward Mainland China, but pushes back on the criticism by commending U.S. diplomatic efforts and pointing out Taiwan’s warm reception of U.S. officials. Despite approaching precariously close to China’s red lines by fostering such contact, the U.S. likely prefers to keep those lines open as an option. The incumbent Democratic Progressive Party (DPP) would certainly be the preferred choice in this respect for the upcoming election in Taiwan as their leaders have enthusiastically received these provocative delegations. Any signs of further cooperation in military and security matters between the U.S. and Taiwan, which is highly encouraged by the task force, would certainly be taken even more seriously by China.
While the U.S. has been enthusiastically working to onshore Taiwanese industries, particularly chip-making, the enormous effort may prove exceedingly difficult and costly as much of the manufacturing and assembly of final products remain part of supply chains in the Indo-Pacific region. Further down the line, the plan to integrate such Taiwanese industries on U.S. soil may take a backseat to strengthening trade and economic ties in other countries in the region, particularly in Southeast and South Asia. Taiwanese companies themselves have been pivoting their investments heavily into the region in the past year.

Quotables:

“If China could get ahold of [TSMC] and control 90% of the world's small nanometer chips… that'd be a cartel worse than OPEC. They'd control the global economy and the Chinese Communist Party would be able to dictate who got the chips and who didn't. They'd control the world economy.” – Robert C. O'Brien, former U.S. National Security Advisor

“Whatever the United States does because we're frankly the leader of the free world…it creates space for other countries to do…after Speaker Pelosi went, we saw a lot more parliamentarians from a lot of other Democratic countries also go and visit in Taiwan. And had she not gone, I can almost assure you that those dozen or so more delegations also would not have gone.” – Ivan Kanapathy, adjunct professor, Georgetown University

Good Reads:

Advancing the US-Taiwan Partnership in a Changing Global Landscape (GTI)