US-APAC trade deal leaves out Taiwan, military defense not ruled out

All fun and games until the chip factories are in the crosshairs

US President Joe Biden has heralded an Indo-Pacific trade deal signed by several nations that do not include Taiwan. At the same time, Biden warned China that America would help defend Taiwan from attack; it is home to a critical slice of the global chip industry, after all. 

The agreement, known as the Indo-Pacific Economic Framework (IPEF), is still in its infancy, with today's announcement enabling the United States and the other 12 participating countries to begin negotiating "rules of the road that ensure [US businesses] can compete in the Indo-Pacific," the White House said. 

Along with America, other IPEF signatories are Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam. Combined, the White House said, the 13 countries participating in the IPEF make up 40 percent of the global economy. 

That list lacks many of the countries included in the failed Trans-Pacific Partnership, a similar trade deal the Trump administration withdrew from in 2017, and signals a US return to asserting its interests in the region. While speaking with Biden, Japanese Prime Minister Fumio Kishida said he hoped the US president would also reconsider America's position in the TPP, which was reformed without US participation. 

A closer look at Taiwan, US relations

Taiwan reportedly sought entry into the IPEF, AP reported, making its absence from the framework more glaring.

The Russian invasion of Ukraine has thrown Taiwan's relationship with China, and its global importance, back under the spotlight. The big difference is Taiwan's potential impact on the global economy: it is a leading manufacturer of advanced semiconductors, controlling 48 percent of the world's chip foundry market and 61 percent of global capacity at 16nm and smaller nodes. 

China hasn't ruled out force as a way to reabsorb Taiwan, which it has expressed a desire to reacquire. Were it to do so, the world's supply of semiconductors would quickly be thrown into question, particularly if some war plans are followed, and that's not necessarily a threat the US accepts. 

"The idea that [Taiwan] can be taken by force, just taken by force, is just not appropriate. It will dislocate the entire region and be another action similar to what happened in Ukraine," Biden said.

When asked by a reporter if America would consider military intervention specifically to protect Taiwan in the event of an invasion, Biden replied yes, mentioning the US had already made that commitment and would thus help defend Taiwan.

The commitment Biden referred to, the 1979 Taiwan Relations Act, terminated formal government relations between Taiwan and the US "to help maintain peace, security and stability in the Western Pacific" by largely appeasing China's desire for it to be the only officially recognized Chinese state. 

The Taiwan Relations Act didn't completely eliminate US military options in the event China invaded Taiwan, though. In the law, the US position on Taiwan is clear: if China sought to "determine the future of Taiwan by other than peaceful means," the United States would be within its rights to "maintain [its] capacity to resist any resort to force or other forms of coercion that would jeopardize the security, or the social or economic system, of the people on Taiwan."

A White House official, speaking to the Associated Press, claimed Biden's comments indicated no policy shift. Meanwhile, an administration spokesperson reportedly told Bloomberg the US would supply equipment, but not manpower, to Taiwan if China sought war, and the New York Times noted the president had, by being so blunt, seemingly dispensed with the “strategic ambiguity” previously favored by America on China and Taiwan.

Chinese Foreign Ministry spokesman Wang Wenbin said of the announcement that Biden's comments risk damaging bilateral relations between China and the US. Wang reiterated that China's core interests, which include its sovereignty and territorial integrity, leave "no room for compromise or concession." ®

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