Japan can offer third option for Taiwan amid US-China tensions

Nikkei Asian Review says now opportune time for Japan to engage further with Taiwan economically

Taiwan and Japan flags (Getty Images image)

Taiwan and Japan flags (Getty Images image)

TAIPEI (Taiwan News) — Japan has the opportunity to present itself as an alternative for Taiwan, which finds itself caught between a rock and hard place amid the U.S.-China trade conflict.

In an opinion piece, the Nikkei Asian Review suggested that Japan offer “a third way” for Taiwan while maintaining ties with the U.S. Taiwan and the U.S. are poised to enter free trade agreement negotiations together following the relaxation of import bans on American beef and pork.

The article argued that Taiwanese companies are under growing pressure to take sides, but the entangled global supply chains have forbidden them from placing all the bets on either country. With an economy heavily reliant on China, which accounted for US$149.2 billion of Taiwan's trade last year, or 24 percent of the total, the country cannot afford to decouple from the world's second-largest economy.

As Taiwan is increasingly caught between the U.S. and China, Japan should seize the opportunity to step in. This is especially true for the two countries as they have deep industrial ties but lack a free trade framework other than an investment protection agreement inked in 2011.

While an official trade accord is unattainable due to Japan’s “one China” principle, allowing Taiwan to join the Japan-led Trans-Pacific Partnership (TPP) would be worth considering, per Nikkei.

Taiwan has emerged as a strategically-important economy in terms of its chipmaking prowess that is driven by Taiwan Semiconductor Manufacturing Company (TSMC). Experts have urged Washington to assist Taiwan to defend itself against China, invoking the nation's “silicon shield.”