THE NEW SOUTHBOUND POLICY OF TAIWAN
BY HERMAN JOSEPH S. KRAFT
The mantra of “build, build, build” properly illustrates the lack of urgency given to the development of infrastructure in the Philippines following the end of the martial law regime. It also partially explains the emphasis given by the Duterte administration to the maintenance of excellent relations with China. Xi Jinping has pushed for the establishment of an extensive economic network linked by infrastructural
foundations laid by Chinese capital, technology, management, and, in many cases, even Chinese labor. Once known as the One Belt, One Road (OBOR), the Belt and Road Initiative (BRI) is arguably the most
ambitious and extensive program at building an international economic network ever since the establishment of the WTO. It is not surprising that the Duterte administration has been lobbying to be part of this.
While this has been going on, a less expansive but no less ambitious program was launched by Taiwan in May 2016, intended to expand its links with Southeast and South Asia, as well as with Australia and
New Zealand. Known as the New Southbound Policy (NSP), this is a re-establishment of the Southbound Policy that Taiwan initiated in the 1990s that sought to increase its economic footprint in Southeast Asia.
The NSP is a renewed effort to do that with an expanded geographical scope, and a more wide-ranging context.
The NSP was started by the administration of President Tsai Ing-wen when she took office in 2016. To a certain extent, this became the signature foreign policy of Taiwan. It has two general objectives. First is to
foster links between Taiwan and the nations of ASEAN, South Asia, and Australia and New Zealand in the areas of economics and trade, science and technology, and culture. This could be done through resource sharing, market-expansion, and the creation of a cooperation modality that emphasized “mutual benefits and win-win situations.” Over the long term, it is hoped that this will help forge a “sense of economic
community” among the participants. Secondly, it intends to establish mechanisms for wide-ranging negotiations and dialogue that would contribute to the formation of consensus for cooperation between and among Taiwan, the members of the Association of Southeast Asian Nations (ASEAN), countries in South Asia, as well as New Zealand and Australia. This would an important step towards the resolution of related problems and disagreements, and gradually build up mutual trust that would strengthen the building of a sense of community.
The NSP has four areas of activities, three of which are fundamentally economic in nature. These
emphasize economic and trade collaboration, resource sharing, and the promotion of institutional links. This has led to observations that the NSP is essentially a strategy intended to extend Taiwan’s economic footprint regionally. It is undeniable that the policy intends to enlarge Taiwan’s role as an economic player in the region, with the specific objective of reversing the trend towards the increasing predominance of
China’s economic involvement in Taiwan. There is, however, an aspect of the NSP that emphasizes
people-to-people exchanges – an aspect that emphasizes educational exchanges, particularly the
recruitment of students from the targeted countries in either short term exchange or full-degree programs, either undergraduate or graduate. And it is in this area that the Philippines can expand its
involvement with Taiwan.
In a guidebook produced by the Office of Trade Negotiations of the Executive Yuan (the executive branch) and the Bureau of Foreign Trade of the Ministry of Economic Affairs, the people-to-people exchange aspect of the NSP is explained as being focused on education and training. The former is about
trying to increase the number of students and researchers from the target countries coming to Taiwan and affiliating with formal educational institutions, as well as getting Taiwanese students and graduates to go to these target countries. The latter involves tapping Taiwan companies to send their staff to other countries (especially those that they have an interest in investing in) in order for them to understand and
facilitate future expansion of economic opportunities. In either case, the Philippines and Filipinos
can benefit from the exchange technically and economically.
In December 2017, an agreement was signed by the representatives of the Taiwan Economic Cooperation Office (TECO) in Manila and the Manila Economic Cooperation Office (MECO) in Taipei which renewed, strengthened, and expanded the scope of a bilateral investment agreement originally signed
in 1992. The renewal of this agreement (and others similar to it across the region) was one of the principal objectives under the NSP when the Tsai Administration came to power. It also illustrates the increasing importance of the Philippines to the success of the New Southbound Policy. As the country closest to Taiwan geographically and its recent economic success, the Philippines is one of the priority targets
under the NSP being seen as an “important gateway” to ASEAN. The renewed agreement also came
with six other deals resulting from trade and economic consultations held in Manila on December 6
and 7. These include memoranda of understanding on “green” energy, insurance industry supervision, and professional training. Some effects could already be felt as a modest but increasing number of students
from the Philippines have been making their way to Taiwan mostly on short-term exchange programs but also as full-time graduate students. There are also nascent plans intending to bring more students and technical people in Taiwan to intern and/or immerse themselves in programs, institutions, and companies in the Philippines.
The NSP, however, is not without controversy as it brings geopolitical complications into what is seemingly an innocuous effort to help facilitate regional economic and socio-cultural integration. China has opposed any expansion of Taiwan’s involvement in the region that could consequently have implications for questions of sovereignty. It has insisted on a stricter interpretation and implementation of the “One China Policy.” There is a sense that the NSP is seen in Beijing as a challenge to the BRI regardless of obvious asymmetries in scale. More than the economic aspect, however, is the political implications of the NSP – that it represents an attempt to achieve political and diplomatic goals asserting Taiwan’s presence as a regional player.
China registered its protest to the signing of the renewed agreement between MECO and TECO in an obvious attempt to undermine it just before it was finalized. A spokesperson for the Ministry of Foreign Affairs was quoted as saying after the signing that “the investment protection agreement and other cooperation documents…are obviously official in character…We hope the Philippines will abide by
the one-China principle and avoid having the Taiwan-related issue undermine the larger picture of China-Philippines relations.” China’s attitudes and preferences have already reportedly affected the behavior
of certain institutions in the Philippines. Attempts on the part of Taiwanese teaching institutions to establish language schools met with a lack of enthusiasm because of possible complications with China’s
pursuit of establishing Confucius Institutes in Philippine educational institutions.
These issues, however, bring possible opportunities for local communities. The issues associated with sovereignty in cross-Strait relations between China and Taiwan don’t loom as large (or at least they should
not) when relations involve local municipalities. The questions over federalism in the Philippines, in fact, do not need to find an answer in these possible engagements under the NSP. The objectives and
modalities that are identified under the NSP could be pursued and implemented in cooperative ventures that involve local governments, industries, and institutions. Geopolitics is messy because it involves nationstates and “national interests.” International relations involving local communities and/or
business entities (especially micro-, small-, and mediumenterprises), however, open new vistas for cooperation and collaboration.