June 14, 2017

Taiwan: Panama Turns Its Back on Taipei and Switches Cooperation to China

On 13 June 2017, Panama announced that it would turn its back on Taiwan and establish closer ties with China. This switch in allegiance is a hard blow for Taiwan, as Panama had been one of the twenty countries officially recognising Taiwan’s existence as a sovereign state. China refuses to have diplomatic ties with states which recognise Taiwan as an independent state. Panama’s move can be explained with the country’s economic ties to China: the latter is the second biggest user of the Panama Canal, thus being a major economic partner which Panama simply cannot afford to lose. 

 

This article was published by the New York Times:

Panama has severed diplomatic relations with Taiwan in favor of recognizing China, the latest in a series of developments adding to the island’s isolation on the world stage and raising questions about waning American influence under President Trump.

Panama’s decision handed Beijing a diplomatic victory at a time when Mr. Trump, in hopes of securing cooperation on issues like trade and North Korea’s nuclear ambitions, has retreated from the confrontational stances he took toward China as a candidate.

Mr. Trump’s marked warming toward China since he became president — after a rocky start that included a phone conversation with Taiwan’s president, Tsai Ing-wen — has created a diplomatic vacuum in some regions of the world. That has, in turn, made it even harder for countries like Panama to resist political and economic enticements from China, according to analysts.

Only 19 countries and the Vatican now recognize Taiwan, which is officially known as the Republic of China. Several of those countries are in Central America, including Guatemala, Honduras and Nicaragua, and the decision by Panama, announced on Monday, appeared to put those relationships in doubt.

The development was a major diplomatic setback for Taiwan. Ms. Tsai visited Panama last summer, shortly after taking office, for the opening of an expanded Panama Canal. The first ship to sail through the expanded canal was a Chinese one.

In January, Ms. Tsai returned to the region to attend the inauguration of President Daniel Ortega of Nicaragua. She also made stops in Guatemala and Honduras, during a trip that was presented domestically as shoring up Taiwan’s alliances in Central America.

China believes it is now “in the driver’s seat with regard to cross-strait relations, if not indeed regional foreign policy,” Patrick M. Cronin, an expert on Asia-Pacific security at the Washington-based Center for a New American Security, said in an email.

“China wants President Trump and President Tsai alike to think Taiwan’s future will be determined in Beijing,” he added.

China refuses to have diplomatic ties with countries that officially recognize Taiwan, which Beijing considers part of its territory and has threatened to annex by force, if necessary. Since 1945, Taiwan has been led by the Republic of China government, which lost the Chinese civil war and fled the mainland in 1949.

Taiwan’s Ministry of Foreign Affairs expressed “indignation and regret” at Panama’s decision. It said that in addition to withdrawing its diplomatic mission, it would cease all bilateral cooperation and aid.

China, by contrast, celebrated the switch.

The Chinese foreign minister, Wang Yi, met in Beijing on Tuesday with his Panamanian counterpart, Isabel de Saint Malo, who pledged cooperation on a range of issues, such as investments and marine cooperation.

The Chinese Foreign Ministry said in a statement that the establishment of ties with Panama had been done “in accordance with the interests and wishes of the peoples of both countries” and that the two governments “agree to mutually respect each other’s sovereignty and territorial integrity.”

Panama is the second country to end ties with Taiwan since Mr. Trump’s election in November [2016]. In December, the African island nation of São Tomé and Príncipe switched recognition in a move that signaled the resumption of China’s poaching of Taiwan’s allies after a moratorium under Ms. Tsai’s China-friendly predecessor, Ma Ying-jeou.

Panama “was at the top of the list” of Taiwan’s most important remaining diplomatic allies, said Ross Feingold, a senior adviser in Taipei at D.C. International Advisory.

 “It is very possible that the remaining countries will switch,” Mr. Feingold said of Taiwan’s diplomatic allies in Central America, noting that China tended to space out such moves to maximize public relations and strategic value.

Zhang Baohui, a professor of political science at Lingnan University in Hong Kong, said that Taiwan had steadily lost ground to China’s economic and diplomatic clout, now overwhelming.

“In the ’90s, they still had a fair fight because China was not so rich,” Mr. Zhang said in a telephone interview. “Now there is no longer any contest. China can offer a tremendous amount of economic incentives to woo countries.”

Mr. Trump’s phone call with Ms. Tsai during the presidential transition in December raised expectations in Washington and elsewhere that he would more openly support Taiwan.

Since meeting with President Xi Jinping of China at the Mar-a-Lago resort in Florida, however, Mr. Trump has cited Beijing’s potential help in dealing with North Korea. Proposals to sell more weapons to Taiwan appear to have moved to the back burner.

It was not clear what, if anything, American administration officials had done behind the scenes to forestall Panama’s decision.

While Mr. Trump’s policies toward China probably did not directly sway Panama, analysts said, the administration’s initial moves have already caused other American allies to recalibrate strategy for a world where the United States seems no longer willing or able to expend diplomatic energy to match China’s efforts.

Mr. Zhang noted, for example, a recent reversal by Japan of its wariness toward Mr. Xi’s signature investment project, known as “One Belt, One Road,” just months after Mr. Trump abandoned the Trans-Pacific Partnership brokered by the Obama administration.

Beijing began ratcheting up pressure on Ms. Tsai’s government shortly after her inauguration speech in May 2016, in which she declined to yield to Chinese pressure to recognize both sides as part of one China, with each having its own interpretation of what that means.

In addition to plucking recognition from São Tomé and Príncipe and now from Panama, China has also closed official communication channels with Taiwan, slowed the number of tourists visiting the island and used its clout to prevent the island’s inclusion as an observer in United Nations agencies, most recently the World Health Organization’s annual assembly in Geneva.

Wallace Gregson Jr., an American former general and assistant secretary of defense for Asian affairs who is now a consultant with Avascent Global Advisors, said that China’s primary goal was to isolate Ms. Tsai’s government. But, he said, the move reflected the impact on American policies under Mr. Trump.

“Any related discomfort it might bring to the Trump administration is an added benefit, perhaps,” he wrote in an email. “But it does show that Beijing has options that could affect U.S. actions elsewhere.”