Taiwan wants FTA with Australia amid rising tensions with Beijing

Taiwan is pushing for a free-trade agreement with Australia as it moves to reduce its exposure to China amid heightened military tensions in the region.

Taiwan is pushing for a free-trade agreement with Australia as it moves to reduce its exposure to China amid heightened military tensions in the region.

Edward Tao, the new director general of the Taipei Economic and Cultural Office in Brisbane, said in an exclusive interview that a FTA would make sense for both nations that had experienced “economic bullying” at the hands of an increasingly aggressive China.

Taiwan is Australia’s sixth-biggest export market with huge amounts of coal, LNG and agricultural products shipped to the island nation every year.

“Like Australia, we also have experienced economic bullying from China and are fearful about what it will do,” said the Australian-born diplomat who took up his role in April. “Last year, they stopped our export of pineapples to the mainland.”

China, which claims Taiwan as part of its territory, reportedly blocked talks for an FTA in 2016.

Australian officials are believed to have had talks with Taiwan officials last year about closer economic and trade links with the island nation, but are fearful a FTA would cause further frictions in the already tense relationship with Beijing.

Trade, Tourism and Investment Minister Dan Tehan declined to comment on any discussions but noted the government was focused on negotiating FTAs with the UK and EU as well as scoping studies for FTAs with Israel and the European Free Trade Association.

Mr Tao downplayed speculation China would start an all-out war in the region but conceded President Xi Jinping was ratcheting up regular incursions into Taiwan’s airspace.

“We are very aware of the real threat from China and that the situation is getting heated, but we hope that sensible heads prevail,” said Mr Tao, who was born in Sydney where his father was based as a Taiwanese diplomat in the early 1970s.

“China has ambitions to penetrate the island chain from Taiwan to Japan. Xi Jinping is a very different leader from his predecessors who were more focused on the Chinese economy. Mr Xi has different aspirations and wants to leave a legacy.”

Mr Tao said the $12 billion worth of trade between both nations was highly complementary with Taiwan importing raw materials, such as coal, gas and beef, and Australia receiving finished goods, such as electronics and vehicle parts, in return.

Mr Tao said the island, which is about half the size of Tasmania with a population of 25 million, was the biggest buyer of Australian ­products on a per capita basis. “Australia runs a very healthy trade surplus with Taiwan of about $9 billion and trade is set to increase over the coming years,” he said.

Mr Tao said Taiwan’s new “Southbound Policy” aimed to enhance economic and trade relations between Taiwan and 18 countries in Southeast Asia, South Asia and Australasia. Like Australia, the island was heavily dependent on trade with China.

“Traditionally, many of our companies, particularly those in the tech sector, have gone west to China but there is now a risk they will be caught up in the trade war between China and the US,” Mr Tao said.

He said the Southbound Policy was likely to boost Taiwanese investment in Australia’s commercial and residential property markets.

“Australia has always been seen as a safe and friendly investment environment,” Mr Tao said.

He said Taiwan also was seeking the support of Australia in its efforts to join the Transpacific Partnership, a FTA between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam.