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Opening a new chapter for US – Taiwan partnership in the Pacific Islands

By Russell Hsiao

For Taiwan watchers, the Pacific Islands have been a neglected piece of the geostrategic puzzle. Comprised of small, distant island-nations with seemingly marginal strategic importance for Taiwan’s defense or economic interests, the region’s value – from the traditional mindset of Taipei policymakers and outside observers – has tended to be considered only in terms of its diplomatic value for supporting the international legitimacy of the Republic of China (Taiwan). Now, in an era of strategic competition between the United States and the People’s Republic of China (PRC), there has been a reconsideration of the region’s strategic importance on the international stage.

This has implications for the Pacific region, which some analysts have described as a new “Great Game,” and underscores the need for Taiwan to reinvest in its four remaining diplomatic partners in the region: Palau, Marshall Islands, Tuvalu, and Nauru, as well as the Pacific Island Countries (PICs).

Pacific Islands and strategic importance of Taiwan’s international space

The reasons why policymakers in Taipei and Washington traditionally view the Pacific Islands from a narrow diplomatic lens are understandable. In the competition for diplomatic recognition between Taipei and Beijing, which has been ongoing since 1949, the Pacific Islands have long been one of the critical battlegrounds. Over the last four decades, many island-nations in the region seesawed between their recognition of Taipei and Beijing, in bids for higher offers of lucrative monetary incentives that were doled out by both sides in exchange for diplomatic ties.

However, Taipei’s hyper-emphasis on diplomatic recognition overlooks the growing importance of the region – such as for fishery resources, raw materials, vital maritime routes for shipping, and the strategic geographical location of the PIC for its broader interests. [2] As a result, even legitimate development aid vital to the region’s development and for the global commons has often been wrapped up in an oversimplification of the overall costs of the cross-Strait diplomatic competition -without clear consideration of these other vital goals. Consequently, public support within Taiwan for maintaining or even enhancing ties with the Pacific Islands has meandered.

Conversely, Washington did not acknowledge the stakes in supporting Taiwan’s international diplomatic space for decades after the normalization of relations with the PRC in 1979. Still, in the face of Beijing’s diplomatic offensive, which is in part responsible for unilaterally changing the status quo in the Taiwan Strait, Taiwan’s international space has important strategic value – not only for the maintenance of peace and stability in the Taiwan Strait and the Western Pacific, but also for the rules-based international order. As a result, the United States has finally recognized an interest in shoring up Taipei’s international diplomatic space to help maintain peace and stability in the Taiwan Strait through the legislation such as the Taiwan Allies International Protection and Enhancement Initiative (TAIPEI) Act of 2019.

Different approaches to Taiwan’s international space

To be clear, Taiwan’s international space has long been influenced by the dynamics of cross-Strait relations, as well as international geopolitics. As Beijing tries to impose its interpretation of the UN Resolution of 2758 to marginalize Taiwan in the international system through its “One-China Principle,” whether or not Taipei can expand its international space will depend in part on external support for its legitimacy and political autonomy.

Under the Kuomintang (KMT, 國民黨), the Ma Ying-jeou (馬英九) Administration (2008-16) relied heavily on Beijing to maintain stable cross-Strait relations and expand Taiwan’s international space. The Tsai Ing-wen (蔡英文) Administration (2016-2024) – with which Beijing has refused official communications since she came to power -has focused its efforts on rallying international support for Taiwan’s international space to counter the PRC’s pressure campaign.

While the two approaches reflect critical differences in how each administration approaches the matter of the country’s international space, the two initiatives are not independent of external geopolitical trends. The Ma administration’s approach coincided with the then-Obama administration’s efforts to engage the PRC, whereas the Tsai administration dovetails with the Trump administration’s launch of the “Free and Open Indo-Pacific Strategy” and great power competition with the PRC.

During the Ma Administration, the two sides of the Taiwan Strait pursued a “diplomatic truce” that – at least on the surface – halted the trend of “checkbook diplomacy.” In actuality, while Beijing did not appear to actively pursue the establishment of diplomatic relations at Taipei’s expense, it continued to pledge to provide significant resources and projects, some covertly, into the region. Accordingly, it was only a matter of time before these countries would see less benefit in maintaining their diplomatic relations with Taipei, and succumb to what other countries have called “elemental realism.” This situation was only made clearer and more acute when China poached partners from Taiwan in the Pacific, including Kiribati and the Solomon Islands, in 2019.

It is both this naivety and benign neglect by Taipei, its allies, and like-minded partners that gave China the strategic opening to make significant diplomatic inroads into the Pacific Islands.

Growing alignment between the US “Free and Open Indo-Pacific” and Taiwan’s interests in Pacific Islands 

While it is understandable why Taiwan remains focused on maintaining its diplomatic relationships, it cannot be nearsighted in its focus on its existing diplomatic relations, since this could be a missed strategic opportunity to turn the tables – especially in a resource-deprived environment where a relatively small investment can go a long way. In light of Beijing’s concerted and sustained strategy, it behooves Taiwan, regardless of the administration in charge, to think creatively about how its initiatives toward the region can be more politically sustainable, as well as further integrated into the US Indo-Pacific Strategy.

The signing of the memoranda of understanding (MOU) between the United States and PalauMarshall Islands, and Micronesia – which make up the Federation of Freely Associated States (FAS) – over the first two months of this year commit long-term US resources to the region. Depending on how these resources are implemented and sustained, these three MOUs could potentially open a new chapter for US-Taiwan cooperation in the Pacific Islands.

Indeed, president Joe Biden’s proposed federal budget released earlier this month includes more than USD $7.1 billion in funding for the Marshall Islands, Micronesia and Palau that will be allocated over the next 20 years. Similarly, Taipei should develop a long-term vision and strategy with adequate resourcing that can advance and can further its interests alongside those of the region. Nowhere else in the world are the interests of Taiwan and the United States’ more strongly and better aligned than in the Pacific Islands.


Although Taipei’s role in the Pacific Islands from 1979 onwards may have been viewed as non-constructive to regional development due to the presumptively negative effects of checkbook diplomacy, the role that Taiwan is now seen as potentially playing is vastly different, especially in contrast to Beijing’s debt-trap diplomacy.

Taipei should think creatively about how to use existing initiatives like its New Southbound Policy (which does not directly target the PICs) and deeper cooperation with target countries like Australia and New Zealand in order to broaden and deepen its presence in the Pacific Islands. Moreover, it is critical that successive administrations in Taipei, regardless of the party in charge, guarantee policy continuity and ensure that Taiwan’s engagement is comprehensively sustained. Taiwanese leaders should make regular visits to the Pacific Islands to highlight not only the region’s vital importance, but also to underscore the enduring nature of Taiwan’s commitment both to the region and its people.

Taipei needs to clearly articulate and incorporate the PICs into Taiwan’s broader vision for the free and open Indo-Pacific in a way that is multidimensional and strategic. In addition to the United States, Australia, and New Zealand, it is essential for Taipei to coordinate directly and indirectly with Japan and India under the “Quad” framework in the Pacific Islands. In particular, Japan has a long and sustained engagement with the region that is worthy of careful study.

Some issues that Japan and PICs share include building capacity through coast guard cooperation, enhancing maritime domain awareness, humanitarian assistance, and disaster relief, countering illegal, unreported, and unregulated (IUU) fishing, and soft infrastructure development. At the same time, allies and like-minded countries should work proactively to address the concerns of climate change, which is an essential issue for Pacific Islanders and stands as an area where all parties could stand to work together.

Now that the Biden administration has launched a renewed vision and ambitious commitment to invest resources into the Pacific Islands, it opens a new chapter for US-Taiwan partnership in the Pacific Islands. In an era of strategic competition between the United States and the PRC, the recalibration of the region’s strategic importance on the global stage is necessary. As Alexander Gray, a non-resident senior fellow at GTI and former National Security Council official under the Trump administration, wrote in US-Taiwan Relations in the 21st Century: Building the Foundation for a Global Partnership: “now is the time for an aggressive embrace of the expansion of Taiwan’s diplomatic space.”

The old adage applied to war is just as valid in terms of diplomacy: “The best defense is a good offense.” Bearing this principle in mind would serve Taiwan well in its relations with the island-states of the Pacific.

The main point: Taipei policymakers have traditionally viewed the Pacific islands as a battleground with the PRC for diplomatic recognition. However, Taipei should undertake a more considered approach to the PICs that involves Taiwan’s other allies and like-minded partners, and takes advantage of important shared issues.



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