The eighth Ketagalan Forum: Indo-Pacific Security Dialogue, held on August 21, spotlighted the strategic importance of bolstering supply chain resilience through robust free trade agreements with allied nations amid escalating regional tensions.
Organized by Taiwan's Ministry of Foreign Affairs (MOFA) and the Prospect Foundation, the forum delved into the critical global shift toward decoupling from China, focusing on de-risking semiconductor and manufacturing supply chains by forging closer ties with ideologically aligned partners.
Strengthening global partnerships
In his opening address, President Lai Ching-te emphasized Taiwan's decreasing economic dependence on China and the expansion of global partnerships through various trade agreements.
Lai referenced data from the Mainland Affairs Council, noting that Taiwan's outbound investment in China had plummeted from 83.8 percent to 11.4 percent between 2010 and 2023.
Additionally, Taiwanese exports to China, which constituted 43.1 percent of total exports in the first half of 2010, had dropped to 31.2 percent this year—the lowest percentage in 22 years.
Former Slovakian Prime Minister Eduard Heger, another keynote speaker, also drew parallels between Taiwan's current situation and Slovakia's past dependency on Russian energy. He warned of the risks associated with economic dependencies, noting that Slovakia and other European nations were vulnerable to Russian influence before the Ukraine war, underscoring the necessity of diversifying trade partners.
Additionally, Lai highlighted the trade diversification efforts undertaken by both the current and previous administrations with Western allies, such as the Taiwan-US Initiative on 21st-Century Trade, the Foreign Investment Promotion and Protection Arrangement with Canada, and an enhanced trade partnership arrangement with the United Kingdom.
He also pointed to the success of the Southbound Policy initiated by the Tsai Ing-wen administration, which resulted in Taiwan's exports to 18 Southbound nations reaching US$50.2 billion in the first half of 2024.
He reaffirmed Taiwan's commitment to maintaining peace and stability in the Taiwan Strait and outlined a four-pillar action plan to achieve this goal. The plan includes strengthening Taiwan's defense capabilities, ensuring economic security, bolstering partnerships with democratic nations, and exercising stable, principled leadership across the Taiwan Strait.
Semiconductor industry as a diplomatic asset
On the topic of semiconductors, Lai asserted that his administration would continue collaborating with like-minded partners on what he termed "democracy chips" as Taiwan works to build sustainable supply chains that contribute to global prosperity and development.
Former Japanese Prime Minister Yoshihiko Noda, one of the event's keynote speakers, echoed President Lai's sentiments. He underscored the importance of the semiconductor industry in the Taiwan-Japan relationship, citing the opening of TSMC's Kumamoto fab in February as a key example of economic collaboration between the two.
Noda also touched on the broader trade engagements, noting the 60 cooperation agreements signed between Taiwan and Japan, including the open skies agreement signed during his tenure as prime minister.
Noda expressed strong support for Taiwan's application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and reaffirmed his opposition to any unilateral attempts to alter the status quo in the Taiwan Strait. This marks Noda's fourth visit to Taiwan.
Former US Ambassador to the United Nations Nikki Haley, making her first visit to Taiwan, urged the United States to formalize a free trade agreement with Taiwan to weaken China's economic leverage. Haley called for swift action from the West to support Taiwan, warning against waiting until a conflict with China arises.
She also commended Taiwan for sparking a technological revolution, claiming that even China is now trying to catch up.
Other notable keynote speakers included former NATO Assistant Secretary-General Giedrimas Jeglinskas, Estonian MP Kalle Laanet, and Deputy Minister of Taiwan's Ministry of Foreign Affairs Chung-Kwang Tien. Their collective insights reflect the emerging diplomatic narrative of aligning with like-minded nations in the age of de-globalization and regionalization of the supply chain.
