on geopolitics

Taiwan, Central America and Jerusalem at the Heart of Great Power Intrigue

Reva Goujon
VP of Global Analysis, Stratfor
12 MINS READSep 27, 2018 | 10:00 GMT
The Security Council meets for a briefing on counterproliferation at the United Nations in New York on Sept. 26, 2018.

The Security Council meets for a briefing on counterproliferation at the United Nations in New York on Sept. 26. The meetings have provided a backdrop for bigger countries to seek the support of smaller ones on controversial issues such as the recognition of Jerusalem as Israel's capital or the retention of diplomatic ties with Taiwan.

  • With great power competition on the rise again, small states have a unique opportunity to push their interests in high-stakes bidding wars over sovereignty.
  • Although China is clearly dominating the diplomatic battle over sovereignty against Taiwan, the United States could complicate Beijing's efforts by reinforcing Taipei, especially in its own backyard.
  • U.S.-Central American ties are already under great strain due to aid cuts and deportations, but U.S. demands regarding Taiwan and Jerusalem will give these small states a rare chance to name their price for cooperation with their northern neighbor.

It's that time of year again: Journalists are stalking foreign leaders in midtown Manhattan hotel lobbies, flag-bearing motorcades are jamming up traffic and diplomats are carefully choreographing their walkouts and applause for the long lineup of speeches at the U.N. General Assembly in New York. Whether you're a faithful believer in the United Nations' mission to uphold international law or a Hobbesian skeptic who sees the global body as mere pageantry for nation-states pursuing their own self-interests, that slender green glass building on the East River is still the world's busiest diplomatic bazaar.

Chief among the biggest commodities hawked at the United Nations is diplomatic recognition, where even the tiniest and poorest of sovereigns are courted for their vote in the hopes of turning the tide at the head table, the U.N. Security Council. The big powers compete to set the global agenda on the main stage, while little powers haggle their way through the corridors, looking to entice the big boys to start a rare bidding war for smaller nations' favor. The struggle for recognition can be long and hard for those weaker powers, but if they carry enough geopolitical value, it can pay big to be small in an era of renewed great power competition.

The Big Picture

Stratfor has forecast that Taiwan will be a critical flashpoint in a growing strategic competition between the United States and China. One of the quieter areas in which this competition is playing out is Central America, where small and economically strapped countries are leveraging economic offers from Beijing and ties with Israel to push the United States on their own demands.

Recognition for Sale, Sovereignty at Stake

Israel and Taiwan are more than familiar with this dynamic. Both are small states living in hostile neighborhoods, and both recognize the importance of economic dynamism and diplomatic agility for survival. Both, moreover, need a great power patron — preferably one that is powerful enough to come to their aid in a time of crisis, yet far enough away that it's not constantly meddling in their affairs. For Israel and Taiwan, as well as for many other small states caught in a similar geopolitical predicament, the United States is still that patron.

What the United States decides in terms of diplomatic recognition can thus carry great weight on the U.N. stage. In 1948, at a time when the United States had effectively inherited its great power status from the crumbling British Empire, it understood Israel's usefulness in balancing the Soviet-leaning Arab states, leading U.S. President Harry Truman to recognize the state of Israel on the same day that David Ben-Gurion proclaimed the Jewish state. Taiwan, by contrast, had the opposite luck: When the United States perceived a geopolitical opportunity to split the Sino-Soviet axis during the Cold War, it normalized relations with Beijing and severed relations with Taipei in 1979 by formally acknowledging that "there is but one China and that Taiwan is a part of China." The Republic of China — that is, Taiwan — lost its seat on the U.N. Security Council to the People's Republic of China in 1971 and has been sitting on the sidelines at the global body ever since.

Now, the international system is once again evolving from its Cold War days, and with that evolution comes an adjustment in great power relations. The United States is preparing for a much more intense era of competition with China. In order to do so, however, it requires allies to manage other volatile parts of the world, like the Middle East. It's no coincidence, then, that both Taiwan and Israel are factoring heavily into U.S. foreign policy today. U.S. support for Taiwan is a critical tool of pressure that Washington intends to apply against Beijing. And as the United States works to contain Iranian regional influence, Israel is all too eager to help steer U.S. policy on Tehran in its favor, all while extracting political concessions in the process.

For a better look at the diplomatic frenzy surrounding Taiwan and Israel, look no further than the Central American isthmus, where tiny states are right in the center of great power intrigues.

For a better look at the diplomatic frenzy surrounding Taiwan and Israel, look no further than the Central American isthmus, where questions over the recognition of Beijing instead of Taipei, as well as the relocation of embassies to Jerusalem, are putting these tiny states right in the center of great power intrigues.

Taiwan's Uphill Battle

In its bid to roll back global recognition of Taiwan, Central America is one of the few remaining areas on China's to-do list. China maintains unequivocally that the island of Taiwan is a province of China, meaning that the rest of the world must choose between recognizing the People's Republic of China or the Republic of China, whose leaders fled to Taiwan in 1949 following their defeat in the Chinese civil war. Ever since the United States revoked its official recognition of Taiwan in 1979, the island has learned the hard way that loans and economic aid will only go so far in securing diplomatic loyalty from developing states, particularly in dealing with autocratic states in Africa. After Beijing picked off Taiwan's diplomatic allies one by one during the 1990s — overcoming a concerted push by Taipei to buy allies — Beijing and Ma Ying-jeou's friendly Kuomintang (KMT) government in Taipei reached an unspoken truce in 2008 in which they agreed to avoid poaching a country's diplomatic recognition from the other. That truce, however, collapsed in 2016 when Tsai Ing-wen and her pro-independence Democratic Progressive Party (DPP) won elections, prompting Beijing to ramp up its efforts to isolate Taipei. Today, Taiwan has just 17 diplomatic allies remaining, eight of whom are in the Western Hemisphere.

A map showing Taiwan's remaining 17 diplomatic allies in the world.

This is where the United States comes in. The White House is more than aware that Beijing wields the overwhelming advantage in this diplomatic scramble. Nevertheless, Washington recognizes the need to keep Taiwan in the game as part of its broader containment strategy against China. In this, its efforts to push the limits on the One China policy in the diplomatic realm, increase weapons sales, bolster overall defense cooperation, grant high-level visits to Taiwanese officials and suss out subtle ways to upgrade its de facto embassy in Taipei are all part of a deliberate strategy to hit Beijing in its Achilles' heel.

The Scramble for Central America

As the Taiwan specter grows in the U.S.-China relationship, the White House will naturally take a hard look at what Beijing is doing in its own backyard to scoop up Taiwan's remaining diplomatic allies. As one would expect, Central American states have a heavy economic dependency with their northern neighbor when it comes to remittances, economic aid and trade flows. The United States also has a direct security interest in keeping Central America stable enough to prevent a mass influx of migrants across the U.S.-Mexico border and maintain a barrier against drug flows. But many of these small and economically strapped states are tempted by Beijing's big offers of infrastructure projects and aid, especially since it also provides them with the opportunity to receive funds under the table. More than that, Beijing is offering all these goodies for a comparatively small price: the cessation of diplomatic relations with Taiwan — which stands in stark contrast to the heavy complaints and conditions the United States attaches to its relationships in Central America on issues such as corruption, narco-politicians, gang violence and human rights. And at a time when the United States is cutting aid to Central America and stripping migrants of asylum status, Beijing sees an opportunity to drive a deeper wedge between Uncle Sam and his southern neighbors.

Panama and the Dominican Republic took the plunge with Beijing in June 2017 and this past May, respectively, when they cut ties with Taiwan. In August, El Salvador became the latest to join Team China following reports that Beijing promised to invest billions of dollars in the country's La Union port and a special economic zone. Unlike previous U.S. reactions to diplomatic swaps in the hemisphere, El Salvador's move prompted the Trump administration to recall Washington's ambassadors to not only El Salvador, but also to Panama and the Dominican Republic. Ominously for San Salvador, White House spokesperson Sarah Huckabee Sanders said its decision to switch allegiance would have implications for decades as the United States "re-evaluates its relationship" with the Salvadoran government.

This puts Taiwan's remaining allies — Guatemala, Honduras and Nicaragua — in the crosshairs of both Beijing and Washington. Each of these states have their beef with the United States: U.S. foreign aid to all three combined has declined by more than a third to $195 million since 2016, the White House is terminating temporary protected status for hundreds of thousands of Central American migrants and all three want the Trump administration to butt out of their messy domestic affairs. Guatemalan President Jimmy Morales is trying to kill off a U.S.-backed anti-corruption probe before it takes him down like his predecessor. Honduran President Juan Orlando Hernandez wants to neutralize another U.S.-backed anti-corruption body and prevent Washington's drug-related extradition demands from upsetting his hold on power, while Nicaraguan President Daniel Ortega is fending off U.S. human rights condemnations in the midst of a violent crackdown on anti-government protesters.

This is where U.S. demands on Taiwan intersect with Israel as well. Beyond requiring these states to stick to Taiwan, the United States is also looking for other countries to follow in its footsteps and recognize Jerusalem as Israel's capital. Cue a new round of haggling: Guatemala, for example, scored points with the Trump White House by relocating its embassy to Jerusalem and voting against a recent U.N. resolution that called on Washington to withdraw its recognition of Jerusalem. Guatemala is also, for now, saying it will continue to stand by Taiwan (despite heavy pressure from domestic business lobbies to side with Beijing). With the White House seemingly satisfied with these diplomatic favors, Guatemala's president seized the opportunity on Aug. 31 to surround the headquarters of the International Commission Against Impunity in Guatemala (CICIG) with U.S.-donated army vehicles, booted the commissioner out of the country and officially ended the mandate of the U.N.-sponsored anti-corruption commission. The White House barely batted an eye in response, with U.S. Secretary of State Mike Pompeo simply tweeting, "We greatly appreciate Guatemala’s efforts in counternarcotics and security."

A chart showing trade figures between the United States and Central America.

Honduras is watching both the El Salvador and Guatemala examples in weighing its next move. Tegucigalpa also voted against the U.N. resolution on Jerusalem in a nod to the United States, but the government is also making it abundantly clear that it requires more incentives to stick with Taiwan. In a not-so-subtle message to the White House at the United Nations, Hernandez lamented U.S. aid cuts to Honduras and framed China's outreach to the region as an "opportunity" that could lead other (unnamed) countries to follow in El Salvador's footsteps.

Nicaragua, meanwhile, has a much testier relationship with the White House. The present government has attracted heavy scrutiny from Washington because of its violent crackdowns, while it has long been on Washington's radar for its links to Iran and Venezuela (although it did restore relations with Israel last year). Nicaragua reaffirmed its relationship with Taiwan in the wake of El Salvador's switch, but it could yet waver.

Farther south, Paraguay is the only country left in the southern cone that has stayed loyal to Taiwan, but there's no guarantee that it will continue to do so. President Horacio Cartes also followed in the United States' footsteps by opening a new embassy in Jerusalem — only for his successor, Mario Abdo Benitez (the grandson of a Lebanese immigrant), to move Asuncion's embassy back to Tel Aviv in August, proving that diplomatic deals are no more lasting than the person in power at the time.

Advantage China?

China, in turn, is making notable progress on a long-anticipated deal to normalize relations with the Vatican. The two states recently announced a provisional agreement on the appointment of bishops, but the deal could ultimately pave the way for the Vatican, Taipei's last remaining European ally, to drop recognition of Taiwan. As China tries to mop up the remaining holdouts in Latin America, the Vatican's influence over predominantly Catholic Latin America could serve Beijing well in its diplomatic isolation campaign against Taipei.

The diplomatic tide is clearly in China's favor when it comes to Taiwan.

The diplomatic tide is clearly in China's favor when it comes to Taiwan. But will the United States be able to stem Taiwan's downward diplomatic spiral, and even stand a chance of reversing it, now that great power politics are coming into play? Only time will tell whether U.S. action against Central American countries that ditch Taiwan will extend beyond rhetoric to threaten a cutoff to aid, remittances, trade or other vital links. At present, bipartisan support in Congress is building for a stronger White House push against Beijing through the Taiwan Allies International Protection and Enhancement Initiative Act (or TAIPEI Act), which could cut foreign assistance to countries that sever ties with Taiwan. By the same token, the White House's broader push to restrict immigration and cut development aid could backfire and draw the swing states deeper into Beijing's orbit. That is, unless the United States is compelled to soften its policies and moderate its tactics as a concession in negotiations.

Big opportunities await small powers when sovereignty is at stake on the periphery of great power competition. Taiwan is getting a critical boost from the United States at a time when it's on the verge of falling into diplomatic no man's land, while oft-overlooked states in Central America have the rare opportunity to push against their giant neighbor to the north and name their price in high-stakes bidding wars. These may not be the stories that dominate the headlines, but these quiet and expensive diplomatic battles are increasingly central to great power intrigue.

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