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Taiwan fears loss of diplomatic allies in Latin America

William Yang in Taipei
March 20, 2023

As Honduras contemplates switching diplomatic allegiance from Taiwan to China, experts say unofficial ties with remaining allies are stable but it's important to maintain formal relations, amid pressure from Beijing.

The Taiwanese embassy in Tegucigalpa, Honduras
The Taiwanese embassy in Tegucigalpa, HondurasImage: Fredy Rodriguez/REUTERS

If Honduras follows through with the announcement to establish official diplomatic relations with China, the number of Taiwan's official diplomatic allies will be reduced to 13.

Earlier this month, the Central American country's president, Xiomara Castro, said that she had asked her foreign minister to open negotiations with China. The switch of allegiance was pledged as part of her official presidential campaign in 2021. 

On March 15, Honduran Foreign Minister Eduardo Enrique Reina told local media that Honduras had attempted to renegotiate its debt to Taiwan, which amounts to $600 million (€566.4 million), and had asked for its annual aid package to be increased to $100 million. Reina claimed that the request had gone unanswered.

"We need investment, we need cooperation," he said.

In response, Taiwan's Foreign Ministry said in a statement that it had actively been conducting bilateral talks with the Honduran government and urged it to be mindful of not falling into China's "debt trap."

China welcomes announcement

Meanwhile, the Chinese Foreign Ministry welcomed the news that Honduras was contemplating switching diplomatic recognition to Beijing, saying that it was willing to establish friendly and cooperative relations with all countries based on the "One China" principle.

China views Taiwan as its territory and does not allow countries to hold diplomatic ties with both.

Timothy Rich, a political scientist at Western Kentucky University (WKU) who specializes in Taiwan's foreign policy, said that it was becoming increasingly hard for Taipei to hold onto its remaining diplomatic allies. He told DW that Beijing was providing larger assistance packages and using better economic opportunities and access to the Chinese market as ways to lure Taiwan's allies.

"For a long time, Taiwan was effective at integrating itself into regional institutions, but that's more of a stopgap over time as pressure from China increases," he said, adding that the number of states in the region that recognized Taiwan had gone from seven to three — Belize and Guatemala, as well as Honduras — in a few decades.

Since Taiwanese President Tsai Ing-wen took office in 2016, Panama, Dominican Republic, El Salvador and Nicaragua have all switched their allegiances to Beijing.

But Kung Kwo-Wei from Tamkang University in Taiwan said that relations with other Latin American allies remained very stable, particularly Paraguay and Guatemala. 

Honduras plans to end diplomatic ties with Taiwan

Taiwan provides humanitarian aid

Isabel Bernhard, assistant director of the Adrienne Arsht Latin America Center at the Atlantic Council, said that Central American countries, including Honduras, were still very aware of the benefits of relations with Taiwan and that the island's long-term standing in the region would not suffer too much.

She explained that Taipei had built up a strong reputation as "a provider of humanitarian assistance, digital aid, and educational diplomacy" in the region over the past 10 years.

"There could be a window for Taiwan to conduct informal engagement with [former diplomatic allies] as it leaves the door open if a former ally ever decides to switch back one day," she said. "Doing so is a way for Taiwan to play the long game in the region."

"Even though Honduras' announcement may leave Taiwanese President Tsai Ing-wen, who is set to embark on a tour to Central America at the end of March, a little exposed," she noted.

The Taiwanese president will also be travelling to the US at the end of the month.     

Waning US influence in Central America?

Since the announcement, the US has been making last-ditch diplomatic efforts to discourage Honduras from following through with the switch. The Reuters news agency reported on March 18 that the White House administration had sent a senior envoy to Honduras.

In January, the US invited Taiwan to participate in a project to rebuild schools in Honduras after the Honduran president's husband said publicly that Honduras should establish diplomatic ties with China.

Ahead of the 2021 Honduran presidential election, a US delegation was able to convince Honduras not to switch its diplomatic recognition to China and there is some hope that this might be possible again. 

"If Taiwan can maintain its diplomatic ties with Honduras for a period of time, it would mean the US still has considerable influence in the region, but it really depends on how much help the US is willing to invest in this relationship," said Da-Jung Li from Tamkang University in Taiwan.

Bernhard from the Atlantic Council added that the US could support Taiwan by offering "meaningful investment alternatives," but cautioned that Washington should avoid letting the support be viewed as efforts to counter China's growing investment and influence in Central America.

She said that any such support "should also be framed as an alternative that can exist on its own."

Taiwanese President Tsai Ing-wei
Taiwanese President Tsai Ing-wei will be travelling to Latin America and the US in MarchImage: picture alliance/AP/Chiang Ying-ying

'Official and unofficial relations can complement one another'

In Taiwan, the Honduran president's announcement has rekindled the debate about whether Taipei should maintain relations with its remaining diplomatic allies, which are mostly small and impoverished countries.

While some argue that resources should be directed towards cultivating unofficial ties with countries with more global influence, including the US and European states, Rich from WKU said that there was good reason not to give up on smaller states.

"Formal relations prevent China from claiming the sovereignty issue is universally acknowledged on China's terms and it provides Taiwan a voice in international organizations," he told DW. "Official and unofficial relations can complement one another."

Edited by: Anne Thomas