Honduras ties their Economy to China

 Was it better for Honduras to switch their Allegiance to China, or should they stuck with Taiwan?

“When I was in Taiwan, I was taught in school that Taiwan is a part of China.” -Alex Chiu. For years there has been a debate on whether Taiwan is a part of China or an independent country. During this time, many countries have switched their alliances from Taiwan to China, but why? Today, I will be answering the question; Was it better for Honduras to switch their allegiance to China? My answer to this question is yes, the switch of allegiance will benefit Honduras, however it raises concerns worldwide. Since this topic is pretty deep, we will be exploring this through 4 points: the background between these countries, the mistakes Taiwan made, then the benefits of switching to China, and finally, the impact this will bring throughout the world.

   

    Before we get too deep into this topic, let's explore the background. According to Reuters, “Taiwan on Friday cut to zero tariffs on 25 goods imported from Honduras under a free-trade agreement (FTA), offering an incentive ahead of this month’s inauguration of a new president who had threatened to break off diplomatic ties with Taipei.

Honduras is one of only 14 countries that maintain formal diplomatic relations with Chinese-claimed Taiwan.”  As of February, as we can see from this evidence, Honduras and Taiwan had a free trade agreement. Typically free trade agreements show strong ties between two countries. It normally symbolizes an alliance. Currently the US has free trade agreements with Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, Korea, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, and Singapore. However, we aren’t necessarily “Allies”, with all of these countries, as there are a few other reasons you might have a Free trade agreement. One of them is if they can significantly benefit your economy through a free trade agreement. A free trade agreement is just removing tariffs and other limits or taxes on imports from a specific country or countries. But since Taiwan is a small country, their imports would give them no more benefit tax free. You might also put a free trade agreement in place if you are neighboring countries. But this certainly can’t be the case since they are across the ocean from each other. Therefore we must conclude that they put a free trade agreement in place because they considered themselves allies. So why would they cut out a trade deal if they were close allies? It turns out that they weren’t such close allies which we will see in my second point; the mistakes Taiwan made.

    My Mom always tells me that friendships can’t be one sided. It seems like this is the case even on an international scale. According to U.S. News, “Foreign Minister Eduardo Enrique Reina said the decision by Honduras to switch allegiance was partly because the Central American country was "up to its neck" in financial challenges and debt - including $600 million it owes Taiwan. "We need investment, we need cooperation," he told local television, insisting it was about "pragmatism, not ideology." "Honduras' needs are enormous, and we haven't seen that answer from Taiwan," Reina said. Reina said Honduras had asked Taiwan to double its annual aid to $100 million but never received an answer. Honduras also tried to renegotiate the debt, but it came to nothing, he said.” 

Honduras has tried to stay allies with Taiwan. They have reached out to Taiwan to get more help, but Taiwan has not responded. Honduras is in a tough place right now and they need a lot of help. Help that Taiwan cannot provide. If Taiwan wanted to stay allies with Honduras, they would need to help out more. According to The New York Times, “The statement Saturday from Honduras’s Foreign Ministry was terse, saying in part, “Taiwan is an inalienable part of Chinese territory and, as of today, the government of Honduras has communicated to Taiwan the severance of diplomatic relations, pledging not to have any further official relations or contact with Taiwan.”” 

Not only has Honduras switched alliance to China, but they have given Taiwan the cold shoulder and said Taiwan is an “inalienable” part of China. Merriam Webster Dictionary defines inalienable as incapable of being alienated or surrendered. The term inalienable rights is commonly used as well. They are saying that under NO circumstances is Taiwan independent, days after being allies with them. Taiwan had their chance, but couldn’t hold on to an ally. 

Now that we have seen Taiwan’s mistakes, we will explore the benefits of being partners with China. China has dominated global trade for years. They have devalued their dollar in order to produce cheaper goods, they have earned “Most Favored Nation” status in multiple countries, and brokered deals with lots of countries. Most Favored Nation status is just where they have extra trade benefits. China has a larger economy and can provide a lot more support to Honduras than Taiwan. China can import more goods cheaply to them. They can provide economic stability to Honduras, and they consistently communicate with Honduras about anything they need.

We can clearly see that China is a better fit for Honduras, but what impact will this bring worldwide? As more and more countries cut ties with Taiwan, Taiwan will have less and less power. The less power they have, the more power China has over them. China could, at any moment, decide to take over Taiwan. What that means for the world, depends on the country. For America, this is certainty not ideal. According to Reuters, “The United States is trying to discourage Honduras from following through on its plan to switch diplomatic allegiance from Taiwan to China, sources close to the matter say,     hoping the lack of a formal agreement yet may leave the door open for a change of heart.”

The U.S. has had meetings with Honduras leadership, but nothing has come of it thus far. This switch of alliance also raises Geopolitical concerns. According to AP News,  “Honduras’ decision to cut diplomatic ties with Taiwan in favor of China is yet another sign of growing Chinese influence in Latin America. For decades the Asian superpower funneled billions of dollars into investment and infrastructure projects across the region. Now, as geopolitical tensions simmer between China and the Biden administration, that spending has paid off. Honduras’ decision was the second foreign policy coup in a week for China, which brokered an agreement between Iran and Saudi Arabia to reestablish diplomatic relations last week. Now, Taiwan will be recognized by only 13 countries.”

As China gets more influence throughout the world, and America gets less, this could be dangerous during times of war. Real war or trade war. According to that same AP News article, “The Central American nation follows the steps of El Salvador, Nicaragua, Panama and the Dominican Republic in turning their backs on Taiwan.

Honduras’ announcement on Tuesday was a blow to the Biden administration, which has rather fruitlessly tried to persuade countries in the region to stick with Taiwan. Taiwan, a U.S. ally, has pushed for sovereignty at the same time that Chinese President Xi Jinping has insisted the island is firmly under its control. In that sense, Tuesday’s announcement also exemplifies the American government is “losing it’s grasp on” Latin America, said David Castrillon-Kerrigan, research-professor on China-related issues at Colombia’s Externado University. “For countries, like Honduras, not recognizing the government in Beijing meant missing opportunities,” Castrillon-Kerrigan. The United States “is definitely losing influence on every front, especially the economic front, but also diplomatically, politically and culturally.” 

The U.S. is continually losing influence. Our country, if we want to compete worldwide, needs to have more influence. 

    Today, I have answered the question “Was it better for Honduras to switch their allegiance to China?” My answer hopefully showed why I believe that yes, it will benefit Honduras, however this raises concerns worldwide. The U.S. doesn’t have near enough influence worldwide. This switch of alliance could be very detrimental to America. If a trade war does happen, China will be able to control the outcome. Madeleine Albright once said, “China is in its own category - too big to ignore, too repressive to embrace, difficult to influence, and very, very proud.”  

If America doesn’t work on having more international influence, it could be very dangerous economically.