Whilst no explicit reason was given when announcing Taiwan was not invited to IPEF, a lot of commentary afterwards was on the same track:
- Fear of irking China,
- to not want to pick sides,
- what should we call Taiwan?
The first two are common reasons when any ASEAN countries are looking at anything potentially including Taiwan. That said, everyone is also probably aware that Taiwan pursues bilateral agreements separately with the other nations anyway.
Although the IPEF is intended to counterbalance China’s growing clout in the Asia-Pacific, it is likely that some members are reluctant to include Taiwan for fear of upsetting China.
While Taiwan has indicated interest in joining the IPEF—and 250 members of Congress called for Taiwan’s inclusion—the island was ultimately left out of the framework to secure the participation of other South and Southeast Asian countries reluctant to antagonize Beijing.
Inclusion of the self-ruled island of Taiwan, which China claims as its own, would have irked Beijing.
“We are looking to deepen our economic partnership with Taiwan including on high technology issues, including on semiconductor supply,” Sullivan said. “But we’re pursuing that in the first instance on a bilateral basis.”
Taipei, May 23 (CNA) Two Taiwanese analysts said Sunday that Taiwan has been excluded from the United States' new Indo-Pacific economic initiative to avoid painting the framework as an anti-China coalition, which would deter other countries.
Roy Chun Lee, Senior Deputy Executive Director at the Taiwan WTO & RTA Center, points out that any action against corruption or in support of infrastructure would be connected to national sovereignty. ASEAN members are afraid of being asked to "pick a side".
In reality, the major hurdle for Taiwan to join this multilateral framework comes down to the perennial issue of what name to use. Taiwan is currently a member of the WTO under the name of “The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu.” For the U.S., allowing Taiwan to join the IPEF framework under the same name runs the risk of providing legitimacy to arrangements that degrade or belittle Taiwan’s sovereignty. The name of “Taiwan” is a non-starter, too, as it would challenge the current U.S. One China policy.
The U.S. is also hedging against potential blowback from Beijing, as most Indo-Pacific nations are still trying to avoid “picking sides” in the competition. For many of China’s neighbors, especially countries in Southeast Asia, it is imperative to maintain access to China’s market. Seven of the 10 ASEAN members joined IPEF’s launch; they may have thought twice if the event turned into a statement on Taiwan’s international status. Thus, including Taiwan in the first round of countries participating in IPEF could have embroiled the U.S. in a controversy over Taiwan’s representation, and the U.S. would not want the focus of the framework to be overshadowed.
but it seems that the U.S. didn't want Taiwan to join IPEF to not provoke China, and yet China was against IPEF all along.
Although China was critical of IPEF, it would be also critical of anyone joining it if it included Taiwan. US knows this and wanted to kick start something after Trump had left the previous framework. Due to the perceived relationship between Taiwan and the US, all countries in the region would have presumed Taiwan to be included, and this would make them think twice about signing up with China staring them down. Remove Taiwan and the signees can breathe a little easier about signing.