As per former Australian foreign minister Julie Bishop, China forced Australia to abandon a planned free trade agreement with Taiwan because it wanted to isolate the island’s pro-independence president Tsai Ing-wen, It was expected that Australia, after signing a FTA with China in 2015, would pursue a similar agreement with Taiwan. However, Australia decided to abandon the deal after president-elect Donald Trump assured Taiwan president Tsai ing of elevating relations with US, triggering the start of his diplomatic stand-off with China.

Since then Australian businesses have been losing export share in Taiwan to rivals from countries that have FTAs, and have started lobbying for the start of formal negotiations. There is particular concern that New Zealand firms, benefiting from low-tariff access to Taiwanese markets, have been able to undercut Australian export prices for dairy products.