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Taiwan to give 500,000 tourists perks worth $220 each to boost economy

TAIPEI – Taiwan will offer 500,000 tourists a cash or discount incentive this year as it tries to shore up its post-pandemic travel industry and boost spending. 

The incentives, worth NT$5,000 (S$220) each, were announced on Thursday as part of a NT$5.3 billion package to attract international tourists. 

While some details were not yet available, including whether there were any eligibility requirements or how people would be chosen, officials said in a statement that the money may be handed out electronically or as discounts for accommodation. 

“We hope to accelerate and expand efforts for international tourists to come to Taiwan,” Mr Lin Fu-shan, department director of the Ministry of Transportation and Communications, said at a press briefing. The spending plan also included a proposal to offer travel agencies NT$10,000 each for groups of at least eight tourists, and NT$20,000 each for groups of at least 15 tourists.

Taiwan is looking for ways to boost its economy after removing Covid-19 curbs in 2022. Growth is expected to slow in 2023 as the trade-dependent island struggles with a dropoff in exports, making it more important to spur activity through domestic demand and tourism.

Before the pandemic, tourism accounted for about 4 per cent of Taiwan’s gross domestic product, according to Taiwan’s Tourism Bureau. 

But visits came to a near-standstill as Taiwan closed its borders and implemented quarantine rules to contain the virus.

Geopolitical tensions have also chilled the industry, as China banned individual tourists travelling to Taiwan in 2019, and in January left the island off a list of 20 permitted destinations for Chinese tour groups.

Taiwan has taken some steps to welcome visitors, including reopening its borders to individual travellers from Hong Kong and Macau in February. The government wants to attract six million tourists in 2023, Transportation Minister Wang Kwo-tsai said earlier.

After reopening last October, Taiwan attracted nearly 900,000 tourists in 2022, according to a statement from Taiwan’s Transportation Ministry.

The tourism announcement was part of a larger NT$380 billion stimulus package that was approved via a special act by lawmakers this week. Lawmakers still need to sign off on where all of the funds are used specifically.

Other parts of that plan – paid for using surplus tax revenue – include allocating funds for use by the state-owned Taiwan Power Company and health insurance system. 

That broader package has been in the works for a while, but Thursday was the first time officials detailed several of the specifics, including the plan for tourists. Officials are expected to release more details in the afternoon.

Taiwan’s campaign comes as others in the region also roll out initiatives to attract tourists. The “Hello Hong Kong” campaign, for example, involves giving out 500,000 air tickets among other perks.  BLOOMBERG

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Overview 

Travel Tourism Market                                           

Sources: National Travel and Tourism Office with the U.S. Department of Commerce 

The United States is the top long-haul destination for Taiwan’s outbound travelers. According to the National Travel and Tourism Office of the U.S. Department of Commerce, the United States welcomed 50,470 tourists from Taiwan in 2021. Though the pandemic depressed these inflows, travel volumes have begun to return to their pre-Covid levels over the past two years. In 2022, the U.S. welcomed 137,085 tourists from Taiwan, which was a three-fold increase over the previous year.  

According to the National Travel and Tourism Office in the U.S. Department of Commerce, in 2020, 37% of Taiwanese tourists came to the United States to visit friends and relatives, 29% were taking a vacation or holiday, 21% were doing business and 7% were attending conferences and trade shows. Taiwan tourists took an average of 69 days to finalize their travel plans, and 8% booked a prepaid package. The average Taiwan visitor spent thirteen to twenty-eight nights in the United States, and they visited an average of 1.2 states. 

The increasing ease of travel between the United States and Taiwan has led to strong gains for the U.S. tourism market.   Taiwan was admitted to the United States’ visa-waiver program in 2012 and joined the Global Entry program in 2017. Because of these changes, the majority of Taiwan’s tourist and business travelers can now travel to the United States without a visa.

As Taiwan’s travel market continues to mature, international travel is shifting towards Foreign Independent Travelers (FIT), which describes individuals who design their itinerary around personalized packages of special interest tours, flights, car rentals, and accommodations.  More than 80% of the visitors from Taiwan to the United States are FITs. Demand is expected to grow for niche travel experiences such as sports travel, adventure tours, health and wellness vacations, honeymoon tours, gastronomic holidays, cruise tours, and youth study travel.  

Leading Sub-Sectors 

In 2020, California was the most popular destination for Taiwan tourists in the United States by far, with more than half of all Taiwan tourists visiting the state, followed by Washington state and New York state.  The top American cities for Taiwan tourists are Los Angeles, San Francisco, New York City, Las Vegas, Seattle, San Jose, Chicago, Boston, San Diego, and Anaheim. New attractions in other American gateway cities could be highly successful among Taiwan tourists.   

In 2020, Taiwan visitors enjoyed a diverse range of activities in the United States including shopping (88%), sightseeing (69%), fine dining (40%), visiting national parks/monuments (29%) visiting small towns/the countryside (29%), visiting art galleries/museums (15%), and visiting historical locations, cultural/ethnic heritage sites, casinos/gaming, ad etc.  

The main sources of travel information for Taiwan tourists are airlines (44%), personal recommendations (41%), travel agency offices (21%), travel guides (19%), online travel agencies (19%), and corporate travel departments (8%).   

Opportunities 

American travel agencies can be directly represented in Taiwan by a representative office or by designating a General Sales Agent (GSA). They can also work with airlines and state tourism promotion organizations to conduct familiarization tours for Taiwanese tour guides and media personnel. Partnerships with these travel tour guides and media personnel are an efficient way to promote new American destinations, attractions, hotels, and restaurants to Taiwan tourists. 

The Taiwan travel and tourism industry is increasingly digitized.  Taking advantage of this trend and Taiwan’s high internet penetration rate (93%), CS Taiwan has supported U.S. Convention and Tourism Bureaus by running eCommerce promotion initiatives, webinars and social media campaigns in Taiwan for their destinations and attractions.  

The U.S. Commercial Service in Taiwan also offers other cost-effective services such as Single Company Promotion (SCP) or Gold Key Matching Service (GKS) to help American destinations or suppliers to expand their presence in Taiwan, or to find the right sales agents. 

Major Air Routes to the United States and Hubs  

Before the COVID-19 pandemic, there were about 800 weekly flights between Taiwan and the U.S., including 110 direct flights from Taiwan to U.S. gateway cities. Over the past two years, flight frequency from Taiwan to the United States is gradually returning to its pre-pandemic level. By the end of 2023, the number of flights between Taiwan and the U.S. is projected to return to at least 80% of its pre-COVID 19 level.  United Airlines provides daily services from Taiwan to the United States via Japan and operates daily non-stop service from Taipei’s Taoyuan Airport to San Francisco. Taiwan carrier EVA Air recently announced it will offer three flights a day between Taoyuan to Los Angeles and San Francisco. EVA Air also plans to increase its number of weekly flights from Taoyuan to Chicago from three to seven. China Airlines currently provides daily flights to San Francisco and Vancouver and operates 17 flights a week to the greater Los Angeles area.

In April 2023, the newly established Taiwan airline company, STARLUX Airlines, launched its first long-haul route from Taoyuan to Los Angeles, which will offer daily flights. The company is planning to open a route to San Francisco by the end of 2023.  

The travel situation from Taiwan to the U.S. after COVID-19  

In October 2022, Taiwan eased border controls and eliminated the quarantine requirement for foreign arrivals. In 2022, the cap on foreign arrivals tripled from the year before to more than 130 thousand.   

U.S. Customs and Border Protection office ended quarantine and full-vaccination requirements for foreign visitors in March 2023. The National Travel and Tourism Office of the U.S. Department of Commerce estimates that the easing of these restrictions will lead to a 139% increase in inbound travelers from Taiwan to the United States. 

The return of Taiwanese students for in-person programs is further spurring Taiwanese travel to the United States. While visiting friends/family studying in the United States, many Taiwanese also seek out local U.S. tours.  

Despite price spikes in the U.S., on a recent survey Taiwanese travelers expressed a willingness to pay more when traveling internationally: 72 percent of the interviewees are willing to spend more than they spent on their last overseas trip; among those, 85 percent would accept a 20 percent increase, and 12 percent would accept a 21 percent to 40 percent price increase. 

Web Resources 

• National Travel and Tourism Office  
• Discover America Committee in Taiwan (http://www.discoveramerica.org.tw/PDF/DAC_Membership.pdf)
• Brand USA Taiwan Representative Office (http://www.gousa.tw/)
• Tourism Bureau, Ministry of Transportation and Communications   
• Taipei Tourism Exposition Organizer (https://www.tite.com.tw/en/)
• Taipei International Travel Fair Organizer  

Establishing an Office  

When establishing a subsidiary, branch, or representative office in Taiwan, there are logistical issues to consider and an array of forms and procedures to complete. A Chinese language company name is also required. It is strongly recommended that new firms consult with local attorneys and accountants to identify relevant industry issues and complete all necessary steps for establishing a new entity.   

The Ministry of Economic Affairs (MOEA) provides information on investing and setting up a company in Taiwan through the InvesTaiwan office. InvesTaiwan can also be reached by phone at +886-2-2311-2031. 

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What is Taiwan’s greatest contributor to its GDP?

As an Ecotourism Specialist, I have had the opportunity to explore Taiwan’s unique and diverse landscape. It is a country that offers a wide range of natural wonders, cultural heritage, and exciting outdoor activities. One aspect that contributes significantly to Taiwan’s economy is its thriving tourism industry. In this article, I will delve deep into the various factors that make Taiwan’s tourism industry a vital contributor to its GDP.

The Role of Tourism in Taiwan’s GDP

Tourism plays a significant role in Taiwan’s economy, contributing a substantial proportion to its GDP. With its breathtaking natural beauty, rich cultural heritage, and advanced infrastructure, Taiwan has become an attractive destination for travelers from all over the world. In recent years, the government has invested heavily in promoting tourism, resulting in a steady increase in both domestic and international tourists. This surge in tourist arrivals has had a positive impact on Taiwan’s GDP.

Sustainable Tourism Practices

Taiwan is renowned for its commitment to sustainable tourism practices. Recognizing the importance of preserving its natural resources and cultural heritage, the country has implemented strict regulations and policies to ensure responsible tourism. This approach has not only protected the environment but has also generated revenue through ecotourism initiatives. Ecotourism, which focuses on responsible travel and environmental conservation, has become a significant contributor to Taiwan’s GDP.

Natural Attractions and Ecotourism

Taiwan’s diverse natural landscape offers a wide range of attractions for outdoor enthusiasts and nature lovers. From towering peaks to stunning coastlines, lush forests to serene lakes, Taiwan has it all. These natural wonders have become popular ecotourism destinations, attracting both domestic and international visitors. Hiking, cycling, bird watching, and exploring national parks have become popular activities, contributing to the overall tourism GDP.

Cultural Tourism and Heritage Sites

In addition to its natural attractions, Taiwan is home to a rich cultural heritage. The country boasts numerous historical sites, temples, and traditional villages that offer visitors a glimpse into its vibrant past. Cultural tourism has gained traction in recent years, with tourists seeking immersive experiences and a deeper understanding of Taiwan’s traditions and customs. This form of tourism has become a significant contributor to Taiwan’s GDP.

Food and Culinary Tourism

Taiwan’s culinary scene is renowned worldwide, offering a unique blend of flavors and influences from various cultures. From night markets to street food stalls, Taiwan’s food culture is a major draw for tourists. Food and culinary tourism have experienced significant growth, with visitors flocking to experience the diverse and delicious cuisine that Taiwan has to offer. This sector has become a significant contributor to the country’s tourism GDP.

Medical Tourism

Taiwan has also emerged as a popular destination for medical tourism. With its advanced healthcare facilities, skilled medical professionals, and affordable treatment options, the country has attracted a growing number of international patients. From cosmetic surgery to wellness retreats, medical tourism has become a lucrative industry, contributing to Taiwan’s overall GDP.

Frequently Asked Questions

1. What are the top tourist attractions in Taiwan? 2. How has Taiwan promoted sustainable tourism? 3. What are some popular ecotourism destinations in Taiwan? 4. Which cultural sites should visitors explore in Taiwan? 5. Why is Taiwan’s food culture so popular among tourists? 6. How has medical tourism contributed to Taiwan’s GDP? 7. What measures has the government taken to support the tourism industry? 8. How has COVID-19 affected Taiwan’s tourism sector?

In conclusion, Taiwan’s tourism industry is a significant contributor to its GDP, thanks to its natural attractions, cultural heritage, sustainable practices, and culinary delights. The country’s commitment to responsible tourism has not only protected its environment but has also helped generate revenue through ecotourism initiatives. With its vast array of tourist attractions and ongoing efforts to promote the industry, Taiwan will continue to thrive as a top destination for travelers around the world.

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Wed, May 01, 2024 page1

Exports drive taiwan’s first-quarter 6.51% gdp growth.

• By Crystal Hsu / Staff reporter

Taiwan’s economy last quarter expanded 6.51 percent from a year earlier, beating the government’s February prediction by 0.59 percentage points, thanks to stronger-than-expected exports, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday, citing its advance estimate report.

The showing was the best in 11 quarters and would raise GDP growth for this year from 3.43 percent to 3.57 percent in the absence of major shocks, DGBAS official Wang Tsui-hua (王翠華) said.

The statistics agency is due to revise its official growth projection later this month.

Shoppers browse inside a department store in Taipei yesterday.

Photo: Ritchie B. Tongo, EPA-EFE

Exports of goods and services surged 10.21 percent during the January-to-March period, higher than the forecast by 2.8 percentage points, as global demand for artificial intelligence applications flourished, Wang told a news conference in Taipei.

Imports expanded 2.16 percent, reversing an expected decline, as firms bought more raw materials for export manufacturing, DGBAS said.

In all, external demand contributed 5.46 percentage points to the first-quarter economic performance, Wang said.

Domestically, private consumption grew 4.14 percent, as retail sales increased 3.1 percent while restaurant revenues hiked 8.08 percent, buoyed by the Lunar New Year holiday, she said.

A pickup in property deals gave a boost to the sales of home appliances, furniture and decoration products, while an equity rally drove up incomes and brokerage fees for securities houses, Wang said.

Outbound travel soared 93.97 percent in terms of tourist visits, but the surge had a very limited impact on GDP, she said.

Taiwan has consistently displayed a tourism deficit, except during the COVID-19 pandemic when border controls were in place, Wang said.

Outbound travel last year recovered 85 percent of its pre-pandemic volume should continue to improve, she said, adding that the uptrend would squeeze domestic tourism.

Government spending and capital formation underperformed with a small increase of 1.26 percent and a decline of 4.47 percent respectively, the DGBAS said.

In particular, purchases of capital equipment shrank 18.67 percent year-on-year, indicating that Taiwanese companies were cautious about capital expenditures due to lukewarm end-market demand, Wang said.

Altogether, domestic demand registered a mild 1.16 percent increase, leaving exports to be the main growth driver.

Compared with the preceding quarter, GDP growth expanded 1.13 percent after seasonal adjustments, the agency said.

The impressive year-on-year advance also had to do with a low base that would fade away quarter by quarter, Wang said.

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Gross domestic product (GDP) in Taiwan 2028

Taiwan: gross domestic product (gdp) in current prices from 1987 to 2028 (in billion u.s. dollars).

Additional Information

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October 2023

1987 to 2022

* Estimate. Figures have been rounded for better understanding of the statistic.

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Taiwan's export dependence on China drops to 22-year low

China's economic slowdown, shifting supply chains narrow share of exports

TAIPEI -- China accounted for 30.7% of Taiwan's exports for the first four months of the year, nearing a low last seen more than two decades ago for the island's biggest trading partner.

Exports to China fell 3.7% on the year to $45.3 billion in January-April goods trade data released Wednesday by the Ministry of Finance here. Hong Kong is counted as part of China.

Taiwan trade czar seeks new deals, braces for possible Trump win

Taiwan's sunflower protest legacy looms large for incoming president lai, apple moves closer to china despite supply chain shifts, trump ex-envoy 'reassures' taiwan on u.s. support against 'belligerent' xi, thailand smiles at both taiwan and china as it courts ev investment, taiwan hails u.s.-japan-philippines ties as 'great deterrent' to china, taiwan's export reliance on chinese market falls to 21-year low, china to lift taiwan tourism restrictions for fujian residents, taiwan's post-bubble recovery holds lessons for china, latest on trade, china's exports return to growth, rising 1.5% in april, new zealand and uae launch talks for a free trade deal, south korea exports rise for 7th month in row on growing chip demand, sponsored content, about sponsored content this content was commissioned by nikkei's global business bureau..

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

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Adapt, Change, and Evolve Seeing opportunity in adversity to create new value in the tourism industry

The outbreak of the global COVID-19 pandemic over a year ago plunged the international tour-ism market into a virtual ice age. Global tourism demand plummeted in 2020 as nations enacted travel restrictions. The number of international tourism trips fell by an estimated one billion-plus globally, pulling down tourism revenue by more than US$930 billion. In the Asia-Pacific region, which was hit first and hardest by the pandemic, the number of international inbound tourists fell by more than 300 million from 2019. The pandemic reduced the number of inbound tourist visits to Taiwan to 1,377,861 in 2020, down by 88.9% from 2019.

Facing the uncertain development of the pandemic, the Tourism Bureau established a COVID-19 response team. It also formulated related response measures and contingency mechanisms early in the outbreak in coordination with Central Epidemic Command Center prevention measures. We are thankful that the tourism industry cooperated with government policies and prevention measures. During the pandemic, the industry suspended outbound and inbound group tours. It made hotel facilities available to meet surging demand for quarantine space. It also carried out crowd control measures at major scenic spots, night markets and other public areas. Through its full cooperation with pandemic prevention measures, the tourism industry helped to control the outbreak and protect public health. The devotion of all of my colleagues at the Tourism Bureau to relief work was also vital to the industry's ability to quickly access financial support. Our team also implemented COVID prevention measures to ensure that our Bureau's normal operations were not interrupted.

In 2020, COVID-19 struck the tourism industry with an unprecedented shock. It was truly a very difficult year. The Tourism Bureau has always been a firm and strong supporter of the tourism industry. In addition to promoting salary and operating subsidies and other relief programs to re-duce the operational pressure on the industry, we continued to promote a three-stage tourism plan of "anti-epidemic travel," "safe travel," and "post-pandemic tourism readiness." Measures taken to revitalize domestic tourism and boost the international travel market in a stable and orderly man-ner spurred 18.46 million people to travel and created direct and indirect tourism benefits of NT$65.4 billion. This added momentum to domestic tourism demand in the food, lodging, travel, shopping, and transportation sectors. In addition to stabilizing industry operations, the Bureau laid a foundation for digitally transforming the tourism sector by arranging cross-professional seed training and accelerating the establishment of digital thinking in the industry to strengthen marketing of the industry's post-pandemic digital transformation. It also provided guidance to the industry in transforming and developing domestic tourism operations and innovating new travel products. Taiwan led the world in resuming international cruise trips with the launch of the "Is-land Hopping Tour," driving a new wave of island-hopping tourism and helped the tourism in-dustry to transform and create new value. We hope to join forces with the industry to weather the pandemic and show the resilience and development potential of Taiwan's tourism sector. In 2020, the number of travel agency head offices increased by 49, the number of hotels by 546, and the number of rooms by 4,426 compared to 2019.

The Organization for Economic Co-operation and Development (OECD) has described COVID-19 as a once-in-a-lifetime opportunity for the tourism industry to develop a more sustainable and resilient business model. The pandemic will eventually end. To create a more competitive tourism industry, we will continue to be guided by the Executive Yuan's "Taiwan Tourism 2030: Taiwan Tourism Policy White Paper" and move forward in accordance with the Taiwan Tourism 2025 campaign. We will also adjust our strategic layout in response to pandemic developments as "do-mestic tourism stimulus in the early phase (2021-2022) and international tourism development in the later phase (2023-2025)." I hope we can all work together to transform and weather this dif-ficult time, honing basic skills during the pandemic and, once COVID has passed, promptly tap-ping international markets and accelerating the industry's recovery. We have an excellent oppor-tunity to move from the front lines of the pandemic to the front row of a beautiful outlook ahead.

With the publication of this annual report, we hope to compose a picture of the joint efforts of the Tourism Bureau and tourism industry in the face of the pandemic in 2020. The report presents the resilience and innovation of Taiwan's tourism industry as a stepping stone to future prospects and the transformation of this challenging time into new momentum for future tourism promotion.

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A Plan to Remake the Middle East

While talks for a cease-fire between israel and hamas continue, another set of negotiations is happening behind the scenes..

This transcript was created using speech recognition software. While it has been reviewed by human transcribers, it may contain errors. Please review the episode audio before quoting from this transcript and email [email protected] with any questions.

From New York Times, I’m Michael Barbaro. This is The Daily.

[MUSIC CONTINUES]

Today, if and when Israel and Hamas reach a deal for a ceasefire fire, the United States will immediately turn to a different set of negotiations over a grand diplomatic bargain that it believes could rebuild Gaza and remake the Middle East. My colleague Michael Crowley has been reporting on that plan and explains why those involved in it believe they have so little time left to get it done.

It’s Wednesday, May 8.

Michael, I want to start with what feels like a pretty dizzying set of developments in this conflict over the past few days. Just walk us through them?

Well, over the weekend, there was an intense round of negotiations in an effort, backed by the United States, to reach a ceasefire in the Gaza war.

The latest ceasefire proposal would reportedly see as many as 33 Israeli hostages released in exchange for potentially hundreds of Palestinian prisoners.

US officials were very eager to get this deal.

Pressure for a ceasefire has been building ahead of a threatened Israeli assault on Rafah.

Because Israel has been threatening a military offensive in the Southern Palestinian city of Rafah, where a huge number of people are crowded.

Fleeing the violence to the North. And now they’re packed into Rafah. Exposed and vulnerable, they need to be protected.

And the US says it would be a humanitarian catastrophe on top of the emergency that’s already underway.

Breaking news this hour — very important breaking news. An official Hamas source has told The BBC that it does accept a proposal for a ceasefire deal in Gaza.

And for a few hours on Monday, it looked like there might have been a major breakthrough when Hamas put out a statement saying that it had accepted a negotiating proposal.

Israeli Prime Minister Benjamin Netanyahu says the ceasefire proposal does not meet his country’s requirements. But Netanyahu says he will send a delegation of mediators to continue those talks. Now, the terms —

But those hopes were dashed pretty quickly when the Israelis took a look at what Hamas was saying and said that it was not a proposal that they had agreed to. It had been modified.

And overnight —

Israeli troops stormed into Rafah. Video showing tanks crashing over a sign at the entrance of the city.

— the Israelis launched a partial invasion of Rafah.

It says Hamas used the area to launch a deadly attack on Israeli troops over the weekend.

And they have now secured a border crossing at the Southern end of Gaza and are conducting targeted strikes. This is not yet the full scale invasion that President Biden has adamantly warned Israel against undertaking, but it is an escalation by Israel.

So while all that drama might suggest that these talks are in big trouble, these talks are very much still alive and ongoing and there is still a possibility of a ceasefire deal.

And the reason that’s so important is not just to stop the fighting in Gaza and relieve the suffering there, but a ceasefire also opens the door to a grand diplomatic bargain, one that involves Israel and its Arab neighbors and the Palestinians, and would have very far-reaching implications.

And what is that grand bargain. Describe what you’re talking about?

Well, it’s incredibly ambitious. It would reshape Israel’s relationship with its Arab neighbors, principally Saudi Arabia. But it’s important to understand that this is a vision that has actually been around since well before October 7. This was a diplomatic project that President Biden had been investing in and negotiating actually in a very real and tangible way long before the Hamas attacks and the Gaza war.

And President Biden was looking to build on something that President Trump had done, which was a series of agreements that the Trump administration struck in which Israel and some of its Arab neighbors agreed to have normal diplomatic relations for the first time.

Right, they’re called the Abraham Accords.

That’s right. And, you know, Biden doesn’t like a lot of things, most things that Trump did. But he actually likes this, because the idea is that they contribute to stability and economic integration in the Middle East, the US likes Israel having friends and likes having a tight-knit alliance against Iran.

President Biden agrees with the Saudis and with the Israelis, that Iran is really the top threat to everybody here. So, how can you build on this? How can you expand it? Well, the next and biggest step would be normalizing relations between Israel and Saudi Arabia.

And the Saudis have made clear that they want to do this and that they’re ready to do this. They weren’t ready to do it in the Trump years. But Mohammed bin Salman, the Crown Prince of Saudi Arabia, has made clear he wants to do it now.

So this kind of triangular deal began to take shape before October 7, in which the US, Israel, and Saudi Arabia would enter this three way agreement in which everyone would get something that they wanted.

And just walk through what each side gets in this pre-October 7th version of these negotiations?

So for Israel, you get normalized ties with its most important Arab neighbor and really the country that sets the tone for the whole Muslim world, which is Saudi Arabia of course. It makes Israel feel safer and more secure. Again, it helps to build this alliance against Iran, which Israel considers its greatest threat, and it comes with benefits like economic ties and travel and tourism. And Prime Minister Benjamin Netanyahu has been very open, at least before October 7th, that this was his highest diplomatic and foreign policy priority.

For the Saudis, the rationale is similar when it comes to Israel. They think that it will bring stability. They like having a more explicitly close ally against Iran. There are economic and cultural benefits. Saudi Arabia is opening itself up in general, encouraging more tourism.

But I think that what’s most important to the Crown Prince, Mohammed bin Salman, is what he can get from the United States. And what he has been asking for are a couple of essential things. One is a security agreement whose details have always been a little bit vague, but I think essentially come down to reliable arms supplies from the United States that are not going to be cut off or paused on a whim, as he felt happened when President Biden stopped arms deliveries in 2021 because of how Saudi was conducting its war in Yemen. The Saudis were furious about that.

Saudi Arabia also wants to start a domestic nuclear power program. They are planning for a very long-term future, possibly a post-oil future. And they need help getting a nuclear program off the ground.

And they want that from the US?

And they want that from the US.

Now, those are big asks from the us. But from the perspective of President Biden, there are some really enticing things about this possible agreement. One is that it will hopefully produce more stability in the region. Again, the US likes having a tight-knit alliance against Iran.

The US also wants to have a strong relationship with Saudi Arabia. You know, despite the anger at Mohammed bin Salman over the murder of the Saudi dissident Jamal Khashoggi, the Biden administration recognizes that given the Saudis control over global oil production and their strategic importance in the Middle East, they need to have a good relationship with them. And the administration has been worried about the influence of China in the region and with the Saudis in particular.

So this is an opportunity for the US to draw the Saudis closer. Whatever our moral qualms might be about bin Salman and the Saudi government, this is an opportunity to bring the Saudis closer, which is something the Biden administration sees as a strategic benefit.

All three of these countries — big, disparate countries that normally don’t see eye-to-eye, this was a win-win-win on a military, economic, and strategic front.

That’s right. But there was one important actor in the region that did not see itself as winning, and that was the Palestinians.

[MUSIC PLAYING]

First, it’s important to understand that the Palestinians have always expected that the Arab countries in the Middle East would insist that Israel recognize a Palestinian state before those countries were willing to essentially make total peace and have normal relations with Israel.

So when the Abraham Accords happened in the Trump administration, the Palestinians felt like they’d been thrown under the bus because the Abraham Accords gave them virtually nothing. But the Palestinians did still hold out hope that Saudi Arabia would be their savior. And for years, Saudi Arabia has said that Israel must give the Palestinians a state if there’s going to be a normal relationship between Israel and Saudi Arabia.

Now the Palestinians see the Saudis in discussions with the US and Israel about a normalization agreement, and there appears to be very little on offer for the Palestinians. And they are feeling like they’re going to be left out in the cold here.

Right. And in the minds of the Palestinians, having already been essentially sold out by all their other Arab neighbors, the prospect that Saudi Arabia, of all countries, the most important Muslim Arab country in the region, would sell them out, had to be extremely painful.

It was a nightmare scenario for them. And in the minds of many analysts and US officials, this was a factor, one of many, in Hamas’s decision to stage the October 7th attacks.

Hamas, like other Palestinian leaders, was seeing the prospect that the Middle East was moving on and essentially, in their view, giving up on the Palestinian cause, and that Israel would be able to have friendly, normal relations with Arab countries around the region, and that it could continue with hardline policies toward the Palestinians and a refusal, as Prime Minister Benjamin Netanyahu has said publicly, to accept a Palestinian state.

Right. So Michael, once Hamas carries out the October 7th attacks in an effort to destroy a status quo that it thinks is leaving them less and less relevant, more and more hopeless, including potentially this prospect that Saudi Arabia is going to normalize relations with Israel, what happens to these pre-October 7th negotiations between the US, Saudi Arabia, and Israel?

Well, I think there was a snap assumption that these talks were dead and buried. That they couldn’t possibly survive a cataclysm like this.

But then something surprising happened. It became clear that all the parties were still determined to pull-off the normalization.

And most surprisingly of all, perhaps, was the continued eagerness of Saudi Arabia, which publicly was professing outrage over the Israeli response to the Hamas attacks, but privately was still very much engaged in these conversations and trying to move them forward.

And in fact, what has happened is that the scope of this effort has grown substantially. October 7th didn’t kill these talks. It actually made them bigger, more complicated, and some people would argue, more important than ever.

We’ll be right back.

Michael, walk us through what exactly happens to these three-way negotiations after October 7th that ends up making them, as you just said, more complicated and more important than ever?

Well, it’s more important than ever because of the incredible need in Gaza. And it’s going to take a deal like this and the approval of Saudi Arabia to unlock the kind of massive reconstruction project required to essentially rebuild Gaza from the rubble. Saudi Arabia and its Arab friends are also going to be instrumental in figuring out how Gaza is governed, and they might even provide troops to help secure it. None of those things are going to happen without a deal like this.

Fascinating.

But this is all much more complicated now because the price for a deal like this has gone up.

And by price, you mean?

What Israel would have to give up. [MUSIC PLAYING]

From Saudi Arabia’s perspective, you have an Arab population that is furious at Israel. It now feels like a really hard time to do a normalization deal with the Israelis. It was never going to be easy, but this is about as bad a time to do it as there has been in a generation at least. And I think that President Biden and the people around him understand that the status quo between Israel and the Palestinians is intolerable and it is going to lead to chaos and violence indefinitely.

So now you have two of the three parties to this agreement, the Saudis and the Americans, basically asking a new price after October 7th, and saying to the Israelis, if we’re going to do this deal, it has to not only do something for the Palestinians, it has to do something really big. You have to commit to the creation of a Palestinian state. Now, I’ll be specific and say that what you hear the Secretary of State, Antony Blinken, say is that the agreement has to include an irreversible time-bound path to a Palestinian state.

We don’t know exactly what that looks like, but it’s some kind of a firm commitment, the likes of which the world and certainly the Israelis have not made before.

Something that was very much not present in the pre-October 7th vision of this negotiation. So much so that, as we just talked about, the Palestinians were left feeling completely out in the cold and furious at it.

That’s right. There was no sign that people were thinking that ambitiously about the Palestinians in this deal before October 7th. And the Palestinians certainly felt like they weren’t going to get much out of it. And that has completely changed now.

So, Michael, once this big new dimension after October 7th, which is the insistence by Saudi Arabia and the US that there be a Palestinian state or a path to a Palestinian state, what is the reaction specifically from Israel, which is, of course, the third major party to this entire conversation?

Well, Israel, or at least its political leadership, hates it. You know, this is just an extremely tough sell in Israel. It would have been a tough sell before October 7th. It’s even harder now.

Prime Minister Benjamin Netanyahu is completely unrepentantly open in saying that there’s not going to be a Palestinian state on his watch. He won’t accept it. He says that it’s a strategic risk to his country. He says that it would, in effect, reward Hamas.

His argument is that terrorism has forced a conversation about statehood onto the table that wasn’t there before October 7th. Sure, it’s always in the background. It’s a perennial issue in global affairs, but it was not something certainly that the US and Israel’s Arab neighbors were actively pushing. Netanyahu also has — you know, he governs with the support of very right-wing members of a political coalition that he has cobbled together. And that coalition is quite likely to fall apart if he does embrace a Palestinian state or a path to a Palestinian state.

Now, he might be able to cobble together some sort of alternative, but it creates a political crisis for him.

And finally, you know, I think in any conversation about Israel, it’s worth bearing in mind something you hear from senior US officials these days, which is that although there is often finger pointing at Netanyahu and a desire to blame Netanyahu as this obstructionist who won’t agree to deals, what they say is Netanyahu is largely reflecting his population and the political establishment of his country, not just the right-wingers in his coalition who are clearly extremist.

But actually the prevailing views of the Israeli public. And the Israeli public and their political leaders across the spectrum right now with few exceptions, are not interested in talking about a Palestinian state when there are still dozens and dozens of Israeli hostages in tunnels beneath Gaza.

So it very much looks like this giant agreement that once seemed doable before October 7th might be more important to everyone involved than ever, given that it’s a plan for rebuilding Gaza and potentially preventing future October 7th’s from happening, but because of this higher price that Israel would have to pay, which is the acceptance of a Palestinian state, it seems from everything you’re saying, that this is more and more out of reach than ever before and hard to imagine happening in the immediate future. So if the people negotiating it are being honest, Michael, are they ready to acknowledge that it doesn’t look like this is going to happen?

Well, not quite yet. As time goes by, they certainly say it’s getting harder and harder, but they’re still trying, and they still think there’s a chance. But both the Saudis and the Biden administration understand that there’s very little time left to do this.

Well, what do you mean there’s very little time left? It would seem like time might benefit this negotiation in that it might give Israel distance from October 7th to think potentially differently about a Palestinian state?

Potentially. But Saudi Arabia wants to get this deal done in the Biden administration because Mohammed bin Salman has concluded this has to be done under a Democratic president.

Because Democrats in Congress are going to be very reluctant to approve a security agreement between the United States and Saudi Arabia.

It’s important to understand that if there is a security agreement, that’s something Congress is going to have to approve. And you’re just not going to get enough Democrats in Congress to support a deal with Saudi Arabia, who a lot of Democrats don’t like to begin with, because they see them as human rights abusers.

But if a Democratic president is asking them to do it, they’re much more likely to go along.

Right. So Saudi Arabia fears that if Biden loses and Trump is president, that those same Democrats would balk at this deal in a way that they wouldn’t if it were being negotiated under President Biden?

Exactly. Now, from President Biden’s perspective, politically, think about a president who’s running for re-election, who is presiding right now over chaos in the Middle East, who doesn’t seem to have good answers for the Israeli-Palestinian question, this is an opportunity for President Biden to deliver what could be at least what he would present as a diplomatic masterstroke that does multiple things at once, including creating a new pathway for Israel and the Palestinians to coexist, to break through the logjam, even as he is also improving Israel’s relations with Saudi Arabia.

So Biden and the Crown Prince hope that they can somehow persuade Bibi Netanyahu that in spite of all the reasons that he thinks this is a terrible idea, that this is a bet worth taking on Israel’s and the region’s long-term security and future?

That’s right. Now, no one has explained very clearly exactly how this is going to work, and it’s probably going to require artful diplomacy, possibly even a scenario where the Israelis would agree to something that maybe means one thing to them and means something else to other people. But Biden officials refuse to say that it’s hopeless and they refuse to essentially take Netanyahu’s preliminary no’s for an answer. And they still see some way that they can thread this incredibly narrow needle.

Michael, I’m curious about a constituency that we haven’t been talking about because they’re not at the table in these discussions that we are talking about here. And that would be Hamas. How does Hamas feel about the prospect of such a deal like this ever taking shape. Do they see it as any kind of a victory and vindication for what they did on October 7th?

So it’s hard to know exactly what Hamas’s leadership is thinking. I think they can feel two things. I think they can feel on the one hand, that they have established themselves as the champions of the Palestinian people who struck a blow against Israel and against a diplomatic process that was potentially going to leave the Palestinians out in the cold.

At the same time, Hamas has no interest in the kind of two-state solution that the US is trying to promote. They think Israel should be destroyed. They think the Palestinian state should cover the entire geography of what is now Israel, and they want to lead a state like that. And that’s not something that the US, Saudi Arabia, or anyone else is going to tolerate.

So what Hamas wants is to fight, to be the leader of the Palestinian people, and to destroy Israel. And they’re not interested in any sort of a peace process or statehood process.

It seems very clear from everything you’ve said here that neither Israel nor Hamas is ready to have the conversation about a grand bargain diplomatic program. And I wonder if that inevitably has any bearing on the ceasefire negotiations that are going on right now between the two of them that are supposed to bring this conflict to some sort of an end, even if it’s just temporary?

Because if, as you said, Michael, a ceasefire opens the door to this larger diplomatic solution, and these two players don’t necessarily want that larger diplomatic solution, doesn’t that inevitably impact their enthusiasm for even reaching a ceasefire?

Well, it certainly doesn’t help. You know, this is such a hellish problem. And of course, you first have the question of whether Israel and Hamas can make a deal on these immediate issues, including the hostages, Palestinian prisoners, and what the Israeli military is going to do, how long a ceasefire might last.

But on top of that, you have these much bigger diplomatic questions that are looming over them. And it’s not clear that either side is ready to turn and face those bigger questions.

So while for the Biden administration and for Saudi Arabia, this is a way out of this crisis, these larger diplomatic solutions, it’s not clear that it’s a conversation that the two parties that are actually at war here are prepared to start having.

Well, Michael, thank you very much. We appreciate it.

On Tuesday afternoon, under intense pressure from the US, delegations from Israel and Hamas arrived in Cairo to resume negotiations over a potential ceasefire. But in a statement, Israel’s Prime Minister Benjamin Netanyahu made clear that even with the talks underway, his government would, quote, “continue to wage war against Hamas.”

Here’s what else you need to know today. In a dramatic day of testimony, Stormy Daniels offered explicit details about an alleged sexual encounter with Donald Trump that ultimately led to the hush money payment at the center of his trial. Daniels testified that Trump answered the door in pajamas, that he told her not to worry that he was married, and that he did not use a condom when they had sex.

That prompted lawyers for Trump to seek a mistrial based on what they called prejudicial testimony. But the judge in the case rejected that request. And,

We’ve seen a ferocious surge of anti-Semitism in America and around the world.

In a speech on Tuesday honoring victims of the Holocaust, President Biden condemned what he said was the alarming rise of anti-Semitism in the United States after the October 7th attacks on Israel. And he expressed worry that too many Americans were already forgetting the horrors of that attack.

The Jewish community, I want you to know I see your fear, your hurt, and your pain. Let me reassure you, as your president, you’re not alone. You belong. You always have and you always will.

Today’s episode was produced by Nina Feldman, Clare Toeniskoetter, and Rikki Novetsky. It was edited by Liz O. Baylen, contains original music by Marion Lozano, Elisheba Ittoop, and Dan Powell, and was engineered by Alyssa Moxley. Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly.

That’s it for The Daily. I’m Michael Barbaro. See you tomorrow.

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Hosted by Michael Barbaro

Featuring Michael Crowley

Produced by Nina Feldman ,  Clare Toeniskoetter and Rikki Novetsky

Edited by Liz O. Baylen

Original music by Marion Lozano ,  Elisheba Ittoop and Dan Powell

Engineered by Alyssa Moxley

Listen and follow The Daily Apple Podcasts | Spotify | Amazon Music | YouTube

If and when Israel and Hamas reach a deal for a cease-fire, the United States will immediately turn to a different set of negotiations over a grand diplomatic bargain that it believes could rebuild Gaza and remake the Middle East.

Michael Crowley, who covers the State Department and U.S. foreign policy for The Times, explains why those involved in this plan believe they have so little time left to get it done.

On today’s episode

Michael Crowley , a reporter covering the State Department and U.S. foreign policy for The New York Times.

Background reading :

Talks on a cease-fire in the Gaza war are once again at an uncertain stage .

Here’s how the push for a deal between Israel and Saudi Arabia looked before Oct. 7 .

From early in the war, President Biden has said that a lasting resolution requires a “real” Palestinian state .

Here’s what Israeli officials are discussing about postwar Gaza.

There are a lot of ways to listen to The Daily. Here’s how.

We aim to make transcripts available the next workday after an episode’s publication. You can find them at the top of the page.

The Daily is made by Rachel Quester, Lynsea Garrison, Clare Toeniskoetter, Paige Cowett, Michael Simon Johnson, Brad Fisher, Chris Wood, Jessica Cheung, Stella Tan, Alexandra Leigh Young, Lisa Chow, Eric Krupke, Marc Georges, Luke Vander Ploeg, M.J. Davis Lin, Dan Powell, Sydney Harper, Mike Benoist, Liz O. Baylen, Asthaa Chaturvedi, Rachelle Bonja, Diana Nguyen, Marion Lozano, Corey Schreppel, Rob Szypko, Elisheba Ittoop, Mooj Zadie, Patricia Willens, Rowan Niemisto, Jody Becker, Rikki Novetsky, John Ketchum, Nina Feldman, Will Reid, Carlos Prieto, Ben Calhoun, Susan Lee, Lexie Diao, Mary Wilson, Alex Stern, Dan Farrell, Sophia Lanman, Shannon Lin, Diane Wong, Devon Taylor, Alyssa Moxley, Summer Thomad, Olivia Natt, Daniel Ramirez and Brendan Klinkenberg.

Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly. Special thanks to Sam Dolnick, Paula Szuchman, Lisa Tobin, Larissa Anderson, Julia Simon, Sofia Milan, Mahima Chablani, Elizabeth Davis-Moorer, Jeffrey Miranda, Renan Borelli, Maddy Masiello, Isabella Anderson and Nina Lassam.

Michael Crowley covers the State Department and U.S. foreign policy for The Times. He has reported from nearly three dozen countries and often travels with the secretary of state. More about Michael Crowley

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