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Free Trade with Free China

Instead of worrying about Beijing, the U.S. should let Taiwan into the WTO

Nov 8, 1999, Vol. 5, No. 08 • By GREG MASTEL
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The fate of China's effort to join the World Trade Organization is unclear; matters involving internal deliberations in Beijing usually are. There is always the possibility that China is waiting until the last minute to wrap up WTO negotiations, hoping that the Clinton administration's desire to build a record of achievement for its engagement policy will force Washington to lower the bar for WTO membership. The emerging consensus, however, seems to be that China is simply unwilling to tackle the domestic reforms that WTO membership requires.

In the spirit of "If I don't win, I'll take my ball and go home," China is also insisting that if it cannot become a WTO member, Taiwan cannot be allowed to join either. Surprisingly, the United States seems willing to tolerate this Chinese petulance, though doing so runs directly counter to U.S. interests. The United States should press for Taiwan's membership in upcoming WTO negotiations whether or not China is admitted.

This latest example of a convoluted and counterproductive stance toward the greater China region is but one of many strange results of the "one China" policy. Since its establishment in the 1970s, virtually every major assumption underlying the one China policy has dramatically changed: The Soviet Union has collapsed, ending the Cold War; Taipei has transformed itself from an authoritarian regime to a functioning democracy; and Beijing has moved from being a questionable ally to a possible enemy.

Still, the one China policy persists largely unchanged, and Beijing expresses outrage at even the smallest evolution in U.S. relations with Taiwan, as demonstrated by the yearlong tantrum following the visit of Taiwan's President Lee to his U.S. alma mater. As a result of this policy, the United States continues to refuse to allow senior Taiwanese officials to visit the United States or even leave their planes while they are refueling in Hawaii, senior U.S. officials are generally not allowed to visit Taiwan, and this summer the United States effectively sided with Beijing against Taipei when President Lee suggested that some changes in the Beijing-Taipei dialogue were long overdue.

Now the State Department seems poised to acquiesce to another unreasonable PRC demand pertaining to Taiwan. While China's unwillingness to embrace economic reforms such as opening its market to agricultural and manufactured imports and reforming state-owned enterprises has slowed its WTO application to a near standstill, Taiwan's application has moved along smoothly. From the outset of accession talks, Taipei agreed to accept the full WTO disciplines applied to developed countries -- something Beijing has steadfastly refused to consider. It also sought membership as a customs territory, not an independent country, to avoid offending Beijing. Largely because of Taipei's positive attitude, Taiwan has concluded bilateral WTO accession talks with all interested countries, including the United States, the European Union, and Japan.

Although China remains outside the WTO, Beijing has insisted that Taiwan not be allowed to join until it is admitted. This position is not only arrogant but also surprising, in that Hong Kong was allowed to enter the WTO as a separate entity before control reverted to China. Now China appears to be attempting to recruit allies like Hong Kong and Pakistan to work its will, although neither has any unresolved trade issues with Taiwan. Hong Kong, in fact, concluded a bilateral WTO accession agreement with Taipei some time ago.

Taiwan has looked to the United States, as the de facto senior member of the WTO and the unofficial arbiter of such matters, to press the case for its membership in the run-up to the WTO ministerial meeting in Seattle at the end of November. The United States has long taken the position that the WTO is a trade organization, not a political one, and the applications for membership by China and Taiwan should be considered separately on their merits. Obviously, if that is the decision paradigm, Taiwan should now be admitted and Beijing remain outside until it is prepared to accept trade disciplines.

Recently, however, there have been disturbing signs that U.S. resolve is weakening on this issue. U.S. officials have begun to suggest that Taiwan's WTO membership requires unanimity of support among interested WTO members, a position that effectively gives Beijing, acting through Hong Kong or another surrogate, veto power over Taiwan's application.