The Magazine

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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Although it might help to prevent a fit of pique from Beijing, keeping Taiwan out of the WTO is not in the best interest of either the United States or the WTO. In return for admission to the WTO, Taipei has agreed to lower hundreds of tariffs and non-tariff barriers. This market opening would make possible hundreds of millions of dollars worth of new U.S. exports to Taiwan of products ranging from pork to sophisticated electronics. Taiwan already imports more from the United States than the PRC; in 1998, total U.S. exports to Taiwan were $ 17 billion, and the total for the PRC was only $ 14 billion. If Taiwan became a WTO member, it would certainly be among the most promising foreign markets for U.S. exporters.

Beyond that, the credibility of the WTO is at stake. The WTO was conceived as an unbiased policeman of international trade, which would facilitate expanding trade and arbitrate trade disputes without regard for outside concerns. If the WTO allows Taiwan to be excluded from its membership because of the entirely political concerns of a non-member, that credibility will be seriously damaged and the precedent will be set for future political manipulation of WTO negotiations and operations. If the body is used as yet another diplomatic forum for endless political machinations, it will soon become just another discredited international organization.

Clinton administration officials are correct in noting that the WTO is a multilateral body, and Washington alone cannot ordain Taipei's membership. If it chose to, however, Washington could challenge those countries that stand in Taipei's way on Beijing's behalf and recruit other WTO members to press Taiwan's membership. There is no guarantee that this initiative would succeed, but there is no guarantee that any of the other trade negotiating initiatives that the United States plans to pursue through the WTO will succeed either. Still, the United States persists in advancing controversial initiatives to eliminate tariffs on various industrial products and begin discussions on integrating labor and environmental issues into the WTO in the face of considerable, open opposition. Given the stakes for both the United States and the world, Taiwan's WTO application deserves no less an effort.

To put it simply, Taiwan has earned WTO membership. Against considerable domestic opposition, Taipei has pursued economic reform and built an open, vibrant market economy. It is clearly more qualified for WTO membership than dozens of countries that are now WTO members. The United States has a considerable amount to gain from Taiwan's WTO membership; but beyond that, admitting Taiwan is simply the right thing to do -- regardless of whether China is also a member. It would be a mistake to bow to Beijing's unreasonable and ever expanding interpretation of the out-of-date one China policy and quietly allow Taiwan to be unjustly denied a seat at the WTO table.

If the Clinton administration is unwilling to take up this cause on its merits, Taiwan's supporters in Congress are well advised to press the issue hard in the next few weeks. After all, the Constitution assigns Congress primary responsibility for international trade. This is a matter best not left to diplomats, who seem more interested in bowing to Beijing than advancing U.S. interests.

Greg Mastel is director of the Global Economic Policy Project at the New America Foundation.