Taiwan Deserves Accession to WTO

Zhu Rongji’s visit to Washington highlights a potentially major clash between the United States and China. The conventional wisdom characterizes recent Sino-American relations as a clash between economic interests and human rights concerns. However, China, in reality, is creating a substantial problem that, while trade-based, involves democratic values.

The issue is whether Taiwan will be considered for membership in the World Trade Organization on its own merits in its own time, or whether China can intimidate and bully the WTO into holding up Taiwan’s accession until China is finally ready. (Although China was an original contracting party to the General Agreement on Tariffs and Trade in 1948, it withdrew after the communist takeover of the mainland.)

Accession to the WTO is a complex process and each negotiation for admission has proceeded on its own pace, based entirely on economic factors and the willingness of applicants to meet WTO obligations. This essentially nonpolitical process has been a critical source of strength and credibility for the WTO, and its predecessor, the GATT.

China’s contemporary interest in GATT membership began seriously in 1987, when the organization created a “working party” to examine the question. In September 1992, the GATT created another working party to consider Taiwan’s application. The GATT council agreed to consider the report of the China working party first, although the legitimacy of that decision is open to challenge. At the same time, the council decided that the two applications should be considered independently.

This ambiguous decision is now the source of conflict. China has resisted major changes in its economic and trading systems that would enable it to meet WTO obligations, and the pace of accession has slowed dramatically from what was expected in September 1992. Beijing clearly wants the full access to the international trading system that WTO membership would provide, but it has been exceedingly reluctant to undertake the corresponding obligations. By contrast, Taiwan has been proceeding steadily with its efforts, and has completed all but two of the necessary bilateral agreements with current WTO members, and those two appear close to resolution.

WTO membership is open to “customs territories” rather than “states” (thus explaining Hong Kong’s current membership) and, if admitted, “Chinese Taipei” (as Taiwan is often known in WTO circles) would not represent a “political” victory over Beijing. Whatever the ultimate political outcome for China, it will not be decided in the WTO, appropriately so given the WTO’s nonpolitical status. Thus, although the legal and political hang-up over whether Taiwan is a “state” is simply not present in the WTO context, Beijing refuses to see it that way.

If Taiwan were any other “customs territory,” it would be on the verge of WTO admission. But consistent, indeed nearly hysterical, opposition from Beijing, has rendered “Chinese Taipei’s” chances of accession problematic. Because the mainland China market potentially is so much larger than Taiwan’s, Beijing’s threats have had a substantial impact, especially with the Europeans. But this result is unjust and illogical and one other WTO members should see as threatening to the nonpolitical nature of the organization.

Trade issues are hard enough and their domestic implications sufficiently troubling for all WTO members that the eruption of overtly political considerations in its membership decisions must be viewed as a serious threat to the organization.

For the United States, and especially for Congress (which has supported Taiwan’s WTO accession on a bipartisan basis), political and economic issues are at stake. It is unacceptable to permit China to block Taiwan’s accession to the WTO simply to suit its objective of placing democratic Taiwan under its control.

The Clinton administration has said it supports considering Taipei’s application separately from China’s, and on its own merits, and the negotiations with Zhu Rongji may well decide the question. What the administration actually does will be a test of its real devotion both to liberal international trade principles and to democratic values--one that Congress should monitor very closely.