Europe United on Economics; Could China?

Jonathan Clarke, a former member of the British diplomatic service, is with the Cato Institute in Washington. E-mail:

Any general will tell you that the greatest challenge for a peacetime army is to keep its troops busy and out of mischief while they are in fact doing very little. The same is true of foreign policy problems that are at once volatile and insoluble.

Taiwan is just such a problem.

Its supra-regional significance has predicated the much-heralded tilt of U.S. strategic policy away from Europe to Asia. In the meantime, Beijing and Taipei are not on speaking terms, while in Washington petitioners of all hues peddle their conflicting wares.

To cut through the chatter, a model from the European Union may be helpful. More on that later.

Visitors to Taipei enter a world of medieval complexity. One China, two systems; one China, different interpretations; integration; unification; Chinese state; Chinese nation; state-to-state special relations; quasi-international relations. All these and more have overlapping but crucially different meanings to their various proponents. Taiwanese officials offer these and other variants to Beijing, hoping for a breakthrough but knowing in their hearts that the real parameters are Hong Kong-style absorption into China or U.S. 7th Fleet-guaranteed independence.

This produces the second full-time activity in Taipei: Washington watching. Every statement, every appointment, every gesture is minutely analyzed. President Bush's statement that the U.S. would do "whatever it takes" to defend Taiwan has been taken to the bank, where it is now earning compound interest. Sharp-witted professors who had convinced themselves that Bush's May 25 commencement speech at the Naval Academy would deliver the defining outline of Washington's Asia policy were disappointed and now discern a deliberate backing away.

All the while the economic clock is ticking. Chen Po-chih, chairman of the Council for Economic Planning and Development, puts a brave face on economic development but acknowledges that, given the choice, foreign investors now prefer China to Taiwan. They do so, he said, not just to take advantage of lower labor costs but also because China is now technologically competitive with Taiwan. Tens of thousands of Taiwanese companies have located in China. About 2% of Taiwan's gross domestic product is invested there.

Basking in its economic magnetism, Beijing sees no need to respond to Taiwan's overtures. It has steadfastly refused to respond to Taiwan President Chen Shui-bian's overtures. Instead it has insisted that, as a precondition, he sign on to China's version of "one China."

How should Washington play its hand? The easy part is to prefer Taiwan's burgeoning democracy over Beijing's relentlessly disappointing failure to grow beyond its communist infantilism. This rightly rewards Taiwan with a robust arms package and treatment as a favored ally. These are essential aspects of retaining Taiwanese self-confidence and ability to make imaginative decisions.

In international relations, however, feel-good goes only so far. There is no escaping the harsh laws of realpolitik.

For the sake of global stability, Washington must avoid turning the U.S.-China-Taiwan triangle into a zero-sum game. Harvey Sicherman of Philadelphia's Foreign Policy Research Institute has developed an elegant framework of "two no's and one yes": No to Chinese use of force, no to Taiwanese independence and yes to continued negotiation.

In practical terms, the latter goal may be best met by following an example from the European Union. The organizing principle there is that economic integration should precede political union, if necessary by many decades. France and Germany began economic cooperation in 1950 yet, after half a century of deepening economic integration, still remain distinct sovereignties. On a recent visit to Beijing, former Taiwanese Prime Minister Vincent Siew proposed something similar for Taiwan-China relations. This is an excellent idea that the U.S. should encourage.

The EU parallel is not perfect, but the idea reinforces economic forces already in play. Additionally, by keeping leaders on both sides of the strait busy with something other than saber-rattling, it may discourage them from making mischief over what separates them and let them concentrate on what unites them.

Who knows? In 50 years they may be ready, in the manner of France and Germany, to elect delegates to a joint parliament.

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