Three links gaining in importance

After the presidential election, subtle oscillations of temperature have occurred in cross-strait relations. Chen Shui-bian (陳水扁) has deliberately assumed a low-key position, while Beijing has taken a "listen-to-his-words, watch-his-actions" attitude. On the surface, the cross-strait crisis triggered by the "two-states" model seems to be easing. But in reality, the confrontation over Taiwan's sovereignty issue is intensifying. The impact of this trend is most obvious in cross-strait trade, especially in the "three links" issue.

Despite Chen's repeated public statements that he will readjust the "no haste, be patient" policy after he takes power, there are many indications that he will in fact continue to uphold policies of the Lee Teng-hui (李登輝) era, in the hope that Taiwan will be able to enter a "member-to-member" dialogue with China within the WTO framework, thus using the opportunity to create an impression that Taiwan is a sovereign state and that its relations with China are state-to-state. So the "three links" issue will carry as heavy a political mission as it did under Lee.

Meanwhile, Beijing has indicated that it will set limits on Taiwanese businesses which support Taiwan independence. It will not allow them to support local Taiwanese powers back home and make economic profits in China at the same time. Beijing even believes that Taiwan's massive trade surplus with China has provided Taipei with the foreign currency to buy advanced weapons and boost pro-independence forces.

China's stance on the "three links" issue has also undergone a conspicuous change. In the past, China has tried hard to promote direct links. It has tried to promote unification through the economic unification brought about by direct links. However, now it is willing to negotiate the "three links" issue with Taiwan only under the "one China" premise.

Obviously, the economic logic of cross-strait trade has been replaced by political logic. By nature, economic exchanges are mutually beneficial. Replacing economic logic with political logic will only hurt both sides. We can now imagine the results of the "three links" issue being politicized.

For Taiwan, if it still limits trade exchanges with China after both sides have entered the WTO, then China will certainly file a charge that Taiwan is violating the supreme spirit of the WTO, which calls for open markets and free trade. A vast majority of WTO members have diplomatic relations with China. Under these circumstances, the possibility of Taiwan losing such a dispute is high. And if it did lose, it is uncertain whether Taiwan would have another chance of resolving trade disputes with China through dialogue.

Since Taiwan will enter the WTO as a "customs area" rather than a sovereign state, will it be hurt by engaging in "member to member" negotiations with China -- inadvertently highlighting in the international arena, that Taiwan is not a sovereign entity?

If Beijing insists on "one China" as a premise for "three links" and if Taiwan is not willing to give in, then the most probable outcome is "no three links and no one China." This runs counter to China's goal of using direct links to push for unification.

Because both sides have weighed down "three links" negotiations with such a heavy political baggage, this simple economic issue is now fraught with bizarre politicking. The results will only be counter-productive if Taiwan tries to use the "three links" negotiations to highlight its sovereignty, or if China tries to use the negotiations to ascertain its "one China" principle.