Last week a Hong Kong newspaper quoted a Chinese official as saying that China would not discuss issues such as the opening of direct links across the Taiwan Strait within the forum of the WTO. There has been no confirmation of the report from Beijing authorities but it is quite consistent with China's stance on treating cross-strait issues as a domestic affair in which there is no place for international arbitration. It is also consistent with Beijing's stubborn resolve not to engage with Taiwan in any way unless Taiwan accepts the "one China" principle, which Beijing duplicitously tells Taiwan is the 1992 so-called consensus reached prior to the Koo-Wang talks, while it tells the rest of the world it is Taiwan's acknowledgement that it is a part of the PRC.
While the enthusiasm of some politicians in Taiwan, such as Lien Chan (
Rather it is that the WTO is a forum for arbitrating international trade disputes. But Beijing insists that no dispute with Taiwan is an international issue and it will not seek arbitration through such channels. The WTO has told Taiwan that while the ban on direct transportation and communication with China is none of that organization's business, the third link, direct commerce, must, however, be established. Taiwan has pointed out that it is hard to do this while China refuses to discuss setting up the necessary mechanisms -- a foreign exchange settlement mechanism for example.
It is ironic that China is now the chief obstacle to the lifting of a ban Taiwan's maintenance of which has been a sore point for years.
But will this be a real problem for Taiwan's membership aspirations? Probably both the government and the WTO itself are hoping that by the time the organization reviews Taiwan and China's entry bids in November, things will have changed. Experience tells us that this is probably wishful thinking. A fallback plan is necessary. Is the WTO prepared to accept Taiwan's membership while the country clearly violates basic tenets of the WTO in its direct ban on commerce with China, if Taiwan is willing but unable to lift the ban because of China's recalcitrance? An understanding needs to be reached.
There are other problematic areas. For example, if China is not prepared to take cross-strait trade disputes to the WTO then what is to stop Taiwan from piling up trade barriers against China at will -- except perhaps China's practice of using Taiwanese businesses in China as whipping boys for its cross-strait frustrations.
More seriously, perhaps, is the question of the degree to which Taiwan can seek redress against China within the WTO framework. Should Taiwan file a complaint against China in the WTO, what happens when China tells the organization that it does not recognize its authority to arbitrate in the matter? Is the WTO prepared to penalize China for not playing by the rules vis-a-vis Taiwan? Frankly, given the favoritism that organization has shown to China in the past, we doubt it. China will say that it has no wish to challenge the WTO's authority but the Taiwan issue is a vital national interest over which it will not give ground. Stalemate between China and the WTO will be the likely result and Taiwan the inevitable loser.
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