Tue, Feb 13, 2001 page8

• 'Integration' the key to Strait woes

  • By David Huang 黃偉峰
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  Ever since President Chen Shui-bian (陳水扁) set the key note for cross-strait political integration in his New Year's Eve speech, various formats for integration have been posited in the media -- commonwealth, confederation, federation, community, concord treaty. Once again, these possible political frameworks have become hot topics.

  Some people expect an emulation of the EU's functional integration as a way to circumvent Beijing's "one China" principle. They expect a path from the "small three links" and "three links" leading to free trade zones, common markets, economic and monetary union and finally political alliance. But on the other hand, some believe using the integration dictum to evade the "one China" principle amounts to putting the cart before the horse. They believe Taiwan should first insist on "`one China,' with each side making its own interpretation" and then enter into negotiations on unification. Both of the above-mentioned remarks are based on the foundation of "integration," but neither side has an adequate understanding of "integration."

  During a symposium at Academia Sinica's Institute of European and American Studies last June, I pointed out that "integration" is a process, not a final status. European integration therefore, is an ongoing process, not a static phenomenon. Also, the EU is a political entity "in formation," even though it already has institutions such as the European Commission, the European Parliament, the Council of Ministers, the European Central Bank and the European Court of Justice. Because the EU's member states coordinate with each other on many policy matters -- or delegate EU institutions to handle the matters on their behalf -- some believe the EU already has the characteristics of a quasi-federal state. Such a rash characterization of the EU on the basis of its current status overlooks the fact that "European integration" is a process and that the nature of the EU is still changing. Precisely because "integration" is a process, the final status of integration is uncertain. We cannot therefore predict for sure that the end result of European integration will be a federation.

  That said, the "direction" of political integration is certain. Such a sure sense of direction was already visible in the commentaries by Jean Monnet and Robert Schumann, the fathers of European integration who believed that only by moving toward political integration could Europe avoid another war. The final outcome of the political integration was not a pressing question, however. Therefore, Monnet suggested cooperation in the coal and steel industries as a starter, leading step by step to sectoral integration. Political integration would then follow when the economic circumstances were ripe. We call this model "functional integration."

  But do the two sides of the Taiwan Strait enjoy the same conditions that existed at the beginning of European integration? The answer is no. No major sovereignty disputes existed between member states during the initial phase of European integration. In contrast, the two sides of the Strait still deny each other's sovereignty. In other words, functional integration is not a tool for resolving sovereignty disputes. Rather, mutual recognition of sovereignty is a prerequisite for functional integration. Given their sovereignty dispute, the two sides of the Strait will find it difficult to initiate functional integration. But that does not mean the concept of political integration is totally inapplicable.

  Quite the contrary. I have argued elsewhere that the concept of "political integration" (not the functional integration model which derives from it) is one of the win-win strategies for both sides of the Strait. Essentially, the primary purpose of integration -- whether political or economic -- is to establish policy and institutional coordination mechanisms, so as to lower transaction costs, mitigate negative externality, and increase the economies of scale.

  The more successful the integration, the larger the increasing returns. In addition, political integration is compatible with the strategic framework of acquiring a "sure direction in exchange for an uncertain outcome." Political integration can be acceptable to China because it implies that the direction toward unification is set unambiguously. Also, as the institutions and policies of the two sides become more closely knitted, any side wanting to unilaterally break away from the integration framework will have to pay a formidable price. Therefore, once Taiwan enters a cross-strait integration framework, the possibility of the country declaring independence will unilaterally decrease. Unless China wants to seek an immediate unification by way of war, political integration will be a worthwhile objective for China to pursue.

  Political integration is also acceptable to Taiwan because the final outcome of the integration remains uncertain even though the direction toward integration is set. Once the direction is set, it will weaken the irrational threats of Chinese nationalism. Moreover, because the results of integration are uncertain, the two sides of the Strait may avoid any immediate showdown on the sovereignty issue. For example, China will certainly object if Taiwan advocates a commonwealth or confederation, because both formats would presuppose Taiwan's status as an independent sovereign state. Similarly, any Chinese proposal of "one country, two systems" or federation will be unacceptable to Taiwan because both proposals presume that Taiwan's sovereignty belongs to China. But if both sides agree to activate political integration, they can maintain the direction toward the unification of sovereignty, while not rushing to the conclusion of the final political entity as a result of this ongoing integration process. The result of integration may be a "Chinese confederation," "one country, two systems," or a single unified country. Or the integration may fail, go back to square one, and start again from scratch.

  But why should China accept the uncertain outcome of integration? Because the direction of integration usually limits the range of its final outcome. In the European experience, integration of the policies and institutions of member states in an early phase defined the options available in the next phase of integration. In other words, the incentives of "path dependency" and "increasing returns" make it difficult for member states to drop out of the union. That is why Britain does not plan to leave the EU even though it has been angered by Eurocrats' intrusion into its parliamentary sovereignty.

  Then why should Taiwan accept integration which it knows will make the country increasingly dependent and eventually lead to unification? Apart from the potential benefits of economic integration, the integration process presupposes that Taiwan's sovereignty is robust and independent because, as we all know, integration is a process of pooling sovereignty. Taiwan cannot pool its sovereignty with China if it has no sovereignty in the first place. Therefore, once the integration process kicks off, China will in fact have admitted that Taiwan has a certain form of sovereignty or autonomy. Taiwan will therefore naturally have the right to drop out of the integration process at any time, even though the likelihood of such a move is extremely low.

  Hence, Chen's political integration dictum is not a political move totally lacking in strategy, nor is it just another campaign slogan. Political integration is a high-precision piece of political engineering. It is not a natural integration driven by market economies. It is a strategic framework that trades a certain direction in exchange for an uncertain outcome. Now that Chen has given away the "certainty" of direction toward cross-strait integration, is Beijing willing to accept the uncertain outcome of such integration?

  David Huang is an associate research fellow at the Institute of European and American Studies, Academia Sinica.

  Translated by Francis Huang
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