It has been a long journey, but Taiwan has entered the WTO, an important international institution. Taiwan could have entered many years ago, at the height of its economic prowess, had China not made such an effort to prevent it.
This is seen by many as a sign of its power, and it is in some sense, but less is said about the fact that it is also a sign of China's weakness. That such a huge country could consider it an embarrassment to have a small neighbor, with a population that is only 2 percent of its own, enter before them, is not a sign of strength but of weakness.
One could question the wisdom of China as well. Taiwan will have its difficulties in abiding by the rules of the WTO. For some, such as farmers, it could be severe. But as a country, its adjustments, and its ability to adapt to them, will be infinitely smoother than what China will have to go through. The comparison should add to Tai-wan's attractiveness for foreign direct investment.
The acceptance of China into the WTO was not a surprise -- it was a foregone conclusion for several months. What has been interesting is the shift in emphasis in public discussions of what will follow.
One has to recall the previous emphasis on the benefit to worldwide commerce and the likelihood that it would lead to a responsible and even more democratic China. Chinese economic statistics were accepted at face value.
The obvious potential for unrest based not only on economic disruption, but on social and political pressures, were muted. Even those that acknowledged this potential argued that though there was no assurance that this enormous economic undertaking by China would succeed, there was no better option for the world, as isolating such a huge country was in no one's interest.
What we read more about now, with China and Taiwan in the WTO, is the difficulties that China will have in trying to implement what it has agreed to in gaining accession. High-level Chinese officials speak of the enormity of their problems, and that joining the WTO will in effect help them pressure those in China who resist the harsh requirements of WTO membership. Foreign business organizations also now place more emphasis on the potential difficulties despite the commitments Beijing has made.
The change is that officials are now preparing their people, or the businessmen and their boards of directors, that meeting WTO commitments may take more time and considerably more patience than was anticipated.
The positive long-term benefits that come later, and the negative short-term problems that will take place very soon, clearly will not be in sync. Getting from short term to long term will be dicey and anything but sure. What will transpire when Beijing lets its own ministers and provincial governors know what has been promised to the WTO, or the crisis of unemployment gets much worse, or when the impact of a bankrupt banking system becomes more obvious, is still very much a question.
In the face of this, Taiwan can hardly anticipate that China's economy will be a part of any solution to its own problems. If one pays attention to the Taiwan media, it is clear that economic pundits are also beginning to hedge on this point, but mildly.
With the election campaign in full swing, and the domestic politics of cross-strait relations perhaps the key issue under debate, only a few are spelling out the downside for Taiwan of its and China's entrance into the WTO. The impact of China's WTO problems on Taiwanese investment in China receives even less attention.
Taiwan will have its own -- not entirely China-related -- problems of economic adjustment in meeting WTO standards. It too will face growing unemployment and downsizing of some of its traditional industries during the adjustment period. But China will have a much more difficult and lengthy time adapting, and this could provide some breathing space for Taiwan to upgrade infrastructure and industry.
This could be the time for Taiwan to reinforce its reputation for quickly reacting to the requirements of a continuously changing world economy. This assumes stability, however, which is an area where recent trends indicate some reason for concern, but could instead be based on its already well-known openness, its superior design and service capabilities, and its greater intellectual resources over those of China.
The strategy and the steps needed to upgrade Taiwan's economy were spelled out in the results of the Economic Development Advisory Conference. The fundamental assumption, however, is that the results of the forthcoming election will permit this strategy to move forward quickly.
Though the battle against terrorism has taken top priority, both in government and with the people, the policies that emerged during the first few months of the new administration in Washington have been retained. The US was fortunate in this regard.
There was a largely experienced Cabinet in place and an array of policies already enunciated by the time the Sept. 11 attacks established a new set of priorities. Had these two elements of the Bush administration not been in place, the policy vacuum would by and large have been filled by the bureaucracy, meaning little change.
With regard to Taiwan policy, what emerged in those early months was unambiguous and widely supported in and out of government. Sept. 11 does not appear to have changed this emphasis. Little was said about Taiwan and the WTO, since the US position had been established by the previous administration, and has been supported by the new government. It had been made abundantly clear to China and the WTO that the US would not tolerate any attempt to block Taiwan's entry, or any change in its status in the organization.
Now it has been done. While many of the trade issues that remain between the US and Taiwan were previously handled on a bilateral basis, they may now be addressed via the forum of the WTO. Three potential areas for remediation that come to mind is working toward a future free trade agreement and establishing a more transparent intellectual property rights agreement and a workable export control regime.
It is time to congratulate Taiwan for entering, as a full member, a major international organization. But it is also time to prepare quickly for the new challenges this status brings.
Nat Bellocchi is the former chairman of the American Institute in Taiwan and is now a special adviser to the Liberty Times Group. The views expressed in this article are his own.
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