Hallelujah! Somebody in Taiwan has finally seen the light about the WTO. After months of dire prognostications from the mainstream media about how the entry of Taiwan and China into the WTO will bring economic disaster for Taiwan, the good folks at the Council of Agriculture (COA) have gone and pricked the bubble.
The conventional wisdom is that in many areas, especially agriculture, but also many sectors of manufacturing, Taiwan faces an imminent deluge of cheaper Chinese products, leading to mass unemployment and the hollowing out of Taiwan's economy. This would certainly be an alarming prospect, so it's a good thing it's not true.
The key element in the true story is Beijing's continuing adamant refusal to allow any cross-strait matters, even purely trade-related ones, to be discussed under the WTO framework. To quote the irrepressible Zhang Mingqing (
What China absolutely wants to avoid is the invocation of the WTO dispute-settlement procedure, which not only would put the two sides on an equal legal footing, but -- horrors! -- would intersperse a neutral international party between them, ie: a WTO tribunal. China is obviously not even close to being mentally prepared for this eventuality.
Which brings us to the announcement by the COA on Nov. 20. What they said, in effect, is that they have no plans to open the market to Chinese agricultural products, but only to those of other WTO members (according, naturally, to the timetables laid out in the intricate accession agreements). Surely this would violate the WTO's core principle of non-discrimination.
Well, the COA officially says they don't believe it would, but that if China disagrees, it is welcome to initiate WTO procedures by requesting consultations with Taiwan. Bravo! Since the cadres in Zhongnanhai have no intention of doing so, they just have to swallow their objections, and thus Taiwan's behavior will stand unchallenged. This is wonderfully convenient.
What it means is that Taiwan can violate the WTO agreements with respect to China as much as it likes, and no need to fuss with the notorious "exclusionary clause" or anything. Although so far only the COA has gone public with this, there is no reason why the same tactic cannot be applied to, say, textiles, or education or really any Chinese goods and services at all.
Of course, eventually all these markets should be opened, and they will be in due course. But the fact is that Taiwan doesn't need to start moving until China acknowledges the reality that Taiwan is an equal member of the WTO. Only then will Taiwan have to make the hard adjustments, and at that point the pain will be at least partially balanced off by the diplomatic breakthrough.
In the meantime, the government and industries can spend their energies dealing with the competition from the rest of the WTO membership first, and take all the time they need to get ready for the Chinese. The only twist would be if some third country claimed that it was also being harmed by continued Taiwanese restrictions, and filed a separate complaint.
In theory this might occur if, for example, the goods in question were produced by a German company's factory in China. But this need not be disastrous. If any other WTO members requests consultations, Taiwan can be very polite and simply give in, at least on that particular case -- "sorry, we never intended to harm your interests, no hard feelings, right?"
Alternatively, if by that time Taiwan has decided it is ready for the Chinese competition, and feels the international respect is worth more than its "special" protections, one could try a different tack. Taiwan could argue, pretty justifiably, that the complaint cannot be heard properly without the participation of China, as an intimately involved party. Then the original complainant would have to go and request Beijing to join the action.
In fact, if one were clever, one could intentionally design such a test case. Slap an egregious restriction on some good that would definitely draw a complaint from a third country, but equally definitely require China's participation. Then sit back, smiling oh-so-reasonably ("we really want to help, we'd love to start consultations soon as possible, etc ..."), and let the other country do the dirty work of lobbying Beijing.
It seems like a fantastic vision to imagine, say, Airbus or Microsoft putting pressure on Beijing to get real about Taiwan, doesn't it? All in all, this looks like a win-win situation for Taiwan. Either you get the legal recognition from China that you crave, or you sit as long as you like on a "get-out-of-jail-free card" from the worst impacts of WTO entry. Enjoy!
Bo Tedards is a political commentator based in Taipei.
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