China on Monday announced plans to extend a unilateral investigation into what it calls Taiwan’s trade barriers by three months to Jan. 12 next year, the eve of Taiwan’s presidential and legislative elections, showing Beijing’s intention to interfere in the vote.
The Chinese Ministry of Commerce announced on April 12, the day that the Democratic Progressive Party nominated Vice President William Lai (賴清德) as its presidential candidate, a probe into Taiwan’s import regulations on 2,455 types of products from China.
On Monday, China said that the probe, which was supposed to be completed this month, would be extended due to “complexities.” The announcement, as is typical for Beijing, was made in a brief statement with few details and no explanation for the decision.
Most of Taiwan’s regulations on imports from China have been in place since 1993 with the promulgation of the Regulations Governing Trade Between the Taiwan Area and the Mainland Area (台灣地區與大陸地區貿易許可辦法), which provides access to Chinese goods if they are not deemed a danger to national security and have no major adverse effects on local industries. Since then, Taiwan has approved imports of at least 9,835 Chinese agricultural and industrial products.
The legislation was in place when Taiwan and China joined the WTO in 2002 and 2001 respectively. Taiwan’s ban on some Chinese imports on protectionist and national security grounds was not in breach of WTO rules. Taipei has shown goodwill, never listing China as ineligible for fair tariffs, and has repeatedly called on bilateral negotiations, including on trade issues.
However, China has never followed WTO rules regarding dialogue with Taiwanese officials. Data from the Executive Yuan’s Office of Trade Negotiations show that for the past two decades, China had never expressed concerns, let alone suggesting an investigation was warranted, over trade barriers, not even in its negotiations with Taiwan over the Economic Cooperation Framework Agreement.
However, China launched its probe, ignoring the lack of mutual negotiations and notification procedures that go against the norms of WTO dispute settlement procedures.
Moreover, it has acted at a critical moment, right before crucial elections in Taiwan, and bolstered it with the deployment by the Chinese People’s Liberation Army of record numbers of warplanes and ships around Taiwan.
The probe is a political tool aimed at applying economic pressure to affect Taiwan’s elections, adding an entry to China’s ploy of combining military and economic coercion to influence Taiwanese voters and benefit pro-China candidates.
Beijing can be expected to ramp up the probe, implementing more sanctions on Taiwanese products or even ending some of the Economic Cooperation Framework Agreement’s preferential tariffs.
The government and industries should prepare countermeasures for such action.
However, Beijing should have learned that its coercive tactics would prompt Taiwanese to vote contrary to its political aspirations, while its unilateral economic manipulations, which contravene international rules, run the risk of losing Taiwanese and foreign investment, which would do even more damage to its turbulent economy.
As WTO members, the two sides of the Taiwan Strait should hold bilateral consultations or initiate multilateral dispute settlement mechanisms to address trade issues in accordance with the world body’s regulations.
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