China last week announced that Taiwan’s ban on imports of certain Chinese goods constituted a “trade barrier.” Some say they worry the announcement would affect the nation’s Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) application. Beijing’s next move is unclear, but the Chinese trade report is unlikely to affect Taiwan’s participation in the trade agreement.
Some say China could block Taiwan’s trade bloc entry by pressuring one or two members, using trade-barrier probes as leverage. This is overthinking it.
First, everyone knows China does not want Taiwan to join the CPTPP. It would try to block Taiwan’s entry with or without the report. Taiwan’s trade bloc eligibility is not a concern.
Beijing employs its “one China” policy to interfere in Taiwan’s participation in international organizations. However, if it uses the trade barrier report as a pretext to keep Taiwan out of the CPTPP, its “one China” reasoning would be weakened.
Second, it is dubious such a trade barrier exists. Would Taiwan’s policy be seen as a contravention of WTO and Economic Cooperation Framework Agreement regulations? Beijing cannot unilaterally determine this.
So, if China uses the trade barrier report against Taiwan at the CPTPP, current members, including Canada, Japan, the UK and Australia, would require it to bring the case to the WTO, rather than taking what Beijing says at face value.
The trade barrier report and Taiwan’s application to the CPTPP might not be as related as some believe.
Apparently, the report runs on for 24 pages, discussing trade procedure and controversial issues, but China’s rules on trade barriers are vague and general. The ways that the Chinese Ministry of Commerce has conducted its trade investigations on Taiwan and the US have been careless and problematic.
In Taiwan’s case, Chinese officials did not even consult with their Taiwanese counterparts. The Chinese Ministry of Commerce said that questionnaires were sent out to gather opinions from industrial sectors, but it is unclear when they were distributed. A report on the 183 questionnaires was provided, but China never revealed those industries’ or associations’ names.
In short, the ongoing discussions on China’s trade barrier report are irrelevant at best, and self-incriminating at worst. Those who talk about the report in an eloquent way might have misunderstood it from the outset.
When it comes to international trade, a great number of documents on investigations are available, but they are replete with incomplete information and lack transparency, just like the one China provided. These reports are questionable due to their inconsistencies and the predictability throughout the investigations. Thus, their conclusions cannot be considered valid.
Moreover, the report is not credible due to the timing of the investigation, the close collaboration between China’s commerce ministry and its Taiwan Affairs Office, and the overt and covert threats Beijing poses.
The trade barrier report is another tool of “economic duress” China uses to intimidate Taiwan.
Taiwan’s most urgent task is economic de-risking to mitigate China’s economic threats, which always occur during election run-ups. Meanwhile, to allay China’s economic intimidation, Taiwan must further collaborate with the US, Japan and other G7 countries. As for joining the CPTPP, Taiwan should call out China’s move to CPTPP members, who would agree that what Beijing has done goes against the values and spirit of the trade agreement.
Yen Huai-shing is deputy executive director of the Taiwan WTO & RTA Center at the Chung-Hua Institution for Economic Research.
Translated by Emma Liu
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