Really Going WTO?  (c) Simon Xi Zhang, 2002



1. Legal Structure Governing Indirect Cross-Strait Economic and Trade Activities

Speaking briefly, there are now three organs in charge of matters regarding the mainland -- the National Unification Council[10], the Cross-Party Group[11], and the Mainland Affairs Council (MAC)[12]. The ministerial level MAC was created in 1991 directly under the Executive Yuan (the Cabinet) to take charge of planning and handling mainland affairs for the government. MAC advises the President and Prime Minister on mainland affairs, and carries the sole responsibility to devise cross-strait policies, which touch necessarily on commercial relations.

After Temporary Decree was rescinded, the primary legal source on cross-strait relationship is Statute Governing Relations between the People of Taiwan and the Mainland Areas[13] (hereinafter Relations Statute). The Executive Yuan promulgated Implementing Rules to Relations Statute (hereinafter Implementing Rules)[14]. Thus, Relations Statute and its Implementing Rules constitute the basic-tier legal authority for Taiwan-China relationship.

With respect to trade and other commercial activities with mainland area, Relations Statute empowers relevant ministries taking administration. These ministerial regulations are the second-tier legal authorities. For example, Ministry of Economic Affairs promulgated Regulations Governing Permission of Trade between Taiwan Area and Mainland Area[15] (trade), Regulations Governing Permission of Conducting Business Activities in Mainland Area[16] (business presence and natural person presence), and Regulations Governing Permission of Investment or Technology Cooperation in Mainland Area[17](investment). Ministry of Finance published Regulations Governing Permission of Financial Transactions between Taiwan Area and Mainland Area[18] (banking), Regulations Governing Permission of Insurance Transactions between Taiwan Area and Mainland Area[19], and Regulations Governing Permission of Securities and Futures Transactions between Taiwan Area and Mainland Area[20].

The ministerial regulations then provide for designation of specific systems or measures to implement second-tier regulations. These ministries and their subordinate bureaus accordingly make rules and orders. These administrative law documents are third-tier authorities governing China-Taiwan trade and commercial activities. One example is Rules for Banks in Taiwan Area Conducting Indirect Mainland Import and Export Foreign Exchange Transaction[21]. Compared with second-tier authority, the third-tier authority does not trace directly back its enabling act to Relations Statute.

Before 2002, the most distinctive nature of all these laws was that any direct activity and transaction between Mainland area and Taiwan area was avoided, unless the contrary was provided for in the proviso.

[10] Letter No. (79) Hwa-tsung 15711 of General Secretary of the Office of President (September 21, 1990). It is headed by the President and the last meeting was held on April 8, 1999.

[11] President Order, on Major Points to Set up Cross-Party Group (June 26, 2000). It was established by President Chen Shui-bian soon after his inauguration, possibly aimed to bring up voices of those non-KMT pro-independence members in mainland affairs policy-making.

[12] President Order, Hwa-tsung (1) Yi-tse No.0554 (January 28, 1991).

[13] President Order, Hwa-tsung Yi-tse No.3736 (July 31, 1992). The National Unification Council adopted the Guidelines for National Unification on February 23, 1991 but it is only a document of declaratory nature.

[14] Executive Yuan Order, Tai (81) Fa-tze No.31666 (September 16, 1992)

[15] Ministry of Economic Affairs Order, Jing (82) Mao-tse No.083651 (April 26, 1993).

[16] Ministry of Economic Affairs Order, Jing (83) Shang-tse No.201625 (January 31, 1994).

[17] Ministry of Economic Affairs Order, Jing (82) TouShen-tse No.006817 (March 1, 1993).

[18] Ministry of Finance Order, (82) Tai-tsai Rung-tse No.820178343 (April 30, 1993).

[19] Ministry of Finance Order, (83) Tai-tsai Pao-tse No.830485201 (September 30, 1994).

[20] Ministry of Finance Order, (85) Tai-tsai-cheng Fa-tse No.59352 (October 24, 1996).

[21] Ministry of Finance Order, (84) Tai-tsai Rung-tse No.84336149 (July 20, 1995).