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



China grants full rights and privilege enjoyed by all WTO members to Taiwan, which is beneficial to China both economically and politically. As discussed in prior parts of this article, although China has trade deficit against Taiwan, Taiwanese investment brings more benefit to China. The low domestic production cost and relatively advanced technology from Taiwan combine together making Chinese products competing more effectively in the global market. Taiwanese investment in effect brings more trade surplus to China from an overall global perspective. Chinese Government encourages Taiwanese to come and invest also because that once a close economic tie is established, it is more difficult for the island to break off from the mainland and seek independence – by that time, China will have powerful economic weapon in addition to missiles[99].

In comparison, Taiwan is still taking various WTO-incompatible measures against China. Therefore, speaking economically, net-gain is on Chinese part if it sues Taiwan under WTO dispute settlement procedure. However, China refuses to get cross-strait trade issue "WTO-nalized". The seemingly unreasonable contradiction only shows China's determined will that the political notion “one-China” is more important, and it must be safeguarded relentlessly against any slight implication that Taiwan and China are “coequal parties on the same standing before an international tribunal”.

Recently, Chinese Foreign Affairs Minister Tang Jia-xuan emphasizes again that trade issues across the Taiwan Strait is an internal affair within one nation, and its resolution does not rely on “any international mechanism including the WTO”[100].

Interestingly, Taiwanese President Chen recently indicated in a public instance “WTO is not the only dialogue channel between Taiwan and China with respect to cross-strait economic relations”[101]. This may reflect that Taiwan has to readjust, maybe slightly, its position in light of Chinese consistent refusal to conduct WTO consultation and insistence on a more political, more “internal” dialogue, as between two sides of Chinese people.

Chinese scholar acknowledges that "in legal theory and as a matter of fact". Taiwan is entitled to full privilege of a WTO member, including invoking WTO dispute settlement measures[102]. Chairperson of Taiwan's MAC basically regards WTO to be an "existing channel providing cross-strait dialogue" therefore a preferential choice, but also notices that bilateral consultation and dispute settlement measures may be difficult due to political factors[103]. The then Taiwanese Minister of Economic Affairs, Mr. Lin Hsin-i, who led Taiwanese delegation to Doha Ministerial Conference, also told reporters that the dispute settlement between Taiwan and China was the "last resort" and it would definitely lead to a loss-loss situation to both sides; in stead, bilateral consultation should be preferred[104]. Therefore, Taiwan also feels reluctant to use the formal dispute settlement measures to resolve cross-strait economic and trade issues, but it is compared against the informal bilateral consultation mechanism, which still falls in the subject of WTO – an idea stubbornly avoided by China. Above statements came earlier than President Chen Shui-bian’s softened position, mentioned in last paragraph. There leaves possibility that Taiwan may seek to conduct cross-strait dialogue with mainland China not as between two WTO members, though the subject topic discussed is their reciprocal rights retained by their parallel memberships.

However, so long as China does not voluntarily request consultation with Taiwan in the WTO context, Taiwan is practically feeling free to maintain its discriminative laws against mainland products and investment. It is not an idealistic situation for free trade itself -- the intrinsic spirit of that important international organization where China and Taiwan can sit side-by-side for the first time during the past fifty years.

[99] This is indeed what Taiwanese President Lee Teng-hui's "no haste, be patient" mainland investment policy intended to prevent.

[100] Press Conference of Foreign Affairs Minister Tang at the Fifth Plenary Meeting of the Ninth National People's Congress, (Beijing, March 6, 2002).

[101] Government Information Office, President Chen Holding Tele-conference with Scholars of Havard University, (Taipei, February 26, 2002).

[102] Prof. Xue Rong-jiu: Not to Have State-to-State Relationship after Both Sides Joining WTO, Economic Daily News, section 10 (Taipei, November 6, 2001). Prof. Xue is Director of Institute of WTO Research at China Foreign Economy and Trade University (a university operated by MOFTEC). All the four chief negotiators of Chinese Delegation to Meeting of Working Party for China's WTO Accession are advisors to this Institute of WTO Research.

[103] MAC Press Release, Summary of United Daily News Interview with Chairperson Ms. Tsai Ing-wen on the Eve of WTO Ministerial Conference Adopting Taiwan's Protocol on Accession, (Doha, November 12, 2001)

[104] Chen Xiu-lan: Dispute Settlement Measures – the Last Resort, Economic Daily News, section 2 (Taipei, November 9, 2001).