Politics and Trade

This essay was distributed nationally by Copley News Service.

The changing of the political guard will soon be under way in Washington.Despite disquiet in many foreign capitals, few dramatic changes in U.S.policy are likely.

One area where a new direction is desirable is China. Not necessarily policytoward the People's Republic of China, which is better treated as friendthan enemy. Although future developments in the PRC remain uncertain,engagement is more likely than isolation to encourage China to be aresponsible international player.

The incoming Bush administration should, however, suggest dropping theimplicit veto granted the PRC over Taiwan's admission to the World TradeOrganization. With China lagging behind, there is no justification forholding up Taipei's membership application.

Beijing applied to the old General Agreement on Trade and Tariffs in 1986.Negotiations were suspended between 1989 and 1991, in the aftermath of theTiananmen Square killings. The application was then transferred to the WTOin 1995.

Also passed along was Taiwan's application, pending since 1990. Taipei'sproblem stems from not human rights abuses, but an uncertain legal status.

When Mao Zedong triumphed on the mainland in 1949, the vanquished ChiangKai-shek fled to the island of Taiwan, raising the banner of the Republic ofChina. Both states claimed to be the sole legitimate Chinese government; thePRC eventually won the diplomatic struggle, gaining official recognitionfrom the United States and other leading Western states.

Taiwan remains the true international economic powerhouse, however. In 1999,the island nation of 23 million was the world's 14th largest exporter and15th largest importer. China ranked higher ninth and 10th, respectively butonly because it possessed 60 times the population.

Equally important, Taipei already sports a market economy. Indeed, it wasTaiwan's dramatic economic progress that reportedly caused PRC supremeleader Deng Xiaoping to push reform on the Chinese mainland. Beijing hasmoved far, but still has far to go.

However, the PRC contends that there is only one China, of which Taiwan isproperly part of. It, therefore, opposes Taiwanese membership inorganizations that require statehood, a stance formally backed by the UnitedStates.

To leave Taipei out of the WTO, however, would make a mockery of theorganization. So, a modus vivendi was arranged: Taiwan applied as thecustoms territory of Taipei and China would join first. Then, Beijing wouldnot object to Taiwan's entry.

Taipei has concluded negotiations with individual WTO members and adoptedmany of the organization's rules. Moreover, the WTO staff has finished mostof the accession documents. But, still, Taiwan waits because still Chinatarries.

The PRC passed what seemed to be its most important barrier to joining theWTO with congressional approval of permanent normal trading relations.Beijing has also been negotiating with other countries and the WTO staff tosatisfy the organization's entry requirements.

Yet, points out Greg Mastel of the New America Foundation, recently''Beijing has dragged its feet in negotiations and has seemed to back awayfrom or try to redefine the agreement that seemed nearly complete in late1999.'' Whether that reflects factional infighting, reconsideration of thecosts of liberalization or a negotiating tactic is unclear.

But, the unfairness to Taiwan is clear. The incoming Bush administrationshould suggest that the WTO inform China that it is time to expeditiouslywrap up its work by, say, June or Taiwan comes in first.

As Mastel points out, America would benefit from Taiwan's accession. TheUnited States exports more to Taipei than to China; the reduced tradebarriers promised by the WTO would likely increase U.S. exports of food,semiconductors and other goods.

There is even more at stake, however. The WTO will work best if it operatesbased on objective rules rather than political favoritism, especiallyinvolving a country not yet a member.

Moreover, the PRC needs experience with the rule of law to establish a freereconomy and society. The WTO provides the international community with anopportunity to apply that lesson to China.

Finally, Taipei deserves a diplomatic boost. There is a dangerousundercurrent to the occasionally bitter contest between Beijing and Taiwan.

Over the last century, the latter has established a separate identity, whichthe PRC could recognize with no loss. But, nationalism drives even Chineseexpatriates to justify the use of force to establish Beijing's sovereigntyover the island.

The United States and other nations should avoid the confrontation thatwould inevitably result from a formal Taiwanese declaration of independence.Nevertheless, they should signal their support for the status quo the mostimportant aspect of which is Taiwan's separate existence, even if notformally recognized as an independent country.

The WTO's official purpose is economic, not geopolitical. Both China andTaiwan should become members. But, if one lags, there is no reason to delaythe other.