China's Tight Grip on Taiwan Delays Long-Awaited WTO Membership

The Wall Street Journal July 31, 2000

By IAN JOHNSON

Staff Reporter of THE WALL STREET JOURNAL

BEIJING -- China's top-priority effort to join the World Trade Organization is facing a delay as a result of its biggest foreign-policy challenge: reunification with Taiwan.

A month ago, China was well on its way to joining the 134-member club after its application had been approved by all major trading partners, including the U.S. and the European Union. All that remained were a handful of smaller countries, and talks with them were scheduled to be wrapped up soon.

Now, however, China is facing a problem within the WTO's headquarters in Geneva. There, as WTO staff members draw up the so-called protocol agreements -- the reams of paper that define exactly what concessions China will make in order to gain entry into the organization -- China is insisting that its claim over Taiwan be recognized in the legal language.

Territorial Claim

China hasn't specified exactly how it wants that territorial claim to be enforced. At a news conference last week, chief Chinese negotiator Long Yongtu said that Taiwan would only be allowed to join the global rule-making body as a customs territory of the mainland, much on the model of colonies such as Hong Kong and Macau. Such a stand is "a matter of principle for us," Mr. Long said.

That would upset a consensus within the WTO that Taiwan should be allowed to enter the club as a separate economic area -- that is, not an independent country, but also not as an explicit part of China. Some WTO members have argued that Taiwan has long since fulfilled its requirements to join the club and its application has been held up only to satisfy China's demand that Taiwan shouldn't win entry to the organization first.

China wants to unify with Taiwan, a onetime province of the mainland that was later a Japanese colony. In 1949, the Nationalist Party retreated there after losing China's civil war. The island has since developed into a trading powerhouse and one of Asia's most democratic lands. Many Taiwanese want to reunify with China, but the majority seem to favor outright independence -- or at least separation until China becomes wealthier and more democratic.

U.S. Opposition

The U.S. already says it opposes China's latest push to re-establish sovereignty over Taiwan. "I think it is certainly clear that the U.S. will not accept this," U.S. Trade Ambassador Rita Hayes said in Washington.

It isn't immediately clear precisely how far the issue would affect the final stage of China's 14-year effort to join the global body. Mr. Long said at a news conference the situation "should not be dramatized," saying China knew how to handle such sensitive problems with the WTO and adding: "I am sure we can find a solution acceptable to members."

But the issue comes as China is already facing criticism by some WTO members for backtracking on promises it made during negotiations, for instance trying to water down in the final document the market-opening measures it promises in negotiations. The issue could also become tied up with the Chinese Communist Party's annual summer meeting in the resort town of Beidaihe, where the next year's policies are hashed out. Taiwan will reportedly be at the top of the party's agenda when it begins in a month.