This article discusses how the recent accession of both China and Taiwan to the World Trade Organization (WTO) influences the working relattionship between these two governments. He also details how each side uses WTO membership to further its trade interests and political gain..

Kong Qingjiang is Professor of International Economic Law at Hangzhou University of Commerce, China. His articles appeared in journals such as the Journal of International Economic Law, International and Comparative Law Quarterly, Journal of World Trade. His recent book is China and the World Trade Organization: A Legal Perspective (2002). The author wishes to thank anonymous commentators for their insightful comments. Email: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

China acceded to the World Trade Organization (WTO) on December 11, 2001 . Taiwan followed on January 1, 2002 as the “Separate Customs Territory of Taiwan, Penghu , Kinmen and Matsu ”. Accession of both China and Taiwan to the world trading body has triggered a fever of activities by Taiwanese businesses, but the governments across the Taiwan Strait have been slow to make policy adjustments. The co-existence of business enthusiasm and governmental indifference may be attributed to the combination of a favorable business environment and unresolved political contentions over Taiwan ’s status. The post-WTO diplomatic struggle between China and Taiwan over Taipei ’s identification in the WTO further poses a question of whether the WTO can accommodate the two sides across the Taiwan Strait. 1 

Relationship between China and Taiwan in the WTO

The WTO Agreement 2  generally does not allow its members to make any reservations. 3  “Reservation” is a legal term which means that a country acceding to an international treaty reserves the right not to be bound by the “reserved” article or articles of the treaty. Exceptions provided by the Multilateral Trade Agreements in the WTO are limited to a few cases such as national security. 4  A member can be exempt from enforcing the provisions of the WTO Agreement if it considers the provisions contrary to essential security interests or to pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security. Except for national security or other specified reasons, the WTO Agreement is binding on all the members subject to Article XIII of the Agreement Establishing the World Trade Organization, which authorizes a member to select not to apply the WTO Agreement to a certain member in its relation with the latter.

Therefore, the WTO Agreement can be regarded as binding international law on its members, or at least that the WTO Agreement applies to trade relations, as special international law, if not as general international law, among members that do not exclude the application of the Agreement among themselves. “Binding international law” means: (1) that a country may not act in a way contrary to the “international law” concerned; (2) that if a country violates the international law, it will bear all legal consequences arising from the breach, such as providing compensation to negatively affected countries and even being the target of retaliation.

Furthermore, the WTO Agreement specifically requires its members to align their domestic laws with the WTO Agreement; 5  it requires members to inform the relevant WTO committee of any measures affecting its obligation under the relevant Multilateral Trade Agreement, 6  and to give favorable consideration to another member’s request for consultation. 7 

De facto Relationship between China and Taiwan in the WTO

The current arrangement permits different interpretations of the relationship between China and Taiwan within the WTO. Taiwan ’s status as “separate customs territory” under the name of “Chinese Taipei” allows China to interpret Taiwan ’s status in the WTO as a “separate customs territory” of China like Hong Kong or Macau . The relation between Beijing and Taipei in the WTO is equal but asymmetric. Similar to “One China, Separate interpretations,” the WTO is supposed to provide the vague space for self-justification for either side as long as there is a minimum détente across the Taiwan Strait . For example, the English expression “Chinese Taipei” is often termed as “Chunghua Taipei” in Taiwan that only has cultural connotation in the Chinese language, while in China it is understood as the “Taipei of China” that conveys political connotation in the same language. 8 

China and Taiwan did not exclude the application of the WTO Agreement between each other when they joined the WTO. In principle, both are bound by the WTO agreement, as special international law, in their trade relations with each other. In practice, however, as international law is by nature law among nations, it will not be accepted as binding norms on cross-strait relations by China as long as Taiwan is seen as a renegade province. 9  In these circumstances, the legal effect of the WTO Agreement is compromised in cross-strait trade relations.

Taipei ’s approach

When Taiwan was under Chiang Kai-shek’s authoritarian regime, its government claimed to be the legitimate government of the whole China , including mainland China and Taiwan and thus took a hostile and uncompromising attitude towards mainland China in international arenas even at the expense of its own diplomatic space. 10 

Since it began democratizing in the late 1980’s, Taiwan has spared no effort to boost its image and expand its diplomatic space, for example, by applying for membership in the United Nations. As a result of countermeasures on the Chinese side, Taiwan ’s efforts to expand diplomatic space have so far produced little effect except for its WTO accession. Due to China ’s compromise with the international trading community for the sake of its own entry into the WTO, 11  acceding to the WTO has, to a degree, become Taiwan ’s only victory in its efforts to join international organizations. 12 

According to some observers, Taipei is attempting to use the WTO framework to regulate cross-strait economic relations. 13  It is understood that the current pro-independence Democratic and Progressive Party (DPP) administration views the ability to talk with China on equal footing as an evidence and symbol of Taiwan’s de facto independence. 14 

No better opportunity can be provided for Taipei than the WTO in this regard. Needless to say, talk with China in disregard of China’s precondition of the “one China principle” 15  helps create an impression that Taipei is on par with Beijing. 16  Taiwan has insisted on negotiating with China under the framework of the WTO since its accession. 17 

Taipei is also cautious of any efforts by China to downgrade Taiwan ’s position in any international arena. It insists that its WTO mission in Geneva carries out bilateral trade consultations with China with its official name, regardless of Beijing ’s acceptance or opposition.

Beijing ’s evolving approach

Claiming sovereignty over Taiwan , and in accordance with the “one China principle,” China has attempted to oppose Taiwan ’s membership in any intergovernmental international organization. On July 27, 2000 , China , in a paper submitted to its WTO accession working party, sought to attain support for its entry into the organization as a sovereign state, while also requesting that Taiwan be categorized as “a separate customs territory of China ,” but the United States Deputy Trade Representative Rita Hayes rejected this proposal. 18 

As illustrated in an unofficial WTO document, China offered a package concerning its own and Taiwan’s memberships in the multilateral trading body: both China and Taiwan would obtain membership, but Taiwan would join the trading body as a separate customs territory and would obtain membership after China. 19  In theory, it would have been less problematic for China if it had been able to claim that Taiwan was a province of China. However, at the time, China had not had the chance to insert in the Protocol on the Accession of the People’s Republic of China a “One China” provision regarding the post-WTO cross-strait trade arrangement; otherwise, China would have been able to argue forcefully that the cross-strait trade be viewed as trade within one country and therefore the WTO Agreement should not be applied between China and Taiwan. 20 

In principle, if WTO members were persuaded to prevent Taiwan from invoking the WTO Agreement in its trade relation with China , this would have helped strengthen the impression that Taiwan is part of China . Intriguingly, Beijing did not invoke the “non-application” clause of the Agreement Establishing the World Trade Organization. 21  One speculation is that this was the result of a compromise between China and the WTO community. Another possibility is that China did not want to invoke the non-application provision because of other considerations. However, it could also be more related to China ’s awareness that exclusion of the application would contradict the purpose of the WTO or that acceptance of the application could even be a gesture of Beijing ’s good will towards Taipei and other existing WTO members. 22 

However, China ’s diplomatic representatives are very cautious in dealing with their Taiwanese counterparts on the occasion where both are present. As a general practice, even in a forum where both Beijing’s and Taipei’s representatives are present, Chinese officials have been unwilling to make contact with Taiwanese officials, let alone hold formal talks on any subject. Beijing is wary that such formal contacts or talks may help create an impression that Taiwan is on par with China and may be used by Taiwan to boost its image or even expand its diplomatic space. From the Chinese perspective, Taipei ’s relentless campaigns to expand its diplomatic space are independence-driven and independence-oriented and thus China needs to ready itself to block such efforts on the Taiwan side. Beijing associates Taipei ’s use of the WTO framework to regulate cross-strait economic relations as a pro-independence strategy and therefore insists that contacts between the two sides are internal matters not to be conducted under WTO auspices. 23  The Chinese government was advised to prevent the island from using the WTO as a forum for contacts. 24 

China ’s obstinate attitude in refusing formal talks in the WTO forum might have something to do with its understanding of the WTO Agreement in general and its understanding of the implications for cross-strait trade relations in particular and with its confidence in its ability to deal with Taipei in the WTO context.

Beijing ’s reluctance to talk with Taiwan within the WTO framework is grounded in two factors. First, China perceives the Taiwan issue as its internal affair, and is not willing to see a third party, a state or an international organization mediating or interposing between the two sides across the Taiwan Strait . Secondly, Beijing is afraid that the WTO, which is dominated by western countries, might side with Taiwan when they deal with each other within the WTO forum. 25 

Therefore, it was surprising when Shi Guangsheng , China ’s foreign trade minister, suggested in an interview with the Financial Times on November 25, 2002 that both sides might meet to discuss particular issues within the WTO. 26  The speech signified that China appeared ready to ease its ban on official talks with rival Taiwan . Shi Guangsheng, announced that Beijing was willing to abide by WTO rules in notifying Taipei of any action that would affect Taiwanese exporters. He explained that “[c]urrently Taiwan and the mainland do not have a normal trading relationship, but both are WTO members,” and “[c]onsultations on specific issues can be held between the two sides through their representatives in Geneva.” 27 

Not long after Shi’s speech, on 12 December 2002 the representatives of both China and Taiwan in Geneva met to talk about China’s temporary safeguard measures against Taiwan’s steel imports. 28  The meeting between China and Taiwan under the WTO framework caught the attention of other WTO members. 29  China’s new stance appears to be a response to Taipei’s protest. The change in attitude is possibly an attempt to resolve the dilemma posed by Taiwanese requests for WTO talks over China ’s recent imposition of tariffs on a range of steel products. The policy change may also have resulted from pressure by other WTO members. Under the WTO Agreement, any member has the right to consult with any other member on trade measures of the latter, 30  and China , by refusing to cooperate upon request by Taiwan , had risked undermining its reputation as a rule-abiding member. In this sense, Taipei ’s stated stance, which is to require China to act according to the WTO Agreement within the WTO framework, 31  is prone to win the sympathy of other WTO members.

The new development could also be related to China ’s frustration of non-governmental channels to resolve trade disputes established after WTO accession. It was once proposed that the Taiwanese government should not bring disputes to the WTO Dispute Settlement Body. 32  However, in order to avoid the deterioration of cross-strait trade, non-governmental organizations stepped in to help resolve trade disputes. For example, in February 2002 the Taiwan Steel & Iron Industries Association (TSIIA) and the China Steel and Iron Industry Association (CSIIA) met in Taipei and reached a four-point consensus to establish a mechanism for the resolution of disputes concerning cross-strait steel trade. Unfortunately, in the absence of competent governmental authorities, the result of such non-governmental efforts proved to be limited in resolving cross-strait trade disputes. [For example, although the TSIIA was informed of the temporary safeguard measures and invited to discuss on future steel imports from Taiwan with CSIIA, the consultation between the two non-governmental organizations failed to touch the issue of consistency of the temporary safeguard measures with the Safeguard Agreement. This consistency was central to the dispute concerning China ’s imposition of temporary safeguard measures against Taiwan steel imports.] In this context, China notified Taiwan ’s mission to the WTO in November 2002 of a desire to discuss the steel dispute. China indeed had overcome its reluctance to address the Taiwan mission by its official title; talks finally started in January 2003. 33 

A more likely explanation than either outside pressure or frustration of non-governmental routes is that China has developed a new understanding of the features of the WTO and Taiwan ’s status in the WTO. As for its perception of the WTO’s nature, firstly, regardless of whether the international trading community is obligated to comply with the “One China Principle,” nothing in the WTO Agreement can be interpreted to negate the principle. Secondly, the WTO is basically a functionalist international organization, concerned solely with trade issues. It is trade interests, not political agenda that prompt members to take advantage of the mechanisms available in the WTO.

With its accession to the WTO, Taiwan acquired membership in a club available to sovereign states, which even without direct talks with the mainland elevates its status. On the other hand, since Taiwan did not accede to the WTO as a sovereign state, but as a “separate customs territory,” its status would not be elevated to that of a sovereign state, no matter what Taipei does in the WTO. In other words, Taiwan will not acquire statehood by virtue of its talks with China or any other WTO member. Thus it is reasonable for Beijing to talk with Taipei if circumstances make such talks necessary, but Beijing will proceed in a low-key manner.

It leaves open the possibility that Beijing would try to limit them to private bilateral contacts before China clarifies whether or not such “consultations” in Geneva could be held under the WTO umbrella. 34  Taipei has made it clear that such an arrangement would be unacceptable to Taiwan. 35 

Cross-Strait Trade Relations in a Broader Context

Business Enthusiasm vs. Governmental Indifference

Both China and Taiwan are now WTO members. Accession of both sides across the Taiwan Strait to the WTO has aroused interesting speculations about the trend of cross-strait trade relations. The existing WTO members closely watch the interactions between the two new members and rivals. 36 

Indeed, trade has surged across the Strait. The cross-strait trade rose from US$32.34 billion in 2001 to US$42.30 billion in 2002 and US$58.37 billion in 2003. 37  China has become Taiwan’s top trade partner; Taipei’s trade with Beijing accounting for 24.5% of its total trade. 38  The trade surplus of Taiwan in trading with China rose from US$18.16 billion in 2001 to US$24.40 billion in 2003. 39 

However, surging trade is primarily a result of business exchanges, and trade relations between China and Taiwan remain hampered by general cross-strait relations. The two sides have always maintained different viewpoints regarding certain political issues. Although, the possibility of sudden confrontation across the Strait is remote, there have been no significant changes for the better. From China ’s perspective, Taipei ’s refusal to recognize the “One China Principle” prevents the mainland from improving cross-strait relations, while in the eyes of Taipei , the China ’s military deployment against Taiwan and refusal to renounce the use of force to resolve the Taiwan issue poses a threat to Taiwan .

Cross-strait trade relations often are part of a more general problem and are susceptible to the ups and downs of the broader relationship. Trade measures of either side shall be perceived in the context of a much broader bilateral relation. Whenever there is a détente in the Taiwan Strait , trade is no longer an issue between Beijing and Taipei . When cross-strait relations deteriorate, both sides report trade barriers, accusing each other of creating trade barriers, which seems to represent the usual business of both Beijing and Taipei . The following examples are illustrative: Taiwan has long instituted discriminatory treatment to imports from China while enjoying a trade surplus in its relation with the latter. This was not a serious problem in times of “good cross-strait relations”. In fact, the two Koo-Wang meetings between the Strait Exchange Foundation (SEF) of Taiwan and the Association for Relations Across the Taiwan Strait (ARATS) of the Mainland in 1993 and 1998, which were a symbol of détente across the Strait, were followed by surging imports and investment from Taiwan . But not long after Chen Shui-bian advocated “One State, One Side” in August 2002 and the cross-strait relations came to a stalemate did China decide to apply final safeguard measures against imports from, inter alia, Taiwan 40  and accuse Taiwan of procrastinating on the establishment of the Three Links. Taiwan also exhibited the same behavioral pattern. For example, when China rebuffed the DPP Administration’s policy of progressive independence policy, Taiwan responded by adopting the Special Safeguard Mechanism against Products from Mainland and imposing a ceiling for prospective Taiwanese investment on the Mainland, inter alia, and accused China of politicizing trade relations by imposing antidumping investigations and safeguard measures.

The WTO should not be expected to ease the political fissure between the two sides. In fact, the difficulties of managing cross-strait economic ties after WTO accession have been underlined by dimming hopes for establishing “Three Links,” i.e. links in mail, transportation and trade between the two sides. Taiwan has banned direct trade, transport and postal links with mainland China since 1949. The only exception to the “No Three Links” is the so-called “Mini Three Links” between the offshore islands of Kinmen and Matsu and the Chinese coast. 41  Even the high-profile chartered flights around the Chinese New Year in 2003 can not be seen as a breakthrough. Although Taipei allowed local airlines to fly to destinations on the mainland for the first time, it insisted that flights include a stop in Hong Kong or Macau and did not permit mainland carriers to take part.

Facilitating Cross-Strait Trade Relations within the WTO Framework

Cross-strait trade relations within the WTO framework are not always hopeless. As an old Chinese saying goes, good fortune lieth within bad. There are several factors that also contribute to a minimum degree of normal relations between China and Taiwan in the WTO.

First, since Taipei eased its ban on trade relations in 1987, China and Taiwan have been natural trade partners due to the geographical, racial, linguistic and cultural proximity. There is no reason to doubt, particularly in an era of globalization, that such natural trade relations would be severed completely by political contentions.

It is conspicuous that both China and Taiwan have used internal trade powers to influence or manipulate their relationship with each other. Beijing is pressing its skillfully designed “business leverage for containing Taiwan politics” approach. The expected potential benefits from the expansion of cross-trade would result in tremendous pressure on the Taiwanese government for further lifting bans on trade between the two sides of Taiwan Strait. In this context, there would be a possibility that Taiwan would be induced to yield to China’s demand: recognizing the “One China Principle.” If Taiwan renounces correlating cross-strait trade to “special nation-nation trade” or recognizes cross-strait trade as domestic trade, Taiwan businesses would possibly be given privileges in China vis-à-vis businesses from other WTO members. For example, China has made it clear that if cross-strait transportation services are defined as domestic services, Taiwanese businesses will enjoy the privileges available to domestic shipping companies presumably under the United Nations Convention on the Law of the Sea (UNCLOS). 42  Taiwanese businesses are keen to tap the Chinese market and take the lead when China, pursuant to its commitments regarding WTO accession, begins to gradually open its market to foreign businesses. In order to meet the benchmark that China set, Taiwanese business would turn to the Taiwanese government for recognition of the “One China Principle.” 43 

Second, the WTO Agreement is not precluded from applying to trade relations between China and Taiwan. The WTO can be a restraining factor for both sides of the Taiwan Strait in their existing trade relations, while unable to bail out the volatile cross-strait relations. The WTO Agreement places both Beijing and Taipei under a legal framework that appeals to widely accepted principles and norms used by the international community. It drives the laws of both sides closer to each other. As empirical evidence has shown, the more similarity between Beijing and Taipei, the more likely they will deal with each other.

Third, the multilateral framework of the WTO creates many occasions for both sides of the Taiwan Strait to contact or even work with each other. Some occasions call for bilateral consultations in event of trade measures by either side that specifically addresses the other side or affects the other side 44  or in the event of trade disputes. 45  For example, after Taiwan ’s accession to the WTO, on March 23, 2002 China announced the launching of an anti-dumping investigation on steel imports from Taiwan , among others. Not long after the announcement, an anti-dumping investigation was launched against imports of PVC from Taiwan. On May 24, 2002 , China declared to impose temporary safeguard measures 46  on some steel products from Taiwan. 47  Under the WTO, such trade measures would call for consultations. Similarly, pursuant to the Understanding on Rules and Procedures Governing the Settlement of Disputes, disputes, when arising between the two sides, would also possibly lead to consultations. Since either side’s nonconforming trade policies towards the other side 48  harbor prospective disputes between the two sides, 49  it would not be surprising to see their trade relations evolve into disputes submitted before the Dispute Settlement Body and give rise to consultations. 50 

Some occasions call for direct contact in the multilateral context, for example, in the context of the Trade Policy Review Mechanism. According to the trade policy review procedures, upon the request of an interested member, the member whose trade policy is to be reviewed is required to provide the requesting member with information. 51  During the eight-year-long transitional period, other WTO members are scrutinizing China ’s trade policy. 52 

Having substantial interests in China, Taiwan is keenly interested in China’s trade policy, particularly in whether China would honor its commitments. In the first session of trade policy review of 2002, for example, Taiwan’s representative posed directly to his Chinese counterpart various questions, covering slash of tariffs, quota administration, prohibition of import of used electronic appliances, beer, films, etc. 53 

Fourth, the experience of China and Taiwan in APEC may serve as a lesson for dealing with each other in the WTO. 54  So far, the two sides have maintained a normal business-like relation in the APEC. 55 

Lastly, it should be noted that the approaches of either side affects the response of the other side. For example, China’s attitude towards talks in the WTO could be a result of Taiwan’s business-like approach in the WTO. It is too early for China, being sensitive to Taiwan’s every move, to say whether Taipei has behaved well in the WTO. However, if Beijing senses Taiwan’s business-like attitude in the WTO, it will be encouraged to deal with Taipei under the WTO framework.

It is a positive sign that China can act in a non-political manner with Taipei, and Taipei can take a business-like attitude in its relation with Beijing on international occasions. The best examples are the first two trade rows regarding antidumping and temporary safeguard measures in the post-WTO era. Indeed Beijing, against its WTO obligation, did not inform the Taiwanese Government, but rather informed only the Taiwanese companies or industry concerned of such investigations. 56  Nevertheless, when the Taiwanese Mission for WTO dissented by addressing China’s WTO mission, Beijing remedied its procedures. 57  As it was speculated that China’s new flexibility could open a channel for the first formal talks between the two sides after the WTO accession, Yen Ching-chang, chief representative of Taiwan’s delegation to the WTO, advised that no political implications should be attached to the consultations under the WTO framework between the two sides.

Concluding remarks

Accession of both China and Taiwan to the WTO has witnessed the co-existence of an opportunistic fever among businesses and a sluggish policy adjustment between governments across the Taiwan Strait. The compelling trade forces and entangling political contentions over Taiwan’s status is the result of co-existing business enthusiasm and governmental indifference. Given that the contention between China and Taiwan is a non-amenable zero-sum game by nature, the WTO should not be expected to ease the political fissure between the two sides. The post-WTO diplomatic struggle between China and Taiwan around Taipei’s identification in the WTO illustrates this point. Nevertheless, the fact that both Beijing and Taipei are in the WTO will provide the vague space for self-justification for either side whenever a minimum détente exists across the Taiwan Strait.

Given the functionalist nature of the WTO, a formula agreeable to Taiwan, encouraged by the international trade community, and acceptable to China should be established for the relationship between China and Taiwan in the WTO. To this end, the two sides should be prompted to take business-like approaches with each other in the WTO. Beijing should be urged to fulfill its obligations under the WTO Agreement, and Taipei should be urged not to push Beijing by attempting to take advantage of the WTO to its political ends.

Endnotes

  1 Nations’ representative offices to the WTO, based in Geneva, are accorded the status of diplomatic missions. Taiwan had operated its “Permanent Mission of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu” until February 2003 when Mr. Supachai Panitchpakdi, Director-General of the WTO met with Taiwan’s representative to the body - Yen Ching-chang - to issue three demands: that the title of Taiwan’s mission be changed to “office”, which is the title used by Hong Kong and Macau; that members of the Taiwan mission refrain from using the customary diplomatic titles and ranks; and that Taiwan refrain from using any words in WTO-related documents such as the country’s name or references to its central government that imply that Taiwan is a sovereign country. Although Supachai based his demand on a 1992 agreement by the General Council of the WTO’s predecessor, the General Agreement on Tariffs and Trade (GATT) when it was decided that “the representation of Chinese Taipei in GATT would be along the same lines as that of Hong Kong and Macau during the course of its status as an observer and subsequently as contracting-party delegation” and “titles carried by its representative would not have any implication on the issue of sovereignty”, Taipei insisted that the Director General’s demands were a direct result of pressure from Beijing.

  2 The WTO Agreement is hereinafter referred to as the Agreement Establishing the World Trade Agreement and the Multilateral Trade Agreements under the administration of the WTO.

  3 Article XVI (5) of Agreement Establishing the World Trade Organization reads: “No reservations may be made in respect of any provision of this Agreement. Reservations in respect of any of the Multilateral Trade Agreements may only be made to the extent provided for in those Agreements. Reservations in respect of a provision of a Plurilateral Trade Agreement shall be governed by the provisions of that Agreement.

  4 For example, see Article XXI of the General Agreement on Tariffs and Trade, Article XIV of the General Agreement on Trade in Services.

  5 Article XVI (4) of the Agreement Establishing the World Trade Agreement.

  6 For example, see Article 63 (2) of the Agreement on Trade-related Aspects of Intellectual Property Rights.

  7 For example, see Article XXII (1) of the General Agreement on Trade in Services, Article 4(2) of the Understanding on Rules and Procedures Governing the Settlement of Disputes.

  8 A recent example with China is that, in its notification addressed to Taipei concerning antidumping and temporary safeguard measure investigation, Beijing changed Taiwan’s official English name of “Chinese Taipei” in the WTO into “Taipei, China” in Chinese. Cf. note 16.

  9 As a matter of fact, it is because of the political classification that international law, as has developed so far, cannot provide a solution to the impasse of Taiwan issue, which highlights the dilemma of international law. As a matter of fact, even the theories of modern international law are not in any position to provide any clue to the Taiwan issue. In international law and its theories, rules concerning the state succession are irrelevant to this issue; also, rules regarding the succession of governments do not apply to this issue; again, rules concerning neither insurgence nor national determination are instrumental to the Taiwan issue. For a discussion of the relationship between international law and the Taiwan issue, see Hongdah Su, The EU Experience and the cross-strait Integration: Establishing a Bilateral Commercial Dispute Settlement Mechanism within the WTO Framework, 2 Issues & Studies 40 (2001) (Chinese), pp.10-11

  10 Taiwan’s withdrawal of its membership in the name of “Republic of China” at the admission of the “People’s Republic of China” into the United Nations was an example.

  11 China did spare its effort to block Taiwan’s accession to the WTO, because: first, it aspired to join the WTO, and therefore, needed compromising with existing WTO members on Taiwan’s WTO accession. Secondly, the WTO is basically concerned with trade issues. Therefore, once Taiwan’s status in the WTO was identified as “separate customs territory”, China did not act as usual in association with Taiwan’s membership in an international organization.

  12 The post-WTO era witnessed another failed endeavor of Taiwan to join international organizations. During the crisis of the severe acute respiratory syndrome (SARS) in 2003, Taipei applied again for membership in the World Health Organization (WHO). But Beijing thwarted Taipei’s attempt a in a quick move, despite the support of the US Congress, which passed a bill mandating the US government to seek ways for Taiwan to enter the WHO.

  13 Yin Cunyi and Jiang Shan, Cross-Strait Economic Cooperation Mechanism (in Chinese), 4 China Review 52 (2002), p.11.

  14 John Mo, A Preliminary Study of Cross-Strait Direct Transportation Links Arranged by Non-Governmental Channels (in Chinese), paper submitted to the Annual Conference of China International Economic Law Society 2002, Dalian, 18 September 2002.

  15 As to the definition of “one China”, the Chinese government’s original position is that, “There is one China in the world. The People’s Republic of China represents that China , and Taiwan is part of China .” This definition is still a valid one when it is used in the world community. However, since the pro-independent DPP came to power in 2000, in hopes of gaining the support of the Taiwanese people for its “One China Principle”, China has amended the definition to, “There is only one China, both the Mainland and Taiwan are part of China, and China’s sovereignty and territory can not be severed.” From purely legal perspective, the “Republic of China” helmet that Taiwan carries is not easily to be transformed to a “Republic of Taiwan” system and even more difficult to be transformed into a “one country, two systems” hypothesis, unless a constitutional revolution takes places. See Hongdah Su, The EU Experience and the Cross-strait Integration: Establishing a Bilateral Commercial Dispute Settlement Mechanism within the WTO Framework, 2 Issues & Studies 40 (2001) (Chinese), p. 7.

  16 In November 2002 China notified Taiwan ’s Mission for the WTO of a desire to talk over exports of cold-rolled steel. In its correspondence China referred to Taiwan ’s mission as an economic and trade office rather than using its official title. Taiwan promptly told the Chinese side that it had no obligation or intention to sit down for talks on anything until requested to do so in the appropriate manner, that is, using the appropriate title. China overcame its reluctance to do this so that talks could start in January 2003.

  17 In the words of John C.C. Deng, Vice Chairman of Taiwan’s cabinet-level Mainland Affairs Council, Taipei ’s official position is:

“1. Taiwan is willing to utilize all possible avenues, including the WTO, to address trade issues encountered by both sides, in order to achieve a normalized trade relationship.

2. For the long-term benefit of the WTO, both sides shall refrain from raising political issues in the organization.

3. Both sides should engage each other in a spirit of cooperation. Consultation is the best means to address problems.”

See John C.C. Deng, How Will Taiwan Interact with the Mainland under WTO? , Taiwan : Economic Issues Ahead, CSIS, Washington D.C. , February 6, 2002 .

  18 China , “US at Loggerheads over WTO Entry Wording,” People’s Daily, July 28, 2000 , available at http://fpeng.peopledaily.com.cn/200007/28/eng20000728_46739.html. Taiwanese media reported that the US trade ambassador responded by saying that “[t]he US position is that we cannot accept the language that China has put forth on Taiwan .” See “ US rejects China ’s WTO powerplay,” at http://www.haoyah.com/English/news/e_asia8.asp.

  19 In early 1965 Taiwan requested and was granted observer status at sessions of the General Agreement on Tariffs and Trade (GATT 1947). In 1971, this status was removed, following a decision by the UN General Assembly that recognized the People’s Republic as the only legitimate government of China . At its September 1992 meeting, the GATT’s Council of Representatives decided to establish a separate working party to examine the request for accession of the Separate Customs Territory of Taiwan, Penghu , Kinmen and Matsu (“Chinese Taipei”). The Chairman said he had carried out extensive consultations on the subject of establishing a working party. He noted that all contracting parties had acknowledged the view that there was only one China , as expressed in the United Nations General Assembly Resolution 2758 of 25 October 1971 . Many contracting parties, therefore, had agreed with the view of the People’s Republic of China (PRC) that Chinese Taipei, as a separate customs territory, should not accede to the GATT before the PRC itself. Some contracting parties did not share this view. There had been, however, a general desire to establish a working party for Chinese Taipei. See WTO document (March 2001): “China’s accession to the WTO and its relationship to the Chinese Taipei accession and to Hong Kong and Macau, China”.

 20 Article 43 of the Foreign Trade Law specifically provides that this Law, which governs “foreign trade”, does not apply to separate customs territories of the People’s Republic of China.

 21 International lawyers often refer to Article XIII of the Agreement Establishing the WTO as the “non-application clause”, which reads “This Agreement and the Multilateral Trade Agreements in Annexes 1 and 2 shall not apply as between any Member and any other Member if either of the Members, at the time either becomes a Member, does not consent to such application.” This clause does not necessarily relate to “national security.”

 22 In the process of accession negotiation, existing members said on some occasions that they did not want to see a politicized WTO merely because either China or Taiwan brings quarrels between them to the WTO forum.

China has never changed the position of “One China.” It does make every attempt, if possible, to “impose” the principle of “One China”. This is why China only ceased to insist on the wording— Taiwan would have to join the WTO as “a customs territory of China”— when it was made impossible by the opposition of the US.

 23 A Spokesman for the State Council Office of Taiwan Affairs confirmed this position in the first official statement after Taiwan’s accession to the WTO.

  24 For example, see Guo Pingtan et al, Cross-Strait Trade Relations in the WTO Context (in Chinese), Internal Reference for Reforms (Gaige Neican), 2001 (17), pp.33-36.

  25 Cao Jianming et al, Treatises on WTO and Cross-Strait Economic Relations, Shanghai: Shanghai Institute of Taiwan Affairs, 1999, pp. 29-30.

  26 Mr Shi said in an interview with the Financial Times. See Mure Dickie , Taiwan and China Move Closer to Official Talks , Financial Times, November 25, 2002 .

  27 See above note 24.

  28 <http://www.peopledaily.com.cn>, 31 December, 2002

  29 Central News Agency , 24 December 2002 .

  30 See above note 8.

  31 Central News Agency ( Taiwan ), 24 November 2002

  32 <http://www.peopledaily.com.cn>, 31 December 2002 .

  33 See above note 16.

  34 To the Commentator: In the WTO, consultation is a part of the formal process for dispute settlement. A consultation must be initiated by a formal request, which will be circulated to all the WTO members through the WTO Dispute Settlement Body. In contrast, private bilateral talks can be held in an informal way and can be interpreted as irrelevant to the formal process of dispute settlement.

  35 Financial Times quoted one Taiwanese trade official as saying: “I can’t see any reason why they cannot negotiate under the framework of the WTO.” Mure Dickie, Taiwan and China Move Closer to Official Talks, Financial Times, Nov. 25, 2002.

  36 Central News Agency ( Taiwan ), 24 November 2002 .

  37 Statistics of the General Administration of Customs of China (2001, 2002 and 2003)

  38 An Analysis of Cross-Strait Trade (in Chinese), Board of Foreign Trade of Taiwan, Ministry of Economic Affairs, Taiwan, March 1, 2004.

  39 The Statistic Data are available at the website of the Board of Foreign Trade, Ministry of Economic Affairs, Taiwan : http://cus.moeaboft.gov.tw.

  40 cf. notes 46 and 47.

  41 The Provisional Implementation of “Mini-Three Links” between the Offshore Islands of Kinmen and Matsu and Mainland China, adopted at the end of 2000, authorize trade between the offshore islands of Kinmen and Matsu and the Chinese coast.

  42 Article 2(1) of the UNCLOS provides that the coastal state has sovereignty over its territorial sea. However, it is controversial to argue that this provision allows a costal state that is a contracting party to both the UNCLOS and the WTO Agreement to evade its WTO obligation regarding opening marine transport.

  43 Wang Yongqing, an influential industrial tycoon of Taiwan, in 2002 reportedly called for the Taiwanese Government to recognize the so-called “92 Consensus”, which means “One China, Separate interpretations”.

  44 See, for example, Article XXII (1) of the General Agreement on Trade in Services.

  45 See, for example, Article 4(2) of the Understanding on Rules and Procedures Governing the Settlement of Disputes.

  46 According to the Agreement on Safeguards, a WTO member may apply temporary safeguard measures (e.g. by imposing a tariff quota restriction) to prevent surging imports of foreign products (regardless of their origins) from injuring its domestic industry for a period of six months and then it has to decide whether to apply the final safeguard measures or to remove the temporary safeguard measures.

  47 In order to prevent surplus steel products on the international market from flooding into the Chinese market, the Chinese Government introduced temporary safeguard measures on imports of some steel products starting from May 24, 2002, imposing tariff quota on imports of nine kinds of steel products of 48 tariff numbers, namely ordinary medium plate, ordinary sheet, silicon steel, stainless plate, coil rod, section, seamless tube, and billet, with a term of 180 days. A portion of these steel products was from Taiwan.

  48 For a discussion of the inconsistency between Taipei ’s trade policies and the WTO Agreement, see Huang Jie, Cross-Strait Trade Relations Deviating from the WTO Principles (in Chinese), China Review 2002 (3), pp. 48-50.

  49 Qingjiang Kong, The WTO Dispute Settlement Mechanism and Cross-Strait Trade Relations (in Chinese), China Review 2002(9), p. 57.

  50 Qingjiang Kong, Can the WTO Dispute Settlement Mechanism Resolve Trade Disputes between China and Taiwan ? , 3 Journal of International Economic Law (2002) 5, pp. 756-758

  51 See, for example, Article XXII (1) of the General Agreement on Trade in Services.

  52 Section 18 of the Protocol on the Accession of China to the WTO.

  53 Central News Agency ( Taiwan ), 24 November 2002 .

  54 On 2 October 1991, Director General Qin Huasun of China’s Ministry of Foreign Affairs and then Chairman of Senior Officials’ Meeting of the APEC, signed a Memorandum of Understanding, which agreed on the issues relating to entry of China, Hong Kong and Taiwan into the APEC. Taiwan acceded to the APEC as an economic entity.

  55 The only exception is with the APEC Summit 2001 in Shanghai. It had been a practice that Taipei sent a ministerial level official to attend the annual APEC Summit. For this APEC Summit, Taiwan’s President Chen Shuibian intended to attend personally. After his intention had been rejected, he ordered to dispatch Li Yuanzu, a former Vice President on his behalf, who was again rejected. As a result, Taiwan did not attend. Chen Shuibian’s move was regarded as a sort of political maneuvering, without which the APEC Summit 2001 would have been no different. For a discussion of China ’s approach towards Taiwan in the APEC, see Li Qiongli et al (ed), A Study of the APEC and the development of Cross-Strait Relations (in Chinese), Taipei : Chinese Taipei APEC Research Center , September 2001.

  56 According to the Agreement of Implementation of Article VI of the General Agreement on Tariffs and Trade, when an antidumping investigation is launched, public notice must be given of it to interested parties, including exporting WTO member and known exporters.

  57 Central News Agency ( Taiwan ), 24 November 2002.