WASHINGTON - In the days before Taiwan's voters
rejected their government's increasingly confrontational
stance toward mainland China last Saturday, officials
from Beijing and Taipei were here to promote their
respective views on free trade. China, according to
Zhang Yunling, the director of Asia-Pacific Studies at
the Chinese Academy of Social Sciences, prefers a
regional arrangement similar to the European Union that
would provide a forum for discussing East Asian trade,
finance and even security.
An East Asian
economic community, said Zhang, would build on recent
bilateral trade and investment initiatives involving
China and other key players in Asia and "gradually bring
all countries together" around common objectives. The
Association of Southeast Asian Nations (ASEAN), which
has drawn up a free-trade agreement (FTA) with China,
would also play "a very important role", he said.
In contrast to the EU, however, an Asian
regional organization would not require member countries
to adhere to common political standards, such as
pluralistic democracy, Zhang told a seminar on Asian
regionalism organized last week by the Sasakawa Peace
Foundation. Though Zhang does not speak officially for
Beijing, his academy is funded and run by the central
government, and Zhang's views often reflect official
positions.
A few days after Zhang's speech,
Mei-Yueh Ho, Taiwan's minister of economic affairs, made
two appearances to press for a bilateral FTA between the
United States and Taiwan. Such an agreement would be a
"logical next step" for Taiwan, which is the
eighth-largest US trading partner, Ho told the US-Taiwan
Business Council. The council, which is chaired by
former US defense secretary William Cohen, represents US
multinational corporations with large investments in
Taiwan, and recently funded a major study of bilateral
trade between Washington and Taipei.
That study,
released while Ho was visiting Washington, argues that
the US government should create a free-trade area with
Taiwan specifically to overcome China's objections to
including Taiwan in its favored regional trade
proposals. Taiwan is "conspicuously absent" from
intra-Asian FTA discussions, the report states. "The
prospect of a US-Taiwan FTA thus has considerable
significance not only for its potential to increase
bilateral trade, but also because it might facilitate
Taiwan's participation in intra-Asian trade
liberalization."
If Washington took such an
initiative, the report claims, Japan might find it "more
politically feasible" to negotiate its own FTA with
Taiwan, "which in turn could pave the way for Taiwan's
participation in other bilateral and regional trade
liberalization initiatives". The report was published by
the Institute for International Economics (IIE). In
remarks to a seminar organized by the IIE, Ho backed the
report's conclusions. She said a bilateral FTA would
benefit US companies seeking an export platform in Asia
and would promote free and open trade throughout Asia.
Taiwan, she added, "has been deliberately frozen out of
the FTA process" in Asia.
In last week's
parliamentary elections, Taiwan's opposition party won a
surprise victory over the Democratic Progressive Party,
the ruling, and pro-independence, party of President
Chen Shui-bian. It is unclear how the opposition
Nationalist Party will proceed on trade issues, but
party leaders want Taiwan to adopt a much more
conciliatory attitude toward China than President Chen
has. That is likely to include trade and could therefore
spell trouble for a FTA with the US.
The loudest
voices in Washington favoring an FTA with Taiwan are
conservatives who believe that China poses a long-term
threat to US security. As noted in the IIE report, major
support "comes from pro-Taiwan political and security
voices in Washington looking to bolster Taiwan against
political pressure from Beijing". In late November, the
US and Taiwan held several days of discussions under the
bilateral trade and investment framework agreement.
These talks were aimed at removing Taiwan from a US
watch list of countries with poor records in protecting
intellectual property rights. Before embarking on
free-trade talks, Taiwan must show progress on that
count.
In his talk to the Sasakawa group, Zhang
did not specifically address the issue of a Taiwan FTA.
But he emphasized that a regional framework is China's
preferred mechanism. "Gradually there is regional
institution building," he said. In particular, "we need
some kind of regional financial arrangement". But
Taniguchi Tomohiko, an editor for Nikkei Business
Publications, said any regional arrangement must include
the United States. "The US should be fully engaged in
this process," he said. "I'm puzzled why the US is so
nonchalant toward Asia."
