One China, Two Accessions

On January 1 2002, Taiwan ended its 11-year quest for accession to the World Trade Organization.  Coupled with China's accession, Taiwan's accession should provide some synergies and opportunities for companies that have operations in the Greater China market.  It is not clear, however, that all of this potential will be realized.  Cross-strait politics may yet interfere with the realization of the Greater China benefits that should arise from China and Taiwan being members of the WTO.  The opportunities still remain, however, if these issues can be resolved.

Taiwan's WTO Accession

By joining the WTO, Taiwan has attained one very important political goal: membership in a major international organization in which it can claim some level of equality with China. Statehood is not required for WTO accession, and Taiwan has joined as the separate customs territory of Taiwan, Penghu, Kinmen and Matsu, with a WTO name of “Chinese-Taipei”.  Taiwan was able to fend off efforts by China to have the WTO add “of China” to its “customs territory” designation, and the WTO is an organization that operates by consensus meaning every member has a potentially equal voice.  Except in certain limited areas, however, the most significant and important reforms in Taiwan's economy are not being driven by Taiwan's WTO accession package.  Taiwan is in the process of reforming its financial industry, as well as passing and amending laws to facilitate mergers and acquisitions among a whole variety of enterprises, and virtually none of this legislative and regulatory acitvity is related to WTO accession.
 
Cross-strait Issues