- NBR - The National Bureau of Asian Research

The Taiwan Factor in the Vote on PNTR for China and Its WTO Accession

Nancy Bernkopf Tucker

The United States House of Representatives cast a crucial vote on May 24, 2000, to confer permanent normal trade relations (PNTR) status on China. The Senate is scheduled to consider similar the legislation during the current session. A positive outcome would both end the struggle conducted in Washington each spring since 1990 over China's trade privileges and ensure that American business has full access to the commercial package that China is negotiating with the members of the World Trade Organization (WTO). China's accession to the WTO and its acquisition of PNTR status are vital not just for the prosperity of its 1.3 billion people but also for the 22 million on the island of Taiwan. In recent years, Taiwan has shifted so much of its industrial production to the mainland of China that denial of PNTR would have a gravely negative impact on Taiwan's economy. Moreover, as a result of an informal agreement reached in 1992, the WTO will not act on Taiwan's application until China has been admitted. As a result, Taiwan has emerged as one of the strongest proponents of granting China membership in the WTO. Once both China and Taiwan have joined the organization, there is reason to hope that increased interaction and economic integration will encourage peaceful relations across the unstable Taiwan Strait.

On November 15, 1999, the United States and China signed an agreement on China's accession to the World Trade Organization (WTO) and on May 24, 2000, the U.S. House of Representatives voted 237 to 197 in favor of granting China permanent normal trade relations (PNTR). These milestone accords, when affirmed by the Senate, will potentially revolutionize China's economy and could have a radical impact on relations between China and Taiwan. For Washington, the accords could reduce strains inherent in dealing with Beijing and Taipei, as a multilateral forum assists in resolving some of the disputes between these antagonists. Over the long term, greater interaction and economic integration across the Strait could mean increased stability and a better chance for peace.

Taiwan and the PNTR Vote for China

The vote on PNTR with China and the issue of China's accession to the WTO are, of course, not synonymous. Having completed its bilateral negotiations with Washington, China can enter the WTO as soon as its negotiations with other members are resolved; this entry is in no way contingent upon congressional action to grant PNTR. Should...

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