(本文翻譯自 陳冲 IPEF難登WTO大雅之堂 2022.05.30.)
The flames of the Russia-Ukraine war still raged. While, President Joe Biden has turned his attention to Asia and made his first trip since inauguration. The climax of the visit was as people expected to launch the Indo-Pacific Economic Framework for Prosperity (IPEF) with other twelve countries. This trip is deemed as America’s second big move of “Pivot to Asia” after President Obama held high the banner of Rebalance in 2016.
There should be particularly strong reactions here in Taiwan to the IPEF announced in Tokyo on May 23th. Those who looked forward to it would inevitably be disappointed while those who doubted the possibility of success show a cynical and not that surprised attitude. The statement of the Deputy Minister of Ministry of Foreign Affairs saying that he’s not informed in advance but only became aware that Taiwan was excluded after reading newspaper somewhat showed sign of “expectation and the hard-to-hide depression.” However, to those familiar with WTO affairs, the development and the result were not surprising and seemed even like a farce though.
There is a well-known love-hate story between the R.O.C. and GATT, the predecessor of the WTO. The details of the history from first participating in 1947, being forced to withdraw in 1950, reapplying to join in1990, to the transformation into WTO in 1995 are listed on domestic academic institutions websites. I will not waste time repeating again. In 2002, the R.O.C. finally returned to the WTO in the name of TPKM (The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu), but unluckily happened to the Doha Round negotiation hitting rock (actually it failed). As a result, since the beginning of this century no matter which party held power, it’s known that the material meaning of WTO to Taiwan is merely a stepping stone, allowing us to invoking Paragraph 5 of GATT 24 and the Paragraph 1 of GATS 5 to engage in regional economic integration. In other words, only if we seek bilateral or multilateral FTAs does the participation in WTO become meaningful. While, pity is that before 2008, due to the cross-strait tensions, only the FTA that accounted for less than 0.5% of the trade volume came into force. Tensions eased after 2009. Agreements like EFTA, ASTEP, ANZTEC were released while some others with substantial significance also entered final evaluation stage, but all fell flat as the Cross-Strait Services Trade Agreement turned unratified.
At the same time, the U.S. eagerly considered an Asia-Pacific economic organization without China. It gained dominance of TPP by using the back-door listing tactic of capital market. It rampantly recruited partners after joining, letting the member states to expand from four to fourteen and started detailed negotiations, trying to step into deeper area. Well, sometimes plans go astray. President Trump announced to withdraw from TPP (later renamed CPTPP) just right after taking office based on his biased views on international trade. Suddenly, the trade partners lost their focus. Thanked Japan for taking over, leading the brothers to CPTPP without America in the end. Some advocated re-entering CPTPP as President Joe Biden took office, but the application process was cumbersome and lacked strategic interests for the United States. If a new start was made, for the United States not lacking in FTAs, IPEF might be a shortcut to the Asia-Pacific.
However, for countries other than American and India, the coverage of IPEF is not comparable to that of RCEP. The four pillars advocated by IPEF have no direct interests to most countries, and thus provides little motivation to join. Most importantly, IPEF is not the trade agreement or customs unions the aforementioned clauses of GATT and GATS refer to. Without the benefits of tariff concessions and intellectual property rights protection, invited countries don’t responded enthusiastically, fearing to be deemed as anti-China alliance. In contrast, that Taiwan showed high willingness but ended up being informed by newspaper had something to do with America’s ambiguous attitude.
Not being invited to join the IPEF actually does no harm to Taiwan in terms of economy and trade. Seeing the newly invited India stubborn in Doha round negotiations and CPTPP issues before, we could see bleak future lies ahead. Not only can’t it be called a treaty legally (at best an administrative agreement), there is also little room for preferential tariffs. Even if lucky to reach agreement, it will still seem offstage in the WTO, so Taiwan government doesn’t need to be too concerned except for somewhat losing face. Set up a small IPEF on the supply chain seems more practical now.
Frankly speaking, what really matters to Taiwan is the FTA with the US and European Union arrangement like CPTPP that the US has abandoned. As for whether the CPTPP is a mirage illusory and unattainable? That’s another geopolitical topic.