Assistant Professor

Department of Political Science

National Taiwan University

　July 1998

1. Economic Cooperation

1. Open Regionalism

2. Bilateral Relations

3. The APEC Way

2. Political Significance

1. Three Chinas

2. CBMs

3. International Participation

The development of economic integration has taken place in the Asia-Pacific region as a result of market forces. This occurred without coordinated government efforts until the establishment of the Asia Pacific Economic Cooperation (APEC) in 1989. It had been proposed by R.J.L. Hawke, then Prime Minister of Australia, in order to promote first of all a successful conclusion to the Uruguay Round negotiations, second to tackle common economic interests and, third, to pursue the liberalization of regional trade and investment. [1] The membership went from 12 founding members to 18 in 1994. Members include Australia, Brunei Darussalam, Canada, Chile, the People's Republic of China, Hong Kong, Indonesia, Japan, the Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, the Republic of the Philippines, Singapore, Chinese Taipei, Thailand, and the United States.

APEC's agenda has taken shape through a series of functional initiatives, directed mainly through its ten Working Groups (WGs) and four Committees, senior official meeting (SOM), ministerial meetings, and Leaders' summit. Many of its 18 member-economies see the organization as a useful mechanism through which to promote their own economic interests.

The Republic of China on Taiwan joined APEC in 1991, together with the PRC and Hong Kong, under the name of "Chinese Taipei." It is the most important intergovernmental organization where Taiwan is accepted as a full member. In APEC, Taiwan can participate in, as an equal member, the negotiation process of economic cooperation in the region. The task of this paper is to analyze Taiwan's approaches to APEC. In order to present the whole picture, the paper will not only examine Taiwan's attitude towards the APEC organization and its policy in participating in APEC activities, it will also explore the benefits and importance of Taiwan's approaches to APEC.

Though APEC is an economic organization, its importance for Taiwan has many layers. Taiwan's approach to APEC, therefore, can be viewed in three dimensions: economic cooperation, political significance, and international participation. In economic cooperation, first, Taiwan supports the APEC commitment to "open regionalism." Second, through APEC activities and membership, Taiwan may develop closer economic ties and relations with other APEC members, including the PRC. And third, as a member of APEC, which emphasizes its unique decision-making process and the diversity of members, Taiwan learns to cooperate with other like-minded countries.

Political significance has two aspects: one is the political importance of the three Chinas being members of APEC together. The other is the confidence-building function of APEC.

The international participation dimension denotes Taiwan's ability to be a member of inter-governmental organizations and the benefits of being a member in APEC.

In the conclusion, the paper will propose a preliminary theory of participation in international organizations. From the four levels of participation, that is, applying, passive, active and leading participation, the paper concludes Taiwan's participation in APEC can better emphasize Taiwan's economic status and strength and learn more about international and regional affairs.

Just like other member economies, Taiwan views APEC as the most important regional organization for trade liberalization and economic cooperation in the Asia Pacific. First, Taiwan supports the APEC commitment to "open regionalism," which is in accordance with Taiwan's interests in promoting regional and global trade and investment. Second, through APEC activities and membership, Taiwan may develop closer economic ties and relations with other APEC members, including the PRC, which will contribute to Taiwan's future economic growth and bid for WTO membership. Third, as a member of APEC, which emphasizes its unique decision-making process and the diversity of members, Taiwan learns to cooperate with other like-minded countries.

The birth of the APEC forum was the consequence of two principal developments. First, the maturing of the initiatives of Asia-Pacific cooperation starting from the 1960s; and, secondly, the international economic environment during the 1980s.

Since the mid-1960s, there have been many efforts to unite the Asia-Pacific region in some form of economic integration. Those efforts included Japanese scholar K. Kojima's proposal for a Pacific Free Trade Area (PAFTA), the Pacific Trade and Development Conference (PAFTAD), the Pacific Basin Economic Community (PBEC), the Organization for Pacific Trade and Development (OPTAD), and the Pacific Economic Cooperation Conference (PECC). These institutional initiatives laid the basis for countries in the region to cooperate with each other in dealing with economic affairs.

The multilateral trading system deteriorated in the 1980's. There was a drift away from Article 1 of the GATT, that is, towards discriminatory trade policies and bilateral solutions to trade problems. The EC's single market policy and the North America Free Trade Agreement (NAFTA) were viewed as rising protectionism in response to the success of the Asia-Pacific economies, led by Japan and the Asian Newly Industrialized Economies (ANIEs). Furthermore, the mid-term review of the Uruguay Round in 1988 there was virtual stagnation in negotiations on agriculture, services and intellectual property rights.

Countries in the Asia-Pacific region realized that their economic success was largely based upon the post-war liberalization of international trade regime and trade expansion. They also understood that they stood to lose most from the disintegration of the GATT system. In such an international environment, countries in the region were anxious to express their concerns for effectively preserving an open trading system and for promoting intra-regional economic cooperation.

Therefore, APEC was established to promote "open regionalism." Open regionalism basically refers to nondiscriminatory or nonexclusive regional trading liberalization. The concept represents an effort to achieve the best of both worlds: the benefits of regional liberalization without jeopardizing the continued vitality of the multilateral system. [2]

According to Fred Bergsten, Director of the Institute of International Economics in Washington and American representative in the Eminent Persons Group, there are at least five possible definitions of open regionalism. It might turn out that all five can be implemented simultaneously as well as independently. The first is "open membership" which refers to any country that indicates a credible willingness to accept the principles and rules of the institution. The second is "unconditional MFN," that is, trade liberalization would be extended unconditionally to all of the members' trading partners without new preferences or discrimination. The third is "conditional MFN" which offers to generalize its reductions in barriers to all nonmembers that agreed to take similar steps. A fourth definition of open regionalism would be "global liberalization" which is for the members to simply continue reducing their barriers on a global basis while pursuing their regional goals. The last possible definition is "trade facilitation" which ignores traditional border measures and works on facilitating trade through nontariff and nonborder reforms. [3]

APEC embraced the concept of open regionalism at its inception in 1989 and has championed it ever since. In the 1994 Bogor Declaration, Leaders of all APEC economies agreed "to achieve free and open trade and investment in the Asia-Pacific" by a certain date. They emphasized that APEC "will achieve this goal in a GATT-consistent manner" and "we wish to emphasize our strong opposition to the creation of an inward-looking trading bloc that could divert from the pursuit of global free trade." The APEC leaders at Bogor added that "the outcome of trade and investment liberalization in the Asia-Pacific will not only be the actual reduction of barriers among APEC economies but also between APEC economies and non-APEC economies." [4]

Trade has been the engine of growth for Taiwan's economy. Taiwan's economic development is due to its effort to liberalize trade and investment with the rest of the world, and its effort to promote economic cooperation with other countries in the region as well. As professor Tzong-shian Yu observed, by the 1980s, Taiwan's industrial structure had been transformed from a labor-intensive industry to a technology-intensive and capital-intensive industry. And then, Taiwan's "economy underwent liberalization, with protectionist policy measures being eliminated and financial activities starting to depend on market forces rather than on government management. Private banks increased rapidly and tariffs declined sharply." [5]

Structural transformation of Taiwan reached the point where a mere 4 per cent of GDP was generated by agriculture. Taiwan's transition from a developing economy to a newly industrializing economy (NIE) was vividly shown by the relative increase in industrial exports. In 1965, 54 per cent of exports originated from the agricultural sector. In 1990, 96 per cent of them originated from the industrial sectors. Taiwan's largest exports have been changed from textiles, electrical machinery and apparatus to electronics and information technology products.[6]

• Gross national product (GNP) rose to US$ 263.6 billion making
  Taiwan the 18th-largest economy worldwide.
• Per capita GNP reached US$ 12,439, 25th-highest among nations with a population of more than 1 million.
• Foreign exchange reserves at year-end stood at US$ 90.3 billion, second highest in the world after Japan's.
• Merchandise exports totalled US$ 111.7 billion and merchandise imports US$ 103.6 billion, giving Taiwan a trade surplus of US$ 8.1 billion for the year. Taiwan was the world's 14th largest exporter and 15th largest importer, with two-way trade ranked 14th largest worldwide.

It is in Taiwan’s interest, therefore, to cooperate with other economies in the region to promote free trade principles and to encourage regional economic integration. Taiwan has participated in most institutions of economic cooperation in the Asia-Pacific region. Taiwan has taken part in PBEC and PECC activities and meetings, though these are unofficial in nature [8]. As a major trading country, Taiwan’s participation in regional and global trade and investment liberalization is an indispensable part of the process. Taiwan's minister stated that Taiwan should support APEC 's goals in promoting and liberalizing trade and investment in the Asia Pacific under the principle of WTO-consistency [9]. Therefore, Taiwan supports the APEC commitment to "open regionalism," which is in accordance with Taiwan's interests to promote regional and global trade and investment.

Trade among countries in the region was vertical, consisting of industrialized countries, Asian newly industrialized economies (ANIEs), and other developing countries and natural resource suppliers. The United States and Japan were centers of vertically linked trade networks. However, the development of APEC negotiations enhances the increasing bilateral economic interdependence between member economies. The high level of the meetings and the intense schedule give members not only a growing awareness of their similarities but also increase bilateral negotiations on various issues.

Under the APEC framework and negotiations, Taiwan has increasingly strengthened its bilateral relations with other economies in the grouping. This is because of the wide range of issues on the APEC agenda and level of participants from every member economy, which gives them opportunities to strengthen bilateral relations under the APEC agenda and process. For instance, besides the annual meeting of economic and foreign ministers, there are other areas of ministerial meetings and most of them are held annually. These ministerial meetings include trade (1994), environment (1994), finance (1994), small and medium enterprises (1994), transportation (1995), industrial science and technology (1995), telecommunication (1995), human resources development (1996), energy (1996), and sustainable development (1996).

The integration of regional markets and the shift of economic power from West to East have had a profound impact on the geographic structure of Taiwan's trade. Taiwan's increasing economic presence in terms of investment and trade in Asia in mainland China and ASEAN countries has prepared the way for deeper involvement in bilateral economic cooperation. Before joining APEC, however, intense trade and investment activities occurred among Taiwan, Hong Kong and two provinces in southern China. A large proportion of the goods that Taiwan exports to Hong Kong are transshipped to mainland China, making Hong Kong Taiwan's second largest export market just behind the United States. This kind of cross-border economic flow, which is known as the concept of "natural economic territory (NET)," invites scholars to argue that economic ties can outpace political ones [10].

However, due to the mounting political tension and confrontation between the two governments across the Taiwan Strait, the government has promoted a "Southward Policy" to diversify trade markets, and Taiwan's bilateral trade with Malaysia, the Philippines, Thailand, Indonesia, and Singapore has grown considerably. As a result of this process, the Asia- Pacific countries account for an increasing proportion of Taiwan's exports and imports.

Attending APEC has improved Taiwan's bilateral economic ties with other countries in the region. Under the APEC framework, Taiwan could hold bilateral minister-level and leader-level conferences discussing substantive issues during APEC meetings with countries that do not share diplomatic relations with Taiwan. Taiwanese ministers can hold bilateral minister-level meetings with other members' ministers during APEC meetings. For instance, in the Seoul meeting when Taiwan was accepted as a member in 1991, the first official contact between Taiwan and Japan at the ministerial level since Japan severed ties with Taiwan in 1971 was held. In the latest bilateral minister-level meeting, the 4th Finance Ministers Meeting in April 1997, Taiwan's Minister of Finance met with seven other ministers to negotiate bilateral financial problems during [11]. As to senior officials level, bilateral negotiations on substantive issues are held regularly under APEC framework. For example, in 1996, in order to negotiate and consult the content of Individual Action Plans, the APEC Senior Official Meeting (SOM) encouraged members to conduct bilateral negotiations with other members. The Director General of the International Trade Bureau has met with twelve members' senior officials at the SOM III in August 1996 [12].

One important characteristic of APEC is its recognition of divergence among members, including their different stages of economic development and different social and political systems as well. This recognition can be found in the 1991 Seoul APEC Declaration, in which the present direction was also set out. This document included the following goals:

1. regional growth and the achievement of common interests for the region's inhabitants,
2. the strengthening of a multilateral free trade framework in a global sense, and
3. the internal liberalization of trade and investment compatible with the GATT principles. [13]

The declaration also stipulated two methods of cooperation: (1) respect of mutual interests, by considering different stages of economic development and different social and political systems, and (2) open dialogue and consensus by respecting all members' views. [14] These basic principles and procedures were reconfirmed in the 1993 Joint Statement and the Declaration on an APEC Trade and Investment framework, which called for GATT consistency, consensus-building, flexibility, and diversity. [15] The unique style of consensus-based decision making and concerted unilateral action has become known as "the APEC Way. [16] "

As mentioned earlier, trade in the region was vertical, consisting of industrialized countries, Asian newly industrialized economies, and other developing countries and natural resource suppliers. The current members of APEC still trade under this vertical structure due to the diversity of their development. Taiwan understands the importance of APEC for its economic and trade development and realizes the significance of complying with APEC rules and principles, as proclaimed by its now Premier Vincent Siew and Minister of Economic Affaris Wang Chi-Kang [17]. Taiwan's liberalization of trade and investment in APEC was gradually accomplished, as Taiwan promised in the 1994 Bogor Declaration of APEC, Taiwan's Initial Individual Actions at the 1995 Osaka Meeting, and Taiwan's Individual Action Plan (IAP) at the 1996 Manila Meeting.

As a newly industrialized economy, however, Taiwan recognizes and respects the huge diversity in economic development in the region. The APEC way of "cooperative and voluntary liberalization" is compatible with the economic situation in Taiwan. Therefore, when vital domestic interests conflict with free trade principles, Taiwan has had to raise the concept of special circumstances to protect its domestic market and interests. For instance, Taiwan joined Japan, China, and South Korea in 1995 at the Osaka Meeting in refusing to further cut any tariffs on agricultural products [18].

Another example is the Information and Technology Agreement (ITA). An American proposal at the 1996 Manila Meeting hoped to sign an agreement, in which members agreed to start cutting tariffs from 1997 and to reach the goal of eliminating all tariffs for high-tech sectors by the year 2000 [19]. Because products in these areas are major export products in Taiwan, the agreement could have a great impact on Taiwan. The Direct General of the International Trade Bureau, I-fu Lin, stated that if the agreement were accepted by most members, then it would not only create a major impact on Taiwan's export development, but also add other criteria for Taiwan's WTO membership [20]. Therefore, officials in the Ministry of Economic Affairs pointed out that if the agreement were negotiated under the APEC framework, which emphasizes voluntary compliance and was non-binding, then Taiwan would like to see the agreement provide certain flexibility on the items and time frame for reducing tariff [21].

Nevertheless, though some members emphasize APEC's informal nature and that its principles and rules are non-binding, Taiwan realizes that, based on its international position and trade relations with other economies in the region, Taiwan should take all APEC principles and goals very seriously. As Jeffrey Koo, Taiwan's representative to the APEC Business Advisory Council (ABAC), said that the Manila meeting was actually very "formal" and "binding." [22]

Political significance has two aspects: one is the political importance for the three Chinas to be members together of APEC, the other is the confidence-building function of the APEC. First, joining the APEC in 1991, together with the PRC and Hong Kong, Taiwan became one of the "three Chinas" in the APEC forum. It was an important breakthrough for both governments across the Taiwan Strait and other APEC member economies as well. Secondly, as the most important Asia-Pacific grouping, APEC can be regarded as a confidence-building measure (CBM) which can bring together all the APEC members in negotiating mutual relations and create a peaceful and stable environment in the region.

1. Three Chinas

The inclusion of the PRC, Chinese Taipei, and Hong Kong, or the three "Chinas," is one of the most interesting characteristics of APEC. In all the APEC meetings, senior officials and ministers from the three governments can sit at the table simultaneously. As Professor Lawrence Woods noted, however, the formula to include all three Chinas in APEC was based upon the experience in the Pacific Economic Cooperation Council (PECC) in 1985-86 [23].

In 1991, when South Korea was the host country for the ministerial meeting, APEC successfully included these three governments. Negotiating membership for both the Beijing and Taipei governments was not without difficulty, however. Under persistent Korean diplomacy, as Yoichi Yunabashi pointed out, the final agreement on the wording of memorandums of understanding (MOU) between the APEC chair (Korea) and both Taipei and Beijing came in late September 1991 [24]. The PRC, Hong Kong, and Taiwan agreed to join APEC on the following terms: [25]

1. The respective designations of the three parties shall be the People's Republic of China, Chinese Taipei, and Hong Kong (Hong Kong will be re-designated as "Hong Kong, China" from 1 July 1997 according to the Sino-British Joint Declaration on the Question of Hong Kong signed on 19 December 1984). These designations shall be used in all APEC meetings, activities, documents, materials and other publications as well as in all APEC administrative and conference arrangements;
2. Without prejudice to the rights of APEC participants to appoint their respective representatives to APEC meetings, Chinese Taipei shall be represented at Ministerial Meetings only by a minister or ministers in charge of APEC-related economic affairs, while its "foreign minister" or "vice foreign minister" shall not attend APEC meetings. Chinese Taipei's delegation may include officials of "foreign and other ministries at or below the level of department director. Members of Chinese Taipei's delegation may use their official titles subject to the principles agreed upon in this Memorandum of Understanding;
3. Subject to the aforementioned terms, the three parties will participate in APEC meetings and activities on an equal basis with the current APEC participants.

Since 1991, the two governments across the Taiwan Strait have sometimes clashed on protocol and procedural issues. For example, The PRC criticized Taiwan for using "Taiwan" instead of "Chinese Taipei" in the summary conclusion of the Working Group on Small and Medium Sized Industries. Taiwan argued that "Taiwan" was used to refer to the address, because "Chinese Taipei" might not be recognizable in international postal service [26]. As Yoichi Funabashi pointed out, China might use its position and influence within APEC to "punish Taipei and partners if political links between Taiwan and its APEC partners begin to augment the existing strictly economic ties." [27] It means that though there is a consensus to de-link political and economic issues in the Asia Pacific region, the line of separation is delicate and subject to every individual state's voluntary compliance with the consensus, especially for China, which has growing bilateral tensions with other member economies,

However, bringing the PRC and Taiwan together in the APEC forum leads to some important political implications and consequences. The two governments across the Taiwan Strait, though quarreling over titles and representation, actually have increased contact and cooperation over substantive issues under the APEC framework. Although there has not been any formal public meetings held between ministers from both sides during APEC conferences, talks and exchange of opinions have been conducted during APEC meetings, especially on agriculture, transportation, and trade issues. [28]

The inclusion of the three Chinas can also allow other countries in the region to engage them together. By bringing together Senior Officials and Ministers from the Beijing and Taipei governments and putting them at the same international table, APEC has provided a useful vehicle for others to engage the three players together and seek to influence their behavior in positive cooperative directions.

Confidence-building measures (CBMs) or the Conference- and Security-building Measures (CSBMs) are broadly accepted as an major element in reducing suspicions and tensions and as an important vehicle to promote mutual exchange and understanding between nations. The process of CBMs intends to create or increase transparency and information exchanges among countries. CBMs are therefore an important element in international peace and security. CBMs can also be viewed as the first stage of preventive diplomacy, which signifies active, rather than reactive, responses to situations that threaten peace and security [29].

APEC is a CBM in itself. Though there are many security organizations in the region promoting multilateral security dialogue and cooperation, such as the ASEAN Regional Forum (ARF) and the CSCAP, they have not come to the stage of negotiating substantive issues. Besides, the major functions of CBMs are to avoid conflicts and reduce tensions on the one hand, and to increase exchange and enhance confidence on the other. The grouping, process, and activities of APEC can bring about similar goals and purposes. The spillover effects of economic interdependence could lead to a positive-sum game, instead of zero-sum, in the political and security relations between states. As Joseph Nye states, either because of "raising the price" or "sense of community" or "web of interdependence," economic or functional interactions can create positive relations affecting the propensity of states to resort to violence [30].

APEC has developed into the most important organization in the Asia Pacific region with increasing international prestige [31]. Although APEC does not deal with political or security issues, members find that the clear distinction between economic and political issues is increasingly difficult. [32] In fact, regional economic cooperation has had a very important political impact. Political stability, for instance, is a crucial factor or precondition in achieving stable regional economic development.

Furthermore, since 1993, the APEC Economic Leaders' Meeting (AELM) has become the highest level meeting of all the APEC fora, though it stresses its informal nature. Currently, the agenda of leaders' meetings strictly limits discussion to economic matters, but the bilateral leaders' consultations and ministerial meetings during the AELM prove its political importance. Those meetings draw as much attention as the formal APEC meetings. By bringing together the 18 leaders of the APEC economies in a discussion of common interest and mutual benefit, leaders can learn from the process that cooperation rather than conflict can maintain and increase their policy goals more efficiently. The cultivation of strong, personal and political ties among leaders, whose political will ultimately defines APEC's direction, may help to create a sense of community among leaders and serve as a useful occasion for interchange not only on APEC matters but other global, regional and bilateral issues which can be discussed at bilateral meetings on the margins of the APEC gathering [33].

The confidence-building function of APEC reduces members' suspicion of involvement in multilateral economic and trade negotiations and makes them feel more compatible to engage multilateral dialogue. For instance, the PRC finds APEC a more congenial environment for engaging the world on trade liberalization issues. Various exchanges in APEC have also helped make the Beijing government more aware of the need for compromise on WTO accession issues. The APEC experiences of ASEAN countries has also helped them get actively involved in the process of multilateral negotiations on Asia-Pacific security issues under the ARF and CSCAP frameworks.

As for Taiwan, the importance of the CBM-function of the APEC grouping becomes evident. Due to the sovereignty problem, Taiwan cannot formally participate in any multilateral security organizations in the region. Taiwan cannot participate in the ARF meeting and can only send individual participants to CSCAP working group meetings. Being a member of the most important economic organization in the region, therefore, gives the Taipei government the opportunity to participate in a regional economic forum as an equal participant. The CBM-function of APEC in reducing tension and increasing confidence among member economies may also provide Taiwan with a better environment to conduct cross-Straits talks with the Beijing government in the future.

The international participation dimension denotes Taiwan's ability to be a member of inter-governmental organizations and the benefits of being a member in APEC. APEC is the most important inter-governmental organization in which Taiwan can enjoy full membership. Participating in APEC opens the door for Taiwan to take part in regional and international economic affairs.

Since 1971, when the PRC took over Taiwan's seat in the United Nations, Taiwan's participation in intergovernmental organizations (IGOs) has significantly decreased. Membership in IGOs in 1966 was 39, but it decreased to 13 in 1997 [34]. Factors for the decrease in Taiwan's IGO memberships include the "one state, one seat" rule, the opposition from the PRC to any IGO's attempt to accept Taiwan as a separate and independent member, and, therefore, the name of the Taipei government as a member of any IGO.

The "Olympic Formula," the name of "Chinese Taipei," has exerted continuous influence on Taiwan's future participation in inter-governmental organizations, both IGOs and NGOs [35]. Since the 1980s, due to Taiwan's increasing economic strength and its pragmatic foreign policy, Taiwan has drawn attention to the desirability of its participation in international economic organizations. The name of "Chinese Taipei" has been adopted by other economic organizations, including PBEC, PECC, the Asian Development Bank (later changed to "Taipei, China") [36], and then finally APEC.

For Taiwan, the chance to participate in APEC was also because of the adoption of "pragmatic diplomacy" in the 1980s, which was designed to "strive with greater determination, pragmatism, flexibility, and vision in order to develop a foreign policy based primarily on substantive relations. [37]" In return, APEC also helps Taiwan to further implement its policy of pragmatic diplomacy – to develop closer relations with other countries in the region and to seek to enter other functional organizations.

For instance, in January 1990, Taiwan applied for membership in the General Agreement on Tariffs and Trade (GATT), now World Trade Organization (WTO), as "the custom territory of Taiwan, Penghu, Quemoy, and Matsu." The PRC had applied for membership in 1986, but had not yet met the conditions for admission. The PRC argued that it must be admitted to WTO first, after which Taiwan can seek the PRC's approval for its admission as a separate customs territory. [38] Taiwan rejected the idea and sought support among WTO members for Taiwan's admission as a customs territory. [39]

APEC is probably the most important international organization that Taiwan can take part in its activities as a full member. Though Taiwan cannot maintain diplomatic relations with most states in the world, nor can the Taipei government take part in any inter-governmental organizations in which membership is restricted to a "sovereign state," using its economic and trade achievements and influence, the Taipei government has tried to enter some economic IGOs. Participation in APEC marked the first success of Taiwan's efforts, and APEC has also opened the gate for Taiwan's participation in economic IGOs, which can help Taiwan in gaining more international breathing space.

By participating in APEC activities, Taiwan not only reminds its Asian neighbors that Taiwan is an important economic partner, but also opens the door of international society to Taiwan. It’s the ticket to the club where Taiwan has been blocked for more than twenty years.

As the forces of regionalism and economic integration continue to proliferate in the international trading system, Taiwan cannot allow itself to be left out of these increasingly important economic groupings. Taiwan depends heavily upon international trade and investment flows to maintain its economic growth and standard of living. As the 14^th largest trading country in the world, Taiwan is definitively an important economic power. Therefore, APEC membership gives Taiwan recognition of its economic achievements that became known as the "Taiwan Miracle."

By joining APEC activities, Taipei has proved, to some extent, that a model of separating economic matters from international politics is feasible. It paves the way for Taiwan to join other economic organizations. That is, APEC is very important for Taiwan because it demonstrates the progress made in its endeavors to satisfy the conditions for WTO membership. The chance for Taipei's WTO bid, therefore, is encouraged by its participation in APEC which emphasizes WTO-consistency. In other words, APEC is a place of the training and building up actual results for Taiwan. Taiwan has received a warm welcome from other APEC member economies in joining the WTO [40].

Due to the rotation principle, Taiwan has hosted many APEC meetings and workshops. However, Taiwan has also been involved in some important, substantive courses and workshops and tried to contribute to the development of regional economic cooperation. For instance, in February 1993, Taiwan hosted the Trade Promotion Training Course for Medium and Small Enterprises. In 1994, Taiwan presented a report on "APEC Economy: Recent Development and Outlook" for the ad hoc group on Economic Trends and Issues, and undertook the project of the "Small and Medium Enterprises Survey." In the same year, Taiwan was entrusted with the vice chair of the Economic Committee and the International Coordinator of the HUDIT Network Project. From October to December 1997, there are seventy-five meetings in total according to the APEC Secretariat’s Calendar, and ten of them were or will be held in Taipei [41].

Though the MOU agreed by three Chinas in 1991 did not limit Taiwan's ability to host APEC conferences, the PRC is always suspicious of Taiwan's intentions to host APEC conferences and regards APEC as a major area of its "diplomatic offensive," [42] that is, to get more international recognition and exposure. Therefore, it is still questionable whether Taiwan could host the ministerial meeting and leaders' summit in 2001 or 2002.

For almost twenty years since leaving the United Nations, Taiwan can finally join an important and influential intergovernmental organization and almost enjoy the complete rights and privilege of a member. Taiwan's approach to APEC reflects its attitude and policy towards the organization, but also the importance of APEC for Taiwan. This paper explores Taiwan's approaches to APEC: economic cooperation, political significance and international participation.

The author would then like to propose a preliminary theory of participation in international organizations for evaluating Taiwan’s participation in APEC. Participation in the activities of international organizations can be divided into four levels: applying, passive, active, and leading participation. The last three levels of participation may refer to the participation in a given issue area of an international organization, not necessarily the overall participation or performance in that organization.

First, "applying participation" refers to the activities of countries, that either qualify for membership or do not, and are applying for membership to participate in the activities of any given organizations. The ROC on Taiwan and some other newly independent countries may have to go through, or remain at, this stage before they can be a member of an organization.

Second, "passive participation" means the level of involvement and participation is inactive. Third, "active participation" is the deep involvement and participation in the process and activities of a given organization. Indicators to distinguish passive and active participation include the involvement in activities, role in policy making, proposal, expression of opposite or different opinions, and attitude toward cooperation, and so on.

Fourth, "leading participation" denotes a country's leading role in the agenda setting, policy-making, or implementation of a given organization or issue of that organization. For example, Taiwan's aggressive pursuance of agricultural technical cooperation and Canada's strong support of the environmental issues can be viewed as leading participation.

After analyzing the 174 Reports of Attending APEC Conference, from March 1992 to July 1997, Taiwan's participation in issues such as agricultural technical cooperation, small and medium enterprises, and activities in the Economic Committee and the Working Group of Human Resources Development can be labeled as active participation. Most of the reports describe the process of the meeting, issues discussed in the meeting, proposals and different opinions expressed by members. Taiwan's participation in the above four issue areas demonstrates Taiwan's efforts to contribute to regional development in these areas and Taiwan's determination to earn respect and status in the APEC grouping.

APEC is crucial for Taiwan, from economic cooperation, and political importance, to international participation. Taiwan should learn to act more actively in accordance with its economic strength and status in APEC, which can provide the chance for Taiwan to integrate into regional and international agenda and activities.　

　Footnotes

1. R.J.L. Hawke, "Regional Cooperation: Challenges for Korea and Australia," address to a joint meeting of Korean business associations, Seoul, January 31, 1989, cited from Dilip K. Das, The Asia-Pacific Economy (New York: St. Martin's Press, 1996), p. 3.
2. Peter Drysdale and Ross Garnaut, "The Pacific: An Application of a General Theory of Economic Integration," C. Fred Bergsten and Marcus Noland, eds., Pacific Dynamism and the International Economic System (Washington: Institute for International Economics, 1993), pp. 183-224.
3. See C. Fred Bergsten, "Open Regionalism," Working Paper 97-3, Institute of International Economics, Washington, DC, 1997.
4. The Bogor Declaration, Selected APEC Documents 1989-1994 (1995), For the discussion of the Bogor Declaration, see Alan Oxley, "Political Hurdles to the Realization of the Bogor Declaration: The Need to Revisit 'Open Regionalism,'" Paper presented at the APEC Study Centers Regional Conference, May 1996, Manila.
5. Tzong-shian Yu, "Economic Development in Transition -- The Case of Taiwan," in Development, Trade and the Asia-Pacific, eds. By Basant K. Kapur, Euston T. E. Quah, and Hoon Hian Teck (Singapore: Simon & Schuster, 1996), pp. 328-340, at p. 329.
6. Dilip K. Das, The Asia-Pacific Economy, op cit., p. 208.
7. Economic Development, Council for Economic Planning and Development, See http://cepd.spring.org.tw/, 26 October 1997.
8. PBEC provides a forum for exchanging information among business people from the region. PECC, founded in 1980, promote regional economic cooperation with linking academics, private business, and governmental officials. See http://www.tier.org.tw for further information about Chinese Taipei's participation in these two organizations.
9. Economic Times(in Chinese), 27 November 1996, 2; Central Daily(in Chinese), 15 November 1996, 2.
10. The concept of "natural economic territory" (NET) was first put forward by Professor Robert Scalapino, See Robert A. Scalapino, "The United States and Asia: future prospects," Foreign Affairs, Vol 70, No. 5, Winter 1991-2, pp. 19-40.
11. Central Daily(in Chinese), 5 April 1997, 4; China Times(in Chinese), 7 April 1997, 4.
12. Reports for Attending SOM III, Ministry of Economy, August 21-23, 1996.
13. APEC Secretariat, Selected APEC Documents 1989-1994 (1995), 1991 Seoul, Joint Statement, Seoul APEC Declaration.
14. Id.
15. APEC Secretariat, Selected APEC Documents 1989-1994 (1995), 1993 Seattle, Joint Statement, Declaration on an APEC Trade and Investment Framework.
16. Yoichi Funabashi, Asia Pacific Fusion (Washington, D.C.: Institute for International Economics, 1994), p. 145.
17. Commercial Times(in Chinese), 17 December 1996, 2.
18. Yong Deng, "Japan in APEC: The Problematic Leadership," Asian Survey, Vol. XXXVII, No. 4, April 1997, pp. 353-367.
19. “APEC can serve as catalyst for ITA, telecom services,” Remarks to American Chamber of Commerce, Under Secretary of State Joan Spero, Manila, The Philippines, November 21, 1996.
20. United Dialy(in Chinese), 24 November 1996, 6.
21. Ibid.
22. Commercial Times(in Chinese), 17 December 1996, 2.
23. Lawrence Woods, Asia-Pacific Diplomacy (Vancouver: UBC Press, 1993), pp. 134-35.
24. Yoichi Funabashi, Asia Pacific Fusion, op cit, p. 74.
25. Ibid., pp. 74-75.
26. United Daily(in Chinese), 28 September 1996, 6.
27. Funabashi, Asia Pacific Fusion, op cit, p. 116.
28. Commercial Times(in Chinese), 16 September 1996, 1; China Times(in Chinese), 6 September 1996, 9.
29. See Michael Krepon, "The Decade for Confidence-building Measures," in A Handbook of Confidence-Building Measures for Regional Security, 2^nd ed., Michael Krepon, ed. (Washington, DC: The Henry L Stimson Center, 1995).
30. Joseph S. Nye, Peace in Parts: Integration and Conflict in Regional Organization (Boston: Little, Brown & Co., 1971), p. 109.
31. David K. Linnan, "APEC Quo Vadis?" American Journal of International Law, vol. 89, no. 4, 1995, pp. 824-834.
32. Yoshi Kodama, "Asia-Pacific Region: APEC and ASEAN," International Lawyer, Vol. 30, No. 2, Summer 1996, pp. 367-389.
33. Dewi Fortuna Anwar, "The Role, Significance, and Prospects of APEC: Contributions to Regional Security," Paper presented at the Asia-Pacific Security Forum, September 1-3, 1997, Taipei.
34. See http://www.mofa.gov.tw/chap2.html, September 25, 1997.
35. In the early 1950s, both the PRC, under the name of the "Olympic Committee of the People's Democratic Republic of China," and Taiwan, under the name the "Chinese Olympic Committee," took part in the Olympic Games. But the PRC left the Games in 1956 in protest Taiwan's participation, and it did not return until the 1976 Montreal Olympics. The International Olympic Committee wanted both Chinese parties to participate in the Olympics; however, the PRC asked that Taiwan's Olympic committee remain in the IOC as an organization representing a provincial part of the PRC. In 1979, the Nagoya resolution, voted by the Executive Committee, decided to the compromise: the national Olympic committee of the PRC would be named the "Chinese Olympic Committee" and would use the flag and anthem of the PRC, and the Olympic committee of Taiwan would be named the "Chinese Taipei Olympic Committee" and its anthem, flag, and emblem would have to be changed. See Gerald Chan, "The 'Two-Chinas' Problem and the Olympic Formula," Pacific Affairs, Vol. 58, No.2, Fall 1985, pp. 473-490.
36. In 1986, in order to make possible full membership for both the governments of Beijing and Taipei, the Asian Development Bank changed Taiwan's representative name from "Chinese, Taipei" into "Taipei, China" after Beijing joined the group. In protest of the unfair treatment, Taiwan refused to take part in any ADB activities in 1986 and 1987. However, Taipei resumed its involvement, under protest, with the ADB and returned to the annual board meeting in 1988 after President Lee advocated more pragmatic diplomatic measures. FBIS, China, 26 April 1994, p. 63.
37. Central Daily (in Chinese), 8 July 1988, 1.
38. Beijing Review 35, no. 26, June 29-July 5, 1992, p. 16.
39. See Authur Yeh, "Taiwan's Membership in the General Agreement of Tariffs and Trade," in The Role of Taiwan in International Economic Organizations, Yun-han Chu and Jennifer Arnold, eds., Taipei: Institute for National Policy Research, 1990, pp. 79-100.
40. Economic Daily (in Chinese), 22 November 1996, 2.
41. APEC Secretariat, APEC Calendar, http://www.apecsec.org.sg/whatsnew/calend/calendar.html, 26 October 1997.

42. Funabashi, Asia Pacific Fusion, op cit., p. 115.