Taiwan is sharing its technical know-how with fellow APEC economies and opening diplomatic channels along the way.
The training center at Chunghwa Telecom in Taipei took on the feel of a global village this summer, when 20 foreign delegates arrived from six countries in South America and Southeast Asia, all of which are members of Asia Pacific Economic Cooperation (APEC). The participants, representing both the private sector and government, were taking advantage of seminars on information and communications technology held at Taiwan's largest telecom company and organized by the Secretariat of the APEC Digital Opportunity Center (ADOC), located in Taiwan. "I'm learning a lot from Taiwan, which amazes me with its highly developed information sector," says Stephen Damien, a Papua New Guinean delegate working for a private consultancy.
While Taiwan's participation in international organizations is often vetoed by China, its importance to the global economy has persuaded some trade-based regimes, such as the World Trade Organization (WTO) and APEC, to weather Beijing's criticisms in order to include one of the more dynamic economies of East Asia. By its participation in APEC, Taiwan benefits from a boost in visibility internationally and through consultations with the 20 other APEC members, while those members in turn get a closer look at the engines of Taiwan's growth.
Since joining APEC as a member economy in 1991 (APEC refers to its participants as member economies as opposed to member countries to emphasize the economic focus of the organization), Taiwan has shared its experiences in developing its agricultural sector and small and medium-sized enterprises. This was the developmental base upon which Taiwan constructed the high-tech manufacturing that drives its economy today.
To expose APEC members to successes in Taiwan's high-tech sector, Lee Yuan-tseh, the proxy for Taiwan's president Chen Shui-bian of APEC meetings for the last three years, put forward the ADOC initiative at the Leaders' Meeting in Bangkok in 2003. Establishing a digital training center, Lee suggested, would assist APEC members lagging behind in information technology and help them achieve the Brunei Goal, proposed in 2000, which intends to close the digital divide in the region.
These efforts fall under the rubric of Economic and Technical Cooperation (ECOTECH), an important policy objective of the organization. "Taiwan contributes to APEC mostly through ECOTECH, and the ADOC is the best example in this regard," says David Hong, acting president of the Taiwan Institute of Economic Research (TIER) and director-general of the Chinese Taipei APEC Study Center, a government-sponsored organization founded in 1998 under the TIER.
Under the auspices of ADOC, Taiwan hosts annual training programs. To promote the initiative, ADOC offices have recently been set up in Peru, the Philippines and Vietnam. Strong in information technology, Taiwan is likely, according to Hong, to propose another initiative to narrow the digital gap in the region at the Leaders' Meeting in November in Busan, South Korea, the host economy for APEC 2005.
Although APEC is primarily concerned with trade, factors that impact the free flow of goods and the normal functioning of the global economy also pop up on its radar. After the outbreak of severe acute respiratory syndrome (SARS) in the spring of 2003, for example, APEC organized the Health Task Force. Working with Thailand and the United States, Taiwan initiated the ad hoc two-year unit in October of that year, and its mandate was later extended for another two years. Presently, there are no indications of SARS, but other health threats, possibly disastrous to the economy, still stalk the region. The devastating tsunami that crashed through South Asia at the end of 2004 and the region's frequent earthquakes are reminders of the necessity of regional coordination on health and safety issues.
Most recently, cases of bird flu have jangled nerves in the region. At the year-end APEC Leaders' Meeting in 2004, Lee Yuan-tseh argued for local development and production of flu vaccines. The vast majority of factories producing flu vaccines are located in Europe and America. As a result, once a major flu epidemic breaks out, demand for vaccines outstrips supply, leaving Asia especially vulnerable to viral attack as it scrambles to limit damage. Lee's proposal focused on making Taiwan a regional producer of flu vaccines, allowing it to cover its own needs and those of nearby countries. Taiwan plans to open bidding soon to international companies to construct research and manufacturing facilities.
The benefits of Taiwan's participation in the regional economic forum run both ways. Even as Taiwan is sharing the secrets of its economic successes, it is opening informal diplomatic channels to other nations in the Pacific region. APEC then has presented an opening for Taiwan to navigate around Beijing's diplomatic blockade. "APEC provides opportunities for Taiwan's government officials to accumulate negotiating experience at international meetings," says John Chen, director-general of Department of International Organizations of the Ministry of Foreign Affairs (MOFA). Chen's department, which coordinates APEC affairs within government agencies, encourages as many trips to APEC meetings as possible.
Taiwan, which today is barred from participating in the United Nations (UN) because of China's objections, needs alternate routes to multilateral diplomacy in order to raise its profile on the world stage. And participation in APEC allows more countries to see the value of including Taiwan in multilateral trade regimes. "Taiwan's participation in APEC allowed it to raise international support when trying to enter the WTO," says Kristy Hsu, associate research fellow at the Chunghua Institution for Economic Research.
In the absence of UN membership, APEC and the WTO, which accepted Taiwan as a member in January 2002, are the two most important channels linking Taiwan with the international community. "APEC is the only organization in the Asia-Pacific region that provides negotiation channels between governments," says David Hong of Taiwan's APEC study center. "Even more importantly, its Leaders' Meeting is the only occasion where Taiwan [through a representative appointed by the ROC president] can directly interact with heads of state from so many countries," he says.
Despite Taiwan's membership in APEC, China, a fellow member, attempts to limit Taiwan's participation in various ways. Taiwan, for example, is designated as "Chinese Taipei" because of China's objection to the use of the formal name of the country, the Republic of China, and the more recognizable name "Taiwan." China also objects to participation in the APEC meetings by the elected president of Taiwan; sending a proxy for its president to the APEC Leaders' Meeting has consequently become a norm. While each member economy (except for Hong Kong, which is represented by China) can send its minister of foreign affairs, along with its minister of economic affairs, to the APEC ministerial meeting, Taiwan's representation is limited to economic officials. The nation is also denied the chance to host high-level APEC meetings.
Nonetheless, APEC allows Taiwan to coordinate multilateral efforts in the absence of coordination with the UN, even on issues less specifically economic in nature, such as women's issues (which have received a great deal of attention at recent APEC meetings) and global counter-terrorism coordination. "Taiwan found it difficult to get involved in anti-terrorism efforts organized by the UN," Hong explains. The country's participation in security monitoring is important because of its location in prime shipping lanes in East Asia and its handling of enormous numbers of shipping containers. "Fortunately, through APEC, Taiwan can work with the rest of the world, lest it becomes a loophole in the global network against terrorism," Hong says. Terror, in other words, can travel along the same routes as trade, and APEC has had no choice but to address the issue.
Other regional organizations, however, are stealing some of the wind from APEC's sails. The Association of Southeast Asian Nations (ASEAN), in particular, is growing in size and covering a wider variety of issues than before. The 10-member association is becoming more influential, and sometimes replaces APEC as a forum for negotiations on multilateral issues. ASEAN was originally formed, in part, to balance against the influence of China, but the group today has drawn close to the Chinese juggernaut. Last July, for example, China and ASEAN established a free-trade zone. ASEAN, moreover, is a more exclusive bloc that is unlikely to accept Taiwan as a member. APEC therefore remains a lifeline to international coordination for Taiwan.
Despite the difficulties of Taiwan's multilateral efforts in Asia, the nation's economic prosperity ensures that it will be taken seriously in economic discussions. And because of the diverse nature of the global economy, a host of seemingly unrelated social activity influences international business. A recent example is APEC's interest in exploring the unique cultural products that cause new trends to wash over foreign shores. South Korea, for example, which is hosting this year's APEC conference, plans to hold an APEC Film Festival this month, featuring films from member economies. The economic relevance is not lost on Taiwan, where in the past couple of years Korean actors and pop singers have become increasingly fashionable.
This year, APEC also launched the Cultural Focal Point Network, which encourages each member to appoint a local body to coordinate exchanges on cultural affairs; in Taiwan's case, the task is being handled by the Council for Cultural Affairs. MOFA's John Chen believes that these apparently non-economic investments produce all sorts of dividends. "In the long term, under standing cultural discrepancies will reduce misunderstanding and boost security in the region," he says.
The flexibility of the organization results partly from its loose organizational structure, which encourages consultation and consensus building. APEC lacks the bite of the WTO, which can impose sanctions on wayward members, but its informal style creates discipline in a more subtle fashion. "Thanks to mutual pressure among member economies, APEC members are encouraging each other to liberalize their economies," says Chen.
Indeed, peer pressure can constitute a powerful impetus to push economies forward. Since 1996 each of the members has drawn up an Individual Action Plan, which details its efforts to liberalize trade and investment, and every year member economies take turns sending these reports to other APEC members for peer review (Taiwan did so in 2004, along with several other members). Having economic programs scrutinized by other nations can result in real motivation to outshine other members. APEC exerts healthy pressure on Taiwan, for example, to open up its trade and investment environment, as it does to all the other members, who in total account for 50 percent of global trade volume.
There is room for Taiwan, at the same time, to make its influence felt in APEC. "I think Taiwan has achieved its initial goal of enhancing its visibility through APEC," says Kristy Hsu of the Chunghua Institution. "Now it should consider making contributions that have long-term impact." Initiatives like the founding of the ADOC certainly help improve Taiwan's image, she says, but Taiwan should also play a role in setting agendas, dominating the direction of discussions at APEC. The goal is ambitious, however, and will be met with cold disapproval from China. Neither a political heavyweight nor a likely candidate for hosting APEC in the near future, Taiwan certainly will find it a great challenge to influence the organization. The country's clout must be accumulated little by little. And Taiwan must play to its strengths, such as sharing with other APEC members its economic and technical expertise--leading, in other words, by example.