The art of the non-deal

With the election of Donald Trump as President, U.S. foreign policy is set for some interesting times ahead. Mr. Trump has an unorthodox perspective on China, characterising the U.S.-China economic and trade relationship as unfair and exploitative of the U.S. Throughout his campaign he hammered China’s currency policy and the offshoring of U.S. manufacturing jobs to China.
After the election, living up to his unconventional approach, the President-elect accepted a congratulatory telephone call from President Tsai Ing-wen of Taiwan. This was a departure from four decades of U.S. policy on Taiwan. Since 1979, when Washington shifted its political recognition from Taipei to Beijing, no U.S. president has had any official contact with the Taiwanese head of government. Predictably, the telephone call generated significant speculation about Mr. Trump’s approach to Cross-Strait relations. He added to this speculation by questioning the ‘One China’ principle in a tweet. In that tweet, he asserted his intention to use the principle as a bargaining chip to get better trade deals for the U.S.
Mr. Trump’s maverick approach can produce a potentially destabilising impact in the most sensitive issue in China-U.S. relations. China reacted swiftly, harshly cautioning that the ‘One China’ principle is not up for negotiation, and decried Mr. Trump’s understanding of foreign policy as “childish”. In Taiwan, there is a mix of reactions ranging from cautious to celebratory. In the U.S., the mainstream media’s reaction has been mostly one of incredulity at Mr. Trump’s possible ignorance of the issues at stake in suggesting renegotiation of the ‘One China’ principle.
The ‘One China’ principle
So what is at stake if the incoming U.S. administration wants to renegotiate the ‘One China’ principle with Beijing? The principle affirms Chinese sovereignty over Taiwan and is the cornerstone of bilateral diplomatic relations between Washington and Beijing. Any country that wants to establish political and diplomatic relations with China must agree to adhere to this principle and not recognise Taiwan as an independent country. Currently, 21 states recognise Taiwan as a sovereign country after Sao Tome and Principe severed diplomatic relations with it this week. Most of these are small Central American, African or Pacific island nations.
In practice, the ‘One China’ principle is a stabilisation mechanism that preserves the status quo over Taiwan’s political status while allowing it to function as an independent economic, civic and administrative entity. There is a corresponding system of bilateral and multilateral agreements that facilitate the smooth operation of the principle and allow Taiwan to participate in specific international organisations. The U.S. and China have both invested significant political capital in negotiating this stabilisation mechanism over the years. In the U.S., this mechanism also has bipartisan support with a dedicated Taiwan Caucus in the U.S. Congress looking out for Taipei’s interests. This is the second largest caucus in the U.S. Congress. The U.S. is also bound by its own law, the Taiwan Relations Act (TRA), to support Taiwan in case of a military conflict with China. Till now the U.S. has chosen to honour its commitments under the TRA by supplying Taiwan with state-of-the-art weaponry, affirming its role as the guarantor of Taiwan’s security.
Since 1979, Taiwan has had to negotiate its ‘international living space’ but it has largely honoured the ‘One China’ principle. This is owing to the clear understanding from Washington that any breach of the principle is not in the U.S. interest. At present, Taiwan has reciprocal unofficial ‘diplomatic’ and consular presence in all major countries including the U.S., France, Germany, Britain, Japan, Australia, India and Russia. However, it has struggled to become a member of any international or multilateral organisation, with a few exceptions. At present, Taiwan is a member of the Asian Development Bank, Asia-Pacific Economic Cooperation (APEC) and World Trade Organisation as ‘Taipei, China’, ‘Chinese Taipei’ and ‘Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu’, respectively. These are examples of creative nomenclature that simultaneously accommodate the interests of Washington, Beijing and Taipei without upsetting the political status quo.
Taiwan’s membership in each of these multilateral organisations has been contingent on the support of the U.S. and its allies. The successful operation of the ‘One China’ principle has, therefore, close engagement by U.S. allies. For example, South Korea and Australia actively supported Taiwan’s membership bid in APEC, pressurising Beijing to accommodate Taiwan’s trade and economic concerns.
The Chinese redlines
Even as Taiwan negotiates membership of international bodies, its bid to be recognised as anything more than a separate economic territory has been thwarted by China. Its campaign to join the World Health Organisation or the World Health Assembly is a case in point. While Taiwan was allowed earlier this year to participate in the World Health Assembly, Beijing linked its approval of Taipei’s participation to the latter’s endorsement of the 1992 Consensus. The 1992 Consensus is the current framework that guides Cross-Strait relations and allows for greater economic cooperation between the two sides. It specifically mentions that all Chinese on both sides of the Taiwan Strait belong to one China, but it leaves the interpretation of ‘One China’ to each side. In Taiwan, the incumbent Democratic Progressive Party (DPP) has traditionally been less enthusiastic in its support of the 1992 Consensus, as compared with the opposition Kuomintang (KMT). President Tsai Ing-wen (DPP) has spoken of following a ‘Taiwan Consensus’ for Cross-Strait relations and stopped short of publicly endorsing the 1992 Consensus. China has been critical of Ms. Tsai’s stance and has asserted the need for an explicit acknowledgement and endorsement of the 1992 Consensus. Following her inauguration in January 2016, China ensured that Taiwan was not successful in securing an invitation to participate in the UN’s International Civil Aviation Organisation despite the Obama administration’s endorsement of Taiwan’s participation. As is clear from the above, negotiation of the ‘One China’ principle is a matter of ongoing political accommodation by the U.S. and China to mutual benefit. However, an explicit challenge of this principle by the U.S. is a different ball game.
Beijing is likely to treat a challenge to the ‘One China’ principle as a direct challenge to its sovereignty. In the worst-case scenario, U.S. military involvement in a possible armed conflict over Taiwan cannot be ruled out. This would have repercussions beyond Cross-Strait relations and likely spill over into the current competition over control of the sea lanes in the South China Sea. Even a hint of use of force will harden Chinese presence in the South China Sea, which has seen significant increase in military deployment over the past year. This is where U.S. allies in the region – Japan, South Korea and Australia – will have to be brought on board as they are dependent on these sea lanes for smooth energy and trade flows. It would require the Trump administration getting U.S. allies to acquiesce to presenting a challenge to the ‘One China’ principle. Even if key allies like Japan would be in favour of cutting China down to size with regard to its territorial claims, Tokyo stands to lose more in economic terms than gain in political terms by endorsing any such initiative. The ‘One China’ principle is not, therefore, an economic quid pro quo between China and the U.S. and hence cannot be converted into one, as suggested by Mr. Trump, without fundamentally changing U.S. regional security strategy.
Trump’s game of chicken
The status quo will change only under four circumstances: (a) if China gives up its sovereignty claims on Taiwan; (b) if Taiwan agrees to reunify with the mainland; (c) if the U.S. withdraws its support to Taiwan; or (d) Washington revokes its commitment to the ‘One China’ principle. Of all these, the last would be the most disruptive as it would actively challenge Chinese sovereignty claims. The likelihood of China giving up its claim to Taiwan or Taiwan reunifying is difficult to imagine in the short to medium term. The U.S. abandoning Taiwan will come at a very high price for the traditional system of alliances put in place by the U.S. in the Pacific and East Asian region.
This game of chicken with China, as Mr. Trump proposes, is likely to misfire. This is not to argue that the U.S. could not alter its position on the ‘One China’ principle, but to ask what the U.S. stands to gain if it did. The quid pro quo being suggested by Mr. Trump that the U.S. hold out for better trade deals from China in exchange of the affirmation of the principle ignores the multilateral impact of any such move. Importantly, it dangerously underestimates the Chinese resolve in asserting its sovereignty claims over Taiwan. The Global Times, China’s official government newspaper, justified the use of force to unify Taiwan in the wake of Mr. Trump’s tweet challenging the ‘One China’ principle. While this is sabre-rattling for all it is worth, it sets the tone for an abrasive and non-productive U.S.-China diplomatic engagement under the Trump administration. And it certainly will not contribute to Mr. Trump being able to negotiate more favourable trade deals with China. In fact, his suggestion of renegotiating the ‘One China’ principle is likely to produce the contrary effect across the table in U.S.-China relations.
President Barack Obama has cautioned President-elect Trump about the consequences of upending the understanding based on the ‘One China’ principle. It is doubtful if Mr. Trump’s ‘America First’ isolationism will serve U.S. political or economic interests in the East Asian region. In fact, it is likely to destabilise the strategic and economic gains of the long-standing U.S. presence in the region as allies scramble to leverage the uncertainties of a Trump administration.
Madhura Balasubramaniam is a Master’s student at the Humanities and Social Sciences Department at IIT Madras; Sonika Gupta is Associate Professor at IIT Madras China Studies Centre.

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