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Many recent studies find that international political conflictâ€"operationalized in a variety of waysâ€"harms trade. Well-known cases help to underscore these general findings. For example, Cold War tensions helped to undermine East-West trade, and trade between India and Pakistan slowed sharply in the years after partition. On the other hand, however, trade between adversaries also appears to vary substantially across cases. Indeed, trade can sometimes flourish despite intense political rivalry. In the current relationship between mainland China and Taiwan, for example, China has become Taiwan’s largest trading partner despite persistent political tension across the Taiwan Strait.How can we explain variation in the extent to which states trade with their adversaries? Building on existing literature, I develop a framework through which to understand how domestic coalitions concerning trade with an adversary are likely to form. While some actors are likely to favor or oppose trade for purely economic reasons, those without a direct economic stake in the relationship are likely to focus more on the political and security consequences of trade with the adversary. In this framework, two variables emerge as central in determining a country’s trade policy with an adversary: the relative political strength of internationalist versus protectionist economic interests, and whether those concerned primarily with politics believe trade will have positive or negative political and security externalities. I use the framework to develop several testable hypotheses, and evaluate them via short case studies of three contemporary rivalries: China/Taiwan; India/Pakistan; and North Korea/South Korea ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]

The article focuses on economic interdependence and growing Taiwanese identity in cross-strait relations. It notes since the mid-1990s, the cross- strait relationship between the Republic of China on Taiwan (ROC) and People's Republic of China (PRC) has been marked with turmoil with periodic crises in which the possibility of an outbreak of armed conflicts appears to have been significant. Also described are the economic and social processes that are increasingly connecting Taiwan to the Chinese Mainland.

The article focuses on preventing tension in the Taiwan Strait. It cites that an outbreak of military conflict in the channel would have consequences for regional stability and the global economy. The first security priority for the second term of U.S. President George W. Bush will be preventing the conflict due to changing status quo as well as increasing urgency. One of the reasons why Taiwan is of considerable significance to the U.S. is that U.S. support for Taiwan is closely tied to U.S. interests in fostering newly established democracies.

The article offers legal perspective on the conflict and compatibility in the cross-strait relations between Mainland China and Taiwan. It notes that the government of the People's Republic of China (PRC) was eventually recognized in 1971 by the United Nations General Assembly as the only lawful representative of the entire China in the organization. Also compared and discussed is the legal framework created for both the Hong Kong Special Administrative Region (SAR) and the Macao SAR.

Most of the contemporary policy debate regarding the interdependence of trade and conflict has been preoccupied with devising responses either in favor of or in opposition to the long prevailing notion that trade is positively and unconditionally correlated with peace because trading partners fear that conflict will result in the loss of welfare gains from trade. The realist response implies that political foes trade willingly only when relative gains are equivalent, and the liberal position implies that trade promotes peace because trade partners prefer gains from trade to conflict. The China-Taiwan security conflict provides a counter-example to each argument. Through the advantages of non-cooperative game theory, we model a trade-conflict interaction to discover the conditions under which trade and conflict will occur between trade partners. [ABSTRACT FROM AUTHOR]