The anticipated but nonetheless impressive victory by Tsai Ing-wen and her Democratic Progressive Party (DPP) in the Taiwan presidential and legislative elections on January 16 caught the popular imagination and led to wide international coverage, the more so because of the clear juxtaposition between the lively exercise of multi-party democracy in Taiwan, and increasing restrictions in China. The very different political dynamics on the two sides of the Taiwan Straits were thrown into sharp contrast by the lively campaign and electoral win. The White House and U.S. State Department both offered congratulations to Tsai and congratulated the people of Taiwan “for once again demonstrating the strength of their robust democratic system.” Canada offered its congratulations to the people of Taiwan “on exercising their democratic right and holding their presidential and legislative elections” through a statement from the Canadian Trade Office in Taipei (CTOT), Canada’s unofficial presence on the island, roughly equivalent to the American Institute in Taiwan (AIT).

That supposedly “subtly muted” statement attracted some commentary in Canada where there has been much coverage and commentary on the vibrancy of Taiwan’s democracy, the possible reaction of Beijing, and the implications for Canadian policy. Commentaries asking whether the Trudeau government will “stand with Taiwan or China,” or “choose Chinese trade over Taiwan’s freedom” have suggested that the Liberal government now has to make a choice, siding with values or economic development. There has even been a suggestion that Canada should reconsider its unofficial relations with Taiwan and upgrade the status of its non-diplomatic presence in Taipei. It is hard to know whether to take such proposals seriously, but it is worth reflecting on how reaction by Canada, (or other countries maintaining diplomatic relations with China but unofficial relations with Taiwan), need to be carefully calibrated.

Nothing would damage Taiwan’s interests more than ill-considered moves that would destabilize the careful and cautious relationship that China and Taiwan have been able to forge over the past eight years under the administration of outgoing KMT President Ma Ying-jeou. China and Taiwan have over 20 bilateral understandings, covering everything from direct flights between the Taiwan and the Mainland, tourist movement, student exchange, taxation, economic partnership, and many other aspects. There was even a groundbreaking “unofficial” meeting between Ma and Chinese President Xi Jinping in Singapore in November of 2015, the first such meeting since 1945. This dialogue and the bilateral understandings were developed on the basis of the acceptance by both sides of the so-called “1992 Consensus” whereby both China and Taiwan acknowledged there is “one China,” but with different definitions. The acceptance of this fundamental principle lays the foundation for eventual reunification, at some indeterminate point in the future and in some undefined way. In the meantime, while cross-straits relations improve, the political status quo prevails.

The DPP has always been reluctant to accept the one-China principle, given that its main electoral support comes more from those who identify with Taiwanese nationalism, and who see Taiwan as an independent state separate from China (the de facto situation today). During the 2000-2008 tenure of DPP President Chen Shui-bian, there was deep mistrust of Chen’s intentions on the part of China. Since at the time the legislature was still dominated by the KMT, there was a brake on Chen’s influence. When the KMT returned to power under Ma Ying-jeou on the basis of a platform that included opening up ties with China, the prospects for cross-straits relations seemed to improve. In 2012 when she ran and lost against Ma, Tsai’s ambiguous position on relations with China was a big factor in costing her the election.

This time around, she has been more careful, sending reassuring messages that she does not want to disrupt the status quo on relations with the PRC (although her electorate has sent a clear message to take the foot of the accelerator when it comes to forging closer economic relations with the PRC). A possible way forward to establish an ongoing basis for cross-straits dialogue may be a statement by the DPP as to the “non-deniability” of the one-China principle. In other words, the DPP would neither accept nor deny the premise of one-China, a position remarkably similar to the so-called “Canadian formula” that allowed Canada and China to bridge the gap on Taiwan in order to come to an agreement on the establishment of diplomatic relations in 1970. Under that formula, the PRC stated its position that Taiwan was an inalienable part of China and Canada “took note of” that position. It remains to be seen what form of accommodation will be worked out in the period leading up to Tsai’s inauguration on May 20.

Any move by a third party to intrude into this delicate calculus by appearing to change the status quo in terms of its relations with Taiwan carries high risks for the security of the region, not to mention the obvious negative impact on that country’s relations with China. Maintaining and improving relations with China is important not just for obvious economic reasons, but also for a range of motives including impact on regional security and development, shaping global governance, promotion of values and so forth, none of which is inimical to Taiwan’s interests.

It is worth noting that a mooted bilateral trade agreement between Canada and China would actually open the door to a bilateral agreement between Canada and Taiwan (Canada’s fourth largest export market in Asia). The only two countries that to date have reached bilateral trade agreements with Taiwan (New Zealand and Singapore) have also, not coincidentally,  reached bilateral agreements with China, and did so prior to completing their negotiations with Taiwan. While Taiwan is a separate member of the WTO from China, the acceptable formula that was reached when both economies acceded to the organization in 2001 was that they did so at the same time. Taiwan has expressed interest in future membership in the TPP (assuming it is ratified), and there is also some interest on the part of China. Nothing in the TPP disqualifies either economy from joining the trade agreement at a later date, and while it can be argued that earlier Taiwanese entry to the TPP could be in China’s interest, the most likely scenario is that both would need to join simultaneously.

Canada, and many other countries that maintain diplomatic relations with China, have been able to develop stronger relations with Taiwan on the basis of a pragmatic and realistic appreciation of cross-straits realities. Canada enjoys direct air links with Taiwan, Taiwanese visitors enjoy visa-free access to Canada (unlike PRC passport holders), and Canada and Taiwan have just reached an Avoidance of Double Taxation Arrangement (ADTA). Trade, while having potential to improve, is nonetheless flourishing and people-to-people links are strong. Dialogue is maintained through unofficial channels, as is the case with Taiwan’s relations with most other countries.

Canada supports and appreciates the development of Taiwan’s democratic institutions, but Tsai Ing-wen’s election, while significant, does not mean that a carefully balanced policy of unofficial relations that has worked for both countries for a number of years is no longer valid. While the election campaign leading to Tsai’s election was democratic and lively, this is now the third time there has been a peaceful transition of power in Taiwan from one party to the other. Ma Ying-jeou’s KMT wins in 2008 and 2012 were no less democratic than Tsai’s 2016 victory. Canada did not need to take sides between China and Taiwan then; it does not need to do so now. Maintaining relations with both China officially and Taiwan unofficially is not a zero-sum game.

How China will react to Tsai’s incoming presidency remains to be seen. Reaction will likely be cautious, with a mutual sounding-out of the formula that will be needed to keep cross-straits relations on an even keel. There is the risk of over-reaction by either side. The best thing that Canada and other countries can do to support Taiwan’s democracy is to continue to develop its relations with the island on the current non-official basis, adhering to formulas that have served all parties well in the past, while at the same time pushing forward to strengthen the Canada-China relationship both for economic and strategic reasons – while potentially offering Taiwan some additional economic breathing room.

Hugh Stephens is a Senior Fellow at the Asia Pacific Foundation of Canada, and a Fellow at the Canadian Global Affairs Institute. He is a former (1995-98) Director of the Canadian Trade Office in Taipei.