EVENTS

Date:	Wednesday, April 5, 2006
Time:	8:00 AM -- 9:30 AM
Location:

April 2006

Repairing the U.S.-Taiwan Security Relationship

On April 2001, the Bush administration announced the release of the largest arms sales package to Taiwan in the history of bilateral relations. Among the dozen systems offered were advanced Patriot missiles, P-3 anti-submarine aircraft, and diesel-electric submarines. In the years since, efforts to fund these three systems through a single “special budget” have floundered on a combination of political opposition, bureaucratic mismanagement, and technical confusion. The special budget issue has emerged as a symbol of Taiwan’s commitment to its own defense and has overshadowed common interests in Taiwan’s democracy and security. How committed is Taiwan to its own defense? What can the United States and Taiwan do to repair bilateral relations and advance security cooperation? What does the special budget debacle reveal about the political constraints facing deeper U.S.-Taiwan security ties? At an  April 5 AEI event, Rep. Rob Simmons (R-Conn.), a leading Congressional authority on U.S.-Taiwan relations, and Mark A. Stokes, a former Pentagon senior country director for China and Taiwan, discussed these and other questions.

Dan Blumenthal
AEI

Ten years after the missile crisis and one year since China passed the Anti-Secession Law, it is an important time to address Taiwan’s security. Taiwan’s security relationship with the United States has been troubled, facing the problems of a transitional democracy, as well as the high expectations of the Bush administration in terms of arms sales. This has led to the mistaken impression that Taiwan is not serious about its own defense.

The Honorable Rob Simmons
U.S. House of Representatives

In April 2001, the Bush administration authorized a comprehensive defense package for Taiwan, which included eight diesel submarines--items that were long on Taiwan’s wish list. By 2005, there seemed to be reluctance on the American Navy’s part, especially from the nuclear navy, to approve these sales. In Taiwan, the Legislative Yuan has worked against President Chen Shui-bian’s efforts to appropriate a “special budget” to cover the arms purchase in order to embarrass him. Also, some in Taiwan saw submarine acquisition as provocative because they claim that submarines have offensive capabilities. In reality, submarines serve a defensive purpose by creating uncertainty for Chinese planning a blockade or invasion--an uncertainty that is critical to Taiwan’s defense given the continued growth of the Chinese Navy.

China has substantially increased their submarine fleet with four classes of ships designed and built in Russia, including advanced Kilo class fast attack submarine and nuclear strategic submarines whose missiles threaten far more than Taiwan. These projects have kept Russian shipyards alive at a time when American shipyards are in decline.

Therefore, submarines are necessary for Taiwan’s security, and for the most part, there is widespread support for the sale in both the Washington and Taipei, where people understand their defensive role. The submarines are not going to provoke an arms race; they will simply be used for defensive purposes. It is laughable to imagine eight submarines could really be able to orchestrate an invasion of China.

Regarding the cost of the submarine package, Taiwan’s defense budget as a percentage of gross domestic product (GDP) has been on the decline, so a total package cost of $6-12 billion is widely thought to be a high figure. But this figure reflects a mistake in the estimate: the U.S. Navy just assumed Taiwan would pay $12 billion for the United States to design and build this new submarine. In reality, Taiwan needs to first pay for the designs and choose its specifications before a realistic cost picture can be drawn. If we separate the two components, the cost of design will be reasonable, and we will actually have facts to work with. Ultimately, the Kuomintang must decide whether or not they are willing to fund their own defense; however, it is important that we separate the costs of design and production for the submarine package in order that they can make an informed decision.

Mark A. Stokes
Quantum Pacific Enterprises, Ltd.

Three misperceptions and myths plague our relationship with Taiwan. First, people think Taiwan does not take its own defense seriously. In reality, this is not the case, and estimates of Taiwan’s defense budget are vastly underestimated at $8 billion. More realistic estimates are $12 billion or 3.6 percent of GDP and higher. Second, people commonly perceive Taiwan as a free rider on some U.S. security guarantee. Since 1979, however, Taiwan has not been able to assume automatic American support and their fundamental assumption has been to work towards an independent defense. Finally, Taiwan is not a liability to the United States, nor is it a threat to the status quo. In fact, Taiwan’s full potential as a partner for democracy in the Asia-Pacific region is not fully utilized.

Taiwan shares three main values with the United States. Taiwan’s powerful role as a transitioning democracy can help promote democratic values in the Asia-Pacific region. Second, Taiwan is one of the largest supporters of American causes around the world and is one of the United States’ most loyal allies. Taiwan made tremendous sacrifices during the Cold War and continues to contribute to the efforts in Afghanistan and Iraq today. Their people are among the most charitable in the world, often giving without asking for anything in return. Finally, the United States and Taiwan share common economic values, and mutual trade is very important to both nations.

However, Taiwanese-American relations face three major challenges. First, Taiwan’s democracy is relatively new with the first transition of power occurring only six years ago. Taiwan is still in the process of developing partisanship and faces many of the problems of a transitional democracy. While the Taiwanese economy remains vibrant, there are problems with high levels of debt, a lack of government revenue, and high levels of industry migration to China. China continues to bring Taiwan closer economically, making the Taiwanese economy fairly reliant on the mainland. Finally, because Taiwan is a democracy, costs must be justified to the voters, meaning deals like the arms sales package must be supported by the people.

To help to solve these problems, the United States should designate the American Institute of Taiwan (AIT) as the Asia-Pacific Regional Democracy Hub. The United States should also enter into a Free Trade Agreement with Taiwan, a move that would strengthen its economic position relative to the mainland. Finally, it is important to enhance Taiwan’s security by creating a closer strategic partnership and treating Taiwan as the United States does other non-NATO allies like Korea and Japan.

This summary was prepared by AEI researcher Anne Siarnacki.