SUBSCRIBE TO THE NIXON CENTER EMAIL BULLETIN

ff

THE TAIWAN RELATIONS ACT (TRA) AFTER TWENTY YEARS: LOOKING BACK TO LOOK AHEAD

Testimony before the United States Senate Committee on Foreign Relations. Hearings on "U.S.-Taiwan Relations: 20^th Anniversary of Taiwan Relations Act," March 25, 1999, Room 419, Dirksen Senate Office Building.

THE TAIWAN RELATIONS ACT (TRA) AFTER TWENTY YEARS: LOOKING BACK TO LOOK AHEAD

By

David M. Lampton

Mr. Chairman and Committee Members, I am pleased to be able to share my thoughts with you as we approach the Twentieth Anniversary of the Taiwan Relations Act (TRA). I wish to make four points: 1) The TRA and the Three Communiqués have served American interests well and simultaneously permitted the people of Taiwan to prosper during the last two decades. 2) There are tensions among the TRA and the Three Communiqués, but tinkering with the structure that exists is a very dangerous course, not the least for the people of Taiwan. 3) There are worrisome developments in the Taiwan Strait, as well as some hopeful signs. And 4), American policy should continue to be what it has been since Secretary of State Shultz uttered the following words in March 1987—"Our steadfast policy seeks to foster an environment in which such developments [cross-Strait exchange and cooperation] continue to take place." (1)

Mr. Chairman, if we ask ourselves where American forces could become embroiled in a major conflict any time soon, the locations would include the former Yugoslavia, the Middle East, the Korean Peninsula, and the Taiwan Strait. From this fact, I draw three conclusions. First, we need to manage the Taiwan Strait problem with the utmost care, not only out of a consideration of U.S. interests, but the interests of the people of Taiwan and the region as well. Second, proper management of the Taiwan issue is key to broader peace and stability in East Asia. As the TRA made clear twenty years ago when it was passed and signed into law: "Peace and stability in the area are in the political, security, and economic interests of the United States, and are matters of international concern;…" [Section 2(b)(2)]. And third, because the PRC is a central player in all four potential flash points mentioned above (two directly and two by virtue of its role on the UN Security Council), productive relations with Beijing are not a luxury, they are a necessity.

Consequently, the current downturn in U.S.-China relations is neither in American interests nor those of the people of Taiwan. It is not in American interests because the general direction of change in China and its international behavior conforms with American interests (though there are important areas of friction) and because Beijing generally has been minimally (though not always) cooperative as we have sought to manage the most dangerous hotspots. Further, the current deterioration is not in Taiwan’s interests because the more U.S.-China ties deteriorate the more hawkish Beijing becomes toward Taipei. Therefore, we should be seeking to utilize the forthcoming visit of Chinese Premier Zhu Rongji to resolve genuine problems.

The TRA and the Three Joint Communiqués Have Together Served America and Taiwan Well

The April 1979 TRA has been a critical component of what overall has been a successful policy with respect to "Greater China." By "successful," I mean that:

• Taiwan has undergone extraordinary economic growth over the last twenty years (per capita GNP in 1978 was US$1,450 and in 1997 it was US$13,467) (2);
• The Taiwan political system has moved from its own brand of authoritarianism to a multi-party competitive democracy;
• Taiwan continues to have 30,855 students and scholars enrolled in U.S. institutions of higher education (3);
• U.S.-Taiwan trade has gone up nearly 600 percent (not adjusted for inflation) in the 1978-1998 period (4); and,
• Although the security story is complicated, the extensive economic connections that now link the two sides of the Strait together represents a welcome incentive that works against conflict. In 1999, there are about 40,000 Taiwan firms in the PRC with total investment commitments in the US$40 billion range -- President Lee Teng-hui has referred to the PRC as Taiwan’s economic "hinterland." Of course, there are worrisome signs in the security domain (which I will address shortly), but we should not overlook the security gains that have been made.

At the same time that the people of Taiwan, largely by stint of their own admirable efforts, have made progress, the U.S.-PRC relationship has made important strides forward over the last two decades as well, current frictions, difficulties, and conflicts of interest aside. In the last twenty years the changes and progress have been impressive.

• The number of Chinese students and scholars studying in America have gone from nearly zero to nearly 47,000 (5);
• Two-way trade has gone from US$1.2 billion to $85.4 billion over the 1978-1998 period, though I am mindful that the trade deficit with China last January exceeded the deficit with Japan (6) and this year we may have a deficit in the vicinity of $60 billion. This, incidentally, is why we need a good WTO accession agreement with Beijing in order to be assured of improved market access for American farmers and service providers, among others;
• Americans now have existing investment in the PRC totaling over US$20 billion (7);
• China has joined a great number of international organizations and arms control regimes and it has been a constructive member of many while we acknowledge the lack of fidelity to some commitments in some important human rights and proliferation areas;
• Beijing and Washington have cooperated in various problem areas, ranging from the Korean Peninsula to the Sinai desert and Cambodia. I don’t need to tell this Committee that there are many serious concerns as well, in the human rights, proliferation, and trade areas, as well as the Taiwan Strait.
• And finally let’s not forget the central fact of importance to American interests. In the three decades prior to the 1979 normalization with the PRC, America fought one war directly with the PRC in Korea; had two very dangerous crises in the Taiwan Strait (1954 and 1959); and the United States became involved in the Vietnam War (in which there was limited Chinese involvement) in part because of concern about Beijing's revolutionary ambitions. In contrast, in the last more than two decades since the Shanghai Communiqué (followed by the subsequent two communiqués and the TRA) the United States has had one limited crisis in the Taiwan Strait (1995-1996) where Washington appropriately sent two aircraft carrier battle groups to clarify American commitments.

In sum, the central point is that the existing structure of relations has well served all three societies and we should not tinker with that structure unless we have compelling evidence that such tinkering will improve the situation. This brings me to the character of that structure – the TRA and the Three Communiqués.

The Current Structure of Peace (the TRA and the Three Communiqués) and the Danger of Tinkering

The TRA and the Three Communiqués all reinforce the steadfast U.S. position that issues dividing the two sides of the Taiwan Strait should be resolved peacefully – that is the core of the U.S. commitment and the heart of America’s interest. To this end, in the TRA the United States made it a matter of U.S. law that America "will make available to Taiwan such defense articles and defense services in such quantity as may be necessary to enable Taiwan to maintain sufficient self-defense capability" [Sec. 3(a)] and that the United States will "maintain the capacity" "to resist any resort to force or other forms of coercion that would jeopardize the security, or the social or economic system, of the people on Taiwan." [Sec. 2(b)(6)]

While the U.S. commitment to a peaceful resolution is consistent throughout the Three Communiqués and the TRA, it also is obvious that there are certain tensions among these documents and between these documents and changing reality. First, there is the tension that derives from the adherence to a one China policy coexisting with the TRA commitments mentioned above, and there are tensions that stem from the separate and increasingly distinct identity of the people of Taiwan. In this vein, there also is the problem of what specific U.S. behavior constitutes "unofficial" ties to the people of Taiwan.

With respect to changing identity on Taiwan, whereas in 1972 the Shanghai Communiqué could say, "The U.S. acknowledges that all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China," given the changing identity among Taiwan’s people and the emergence of a competitive party system on the island, it is far from clear that such a statement credibly could be made in 1999. Polls conducted in September 1998 and subsequently released by the Taiwan Mainland Affairs Council show that only 16.7 percent of people on Taiwan said "I am Chinese."

Another important area of tension is between the August 1982 Communiqué concerning weapon sales to Taiwan in which Washington said, "its [U.S.] arms sales to Taiwan will not exceed, either in qualitative or in quantitative terms the level of those supplied in recent years…," and the obsolescence of Taiwan’s older weapon systems, and the availability of new, more expensive and more capable, follow-on systems.

These inherent tensions among the Three Communiqués and the TRA, in the context of changes in Taiwan and technology, create problems for all three parties. Beijing asserts that certain interaction with Taipei violates the one China principle, violates the concept of "unofficial" ties, or that weapon sales to Taiwan exceed the limits of 1982. Taiwan, understandably chafes at the limits which current policy places on it. And, for its part, the United States can view increased PRC military power in the Strait (e.g. exercises like those of 1995-1996 or the subsequent gradual increase in missiles in coastal China) as creating an environment of tension that is inconsistent with a "peaceful resolution" or Taiwan’s security. Parenthetically, the 1982 Communiqué does not obligate the United States to reduce weapon sales irrespective of the security situation in the Strait.

Given these tensions two observations are key: 1) If the risk of conflict in the Strait were to decline, and cross-Strait cooperation were to increase, then the difficulties in implementing both the TRA and the Three Communiqués would diminish. Conversely, if Beijing employs coercion or Taiwan pursues de jure independence, the strains within the policy would mount and the ability to maintain the existent structure would erode, probably beyond repair. 2) In light of the preceding considerations, all three sides should be seeking to lower the temperature in the Strait and find means to increase confidence there. Expanding cooperation in the Strait is the only way to avoid conflict in the long run. This is the policy challenge – not tinkering with a structure of arrangements that, despite the problems, has served America and the region well for twenty years and to which no preferable alternative exists. Any attempt to legislatively reduce the current ambiguity would prove inflammatory to one side of the Strait or the other, encourage risk taking by one side or the other, and almost certainly would increase the prospect for conflict.

Having said that the existent structure has served America and the region well, there are some concerns I have concerning the current drift of events.

A Possible Drift Toward Conflict in the Strait—Some Worrisome Developments Along with Rays of Hope

There are some hopeful signs when we look at cross-Strait relations:

• Cross-Strait talks were resumed last October with Koo Chen-foo’s visit to the PRC for dialogue with Wang Daohan and conversation with President Jiang Zemin and Vice Premier Qian Qichen. A four-point consensus was reached at that time and it is encouraging that both sides announced last week that the next round of the Wang-Koo talks will occur in Taiwan this coming fall.
• Cross-Strait economic and cultural ties continue to grow, as mentioned above.

Acknowledging these positive developments, however, my recent visit to both sides of the Strait for discussions with citizens and leaders in both societies leaves me worried about the future. What are some of the things that worry me?

First, there is some, though not conclusive, evidence that Chinese policy concerning Taiwan has changed somewhat. Whereas Mao Zedong talked about resolving the cross-Strait situation in a hundred years and Deng Xiaoping in fifty, the formulation we hear now is "The Taiwan problem cannot remain unresolved indefinitely." In my view, there is no basis of trust or mutual interest that will allow for anything resembling early reunification between the mainland and Taiwan. Consequently, any attempt at early resolution will cause more problems than it will resolve.

Second, both sides of the Strait are acquiring military capability to prevent what each sees as the worst outcome for itself—de jure independence is the worst for Beijing and early reunification the worst for Taipei. Consequently, we could see an arms race that leaves everyone with less security, obtained at higher cost, subject to catastrophic miscalculation. The United States would be caught in the middle.

Third, as the identity of people in Taiwan is becoming more separate over time, this leads Beijing to place more emphasis on "deterring" separatism (coercion). This, in turn, simply compounds feelings of separation and alienation from the mainland on Taiwan.

And finally, all of the preceding is reflected in the different strategies that Beijing and Taipei are pursuing and which, I believe, make agreement in the near-term a very remote possibility. For its part, Beijing’s strategy is as follows:

• Induce the United States and Japan (and Russia) to make ever clearer and more binding commitments to the One China Policy. If this can be accomplished, there will be a big power fence built around Taiwan that realistically makes de jure independence aspirations infeasible;
• Try to drive a wedge between the United States and Japan, particularly as it relates to the U.S.-Japan Security Alliance, unless Tokyo and Washington specifically exclude Taiwan from the region of coverage;
• Over time, unless there is some negotiated understanding with Taipei, gradually reduce the number of states that recognize Taipei, reaching single digit levels of recognition of Taipei within the next few years—what people in Taiwan refer to as "strangulation." In 1998, Taipei had a net loss of three recognitions (with South Africa, Central African Republic, Guinea-Bissau, and Tonga as losses and the Marshall Islands as a gain). Taipei picked up Macedonia earlier this year, albeit this set off a reaction in Beijing that led to a veto of the extension of authorization for UN peacekeeping forces in Macedonia;
• Focus limited PLA modernization on creating the capabilities to inflict heavy costs on Taiwan for pursuing an independence course—this need not necessarily involve invasion. The destabilization of Taiwan’s economy is probably sufficient. As well, while it is not possible to defeat the U.S. military, raising the costs of any possible U.S. intervention may have a deterrent value on Washington, in Beijing’s view;
• Work to discourage Japan (and certainly Taiwan) from coming under TMD coverage (though the combination of North Korean missile development and the steady expansion of PRC missiles in the Strait are having the opposite effect);
• Make the PRC a progressively more attractive economic partner to Taiwan business and demonstrate that the PRC is a reliable engine of regional economic growth that Taiwan people need to maintain and increase their standard of living; And,
• Promise Taipei preferential policies even when compared to those applied to Hong Kong under the wide umbrella of "One Country, Two Systems."

For its part, Taipei’s strategy appears to be:

• Seek functional talks with Beijing that avoid issues that would imply any political subordination to the PRC. Pursue functional talks that make progressively clearer the separation of control and delineate zones of responsibility;
• Talk about eventual reunification, but fashion preconditions (democracy and equalization of wealth) that are sufficiently remote that they, in fact, nullify any possibility of "reunification" in any meaningful time frame;
• Continue to seek expanded breathing space internationally. Even when achievements in this regard may be unlikely, proceed with the effort because it meets popular expectations and makes it clear to the people of Taiwan that Beijing is hostile to their aspirations;
• Use the PRC’s limited military modernization (and the steady growth in the number of missiles) to justify more weapons purchases, particularly those that get the United States progressively more entangled in the island’s security;
• Keep a vigorous business relationship with the PRC so that Beijing will be reticent to forego the benefits of Taiwan investment, but do not permit economic dependence on the mainland to become so substantial that one’s own freedom to maneuver is greatly diminished; And,
• Make it clear to the U.S. Executive Branch that if it goes too far in accommodating Beijing’s concerns, that Taipei can and will play the "Congress Card."

Fostering an Environment Conducive to Peace and Stability across the Strait

We need to define an achievable, constructive goal. Such a goal is to contribute to a dynamic and constructive status quo. Beyond the United States maintaining its forward presence and military capabilities in East Asia, each side of the Taiwan Strait needs to reciprocally reassure the other that it will not seek its maximal goal for a long period of time, perhaps twenty-five years. In the case of Taiwan, such reassurance could take the form of a no-independence pledge and in the case of the PRC it could take the form of a no-use-of-force pledge. In the meantime, both sides would engage in a set of activities to build confidence and increase contacts. In short, the immediate goal should be to build a constructive, stable, and dynamic status quo. Increased economic contact and interaction appears to be the most positive force that is available. Further, the situation requires confidence-building measures such as those suggested below.

While the United States should NOT become a mediator or insert itself into talks, that does not mean that we ought to feel unable to express positive ideas to both sides through both public and private channels. Among such ideas might be the following:

It would serve everyone’s interests to reduce the chance of military incidents and an arms race in the Strait. Why don’t both sides initiate cross-Strait discussions about how to avoid such incidents? Why don’t they consider negotiating an agreement whereby missiles would be capped in exchange for Taiwan not acquiring TMD and restrained weapons purchases? Or, why doesn’t Beijing simply declare unilaterally that it will cease its Strait-area missile buildup in exchange for restraint on the other side? A unilateral halt to a missile buildup might very well reduce the need for a probably very expensive TMD system in Taiwan. Indeed, Taipei has already said as much (8).

Why don’t both sides consider the "Three Links" in exchange for more flexibility in providing a dignified global role for Taiwan (whether it be the World Health Organization, the World Trade Organization, the World Bank, the International Monetary Fund, etc.)? This is the kind of policy that would find support in the United States. Frankly, Beijing’s strangulation policy is not winning the hearts and minds of the Taiwan people. Keeping Taiwan out of organizations like WTO that would serve the tangible interests of people in Taiwan does not convince the Taiwanese that Beijing cares about their welfare. Similarly, direct, civil air transportation across the Strait is long overdue and I would like to see Taipei seriously consider this.

Why not propose a diplomatic cease-fire in which both sides agree to leave the number of countries recognizing each at current levels? The guerrilla war to buy the diplomatic recognition of small countries demeans both capitals, costs money, and erodes trust on both sides of the Strait.

The point of the above suggestions is not so much to push them specifically as to make a broader point. Developments in the Taiwan Strait have their dangers for the parties and for the United States and it is time for some new thinking on both sides of the Strait. While the United States should not become a mediator, it may well be that some good ideas can emanate from the American public and private sectors. In the meantime, Washington ought not to tinker with the structure of the TRA and the Three Communiqués, documents that while complex and difficult to implement have served us better than any of the alternatives.

Notes