Taiwan Today

Few Republic of China (ROC) citizens aged 50 and older are able to forget the atmosphere of uncertainty that plagued the country in the early months of 1979 after the United States switched diplomatic recognition from Taipei to Beijing on January 1 that year. “The emotions of grief and indignation spread across the nation, and both people and capital were fleeing Taiwan,” says David T. Lee (李大維), chairman of the Coordination Council for North American Affairs (CCNAA) under the Ministry of Foreign Affairs. “The youths of today can’t begin to imagine how people felt at the time,” adds Lee, who was a 30-year-old doctoral student at the University of Virginia when the United States recognized Beijing.

There was a renewed sense of hope after April 10, 1979, however, when US President Jimmy Carter signed the Taiwan Relations Act (TRA). “The act meant America would continue supporting the ROC even after diplomatic relations ceased between the two sides,” Lee says. “At the time, that was a great boost for Taiwan’s morale.”

Among other things, the TRA provides the framework that enables both countries to operate representative offices in each other’s territory. Thus, 1979 saw the CCNAA establish an office in Washington, D.C., and the American Institute in Taiwan (AIT) open its headquarters in Arlington, Virginia and a main office in Taipei. In 1994, the CCNAA office in the US capital took the name Taipei Economic and Cultural Representative Office in the U.S.

According to Lee, an early draft of the TRA proposed by the executive branch of the US government was rather sketchy and skipped over major issues, most notably security and arms sales to Taiwan. The US Congress responded quickly, however, by revising the draft to fill in such gaps. The CCNAA chairman, who wrote his doctoral dissertation on the legislative process of the TRA, emphasizes that the act had strong, across-the-board support in Congress, where both Democrats and Republicans showed great sympathy for Taiwan. In the 96-member Senate, for example, 90 senators approved the revised draft, while the six who opposed it did so because they wanted a further revision that would show even stronger support for Taiwan. “The fact that the US Congress significantly changed the initial proposed law indicates the respect as well as influence of Taiwan in Washington, and in the US more generally,” observes Arthur Cyr, a professor of political economy and director of the A.W. Clausen Center for World Business at Carthage College in Wisconsin.

Today the 35-year-old TRA plays a key role in maintaining and strengthening ROC-US relations. “It has permitted the United States to retain de facto relations with Taiwan, while formal diplomatic relations were shifted to the mainland China government in Beijing. There was no extraordinary, transforming change in the status quo, contrary to many predictions,” Cyr says.

According to Lee, it was unprecedented for the United States to promulgate a domestic act aimed at maintaining unofficial relations with another country. The fact that other nations have not enacted similar legislation after breaking official ties with the ROC is another indicator of the unusually close relationship between Taiwan and the United States. “It’s not a treaty signed between two countries that has an expiration date. The act is a US law that won’t be ended or revised without the approval of the US Congress,” Bau Tzong-ho (包宗和), a professor of political science at National Taiwan University, says of the TRA’s longevity and the stability it has engendered.

The content of the act can be summed up as a US pledge to continue de facto, substantial bilateral relations with Taiwan. Bau notes that a prime example of the TRA’s continuity can be seen in the way it echoes the security provisions of the preceding 1954 Sino-American Mutual Defense Treaty, which was terminated—as stipulated by the TRA—one year after formal ROC-US diplomatic relations were severed. Article 5 of the 1954 pact states that each party “declares that it would act to meet the common danger in accordance with its constitutional processes,” while the TRA states that “The President and the Congress shall determine, in accordance with constitutional processes, appropriate action by the United States in response to any such danger.”

“In other words, the US stated its intention to continue deterring non-peaceful means taken by mainland China toward Taiwan, and this serves the interests of both Taiwan and the US. For the latter, its interest involves maintaining peace and stability in East Asia,” Bau says.

The international situation has changed greatly since the TRA was drafted—notable events since 1979 have included the end of the Cold War, the rise of mainland China, the increasingly entwined relations between the United States and mainland China and the easing of cross-strait tensions—but Bau stresses that the TRA’s relevance remains. “The relationship between the US and mainland China is basically still confrontational, and Taiwan’s role is still crucial because it occupies a strategic position in the First Island Chain,” the political science professor explains, referring to the string of islands stretching from Japan through Taiwan, the Philippines and Indonesia. “Also, mainland China has never renounced the use of force against Taiwan in order to achieve unification.”

Shared Values

“The foundation of Taiwan-US relations extends far beyond Taiwan’s strategic position,” says Deputy Representative to the United States Leo C. J. Lee (李澄然). “More important factors that cement this alliance are our shared values such as democracy, rule of law and human rights.” Thanks to such shared values and the foundation provided by the TRA, the Taiwan-US relationship has continued to develop, particularly in recent years. Since President Ma Ying-jeou (馬英九) assumed office in May 2008, he has worked to rebuild mutual trust with the United States by following a pragmatic, low-key diplomatic approach, Lee says, referring to previous policies that were viewed as provocative by mainland China and the United States. The United States has commended Taiwan’s recent approach and bilateral relations have improved accordingly, Lee adds. Bau concurs, saying that the relationship between Taiwan and the United States is now better than at any other time since the severance of official ties.

One sign of that improvement was Taiwan’s inclusion in the US Visa Waiver Program in November 2012, allowing ROC citizens to enter the United States without a visa for business or tourism purposes for up to 90 days.

Another sign of restored trust has been the US government’s approval of arms sales to Taiwan worth US$18.3 billion since 2008, and Bau believes that it is important for Taiwan to continue its drive to acquire such hardware. “The significance of procuring arms from the US has a political dimension, as doing so indicates Taiwan’s seriousness about the US as a major ally,” the academic says.

Taiwan-US relations continued making strides in 2013. In February, the two sides signed a new version of the Agreement on Privileges, Exemptions and Immunities that provides more legal protection for representatives posted in each other’s territory. In March, after a five-year hiatus, Taiwan and the United States resumed talks under the Trade and Investment Framework Agreement, or TIFA, which was signed in 1994. In July, US President Barack Obama signed legislation supporting Taiwan’s participation in the International Civil Aviation Organization (ICAO), while December saw the two sides sign an updated agreement for the United States to supply nuclear fuel to Taiwan.

Urgent Need

Going forward, Lee says there is an urgent need for Taiwan to engage in the trend toward global economic integration by participating in the Trans-Pacific Partnership (TPP), a free trade bloc being negotiated by the United States and 11 other countries. The Ma administration has made joining the TPP a priority by requiring government agencies to submit plans for gaining membership by July this year and establishing dedicated task forces in Taiwan and Washington. To demonstrate its determination to develop Taiwan into a free trade island, the government organized a four-day seminar in Taipei in mid-February attended by 17 ROC representatives and 16 economic counselors to countries taking part in negotiations for the TPP and the Regional Comprehensive Economic Partnership, another major free trade bloc that Taiwan seeks to join. Lee believes participation in TPP negotiations will lead to economic reforms at home, attract more investment from overseas, result in greater competitiveness in international markets and help Taiwan rejuvenate its trade relationship with the United States.

In the end, an enduring relationship is built on trust, which is why Bau calls on the ROC government to continue discussing major diplomatic initiatives with the US government—particularly those that might affect cross-strait relations—before taking action. “That’s how you win the trust of your ally,” he says. Today, 35 years after the birth of the TRA, trust between Taiwan and the United States has grown stronger, and Taiwan’s determination to participate in initiatives such as the TPP has the potential to take the relationship to new heights.

Rebalancing a Key Relationship

Taiwan Review recently interviewed Deputy Representative to the United States Leo C. J. Lee. The main focus of the interview was on what the future holds for Taiwan-US relations.

Taiwan Review: How should Taiwan reinforce support for the TRA and Taiwan-US relations in general in the US Congress?

Lee: Taiwan will keep building connections with members of the US House of Representatives and Senate and continue inviting them to Taiwan. In addition to shoring up established relationships with key figures in Congress, we’ll focus on interacting with new members in hopes of increasing their understanding of—and interest in—the TRA and Taiwan-related issues. On the 35th anniversary of the TRA, the ROC representative office in the United States is now actively planning various events for enhancing the understanding of the TRA among members of the US Congress.

Our goal is to develop Taiwan’s influence in Congress in a comprehensive, creative and professional manner. To do that, we analyze legislators’ personal qualities, areas of concern and the general background of their electoral districts to find and create common ground for developing long-term friendships and substantially interacting in areas including culture, economics, education and international politics.

There are three major issues for Taiwan-US relations today. First, the security issue: We’ll continue to build upon the Taiwan-US security partnership established by the TRA by asking members of Congress to urge the US executive branch to sell Taiwan diesel-engine submarines and more advanced fighters, including F-16 C/Ds, than retrofitted F-16 A/B models. Second, the political issue: During questionings at congressional hearings and in congressional statements, many members of the US Congress have expressed their concern about restrictions on Taiwan-US interactions, as well as their support for Taiwan’s participation in international organizations and US ministry-level officials’ visits to Taiwan. Taiwan will seek support from the US Congress to express in an appropriate manner Taiwan’s position to the US government’s executive branch in the hope that the United States would lift related restrictions as soon as possible. Third, the economic and investment issue: Following the resumption of TIFA talks [in 2013], Taiwan will further strengthen the Taiwan-US economic relationship by pushing for further rounds of such talks and the signing of a bilateral investment agreement [BIA] with the United States. We will also seek US support for Taiwan’s participation in the TPP.

TR: Today’s international situation is quite different from the state of affairs when the TRA was drafted, particularly in view of mainland China’s rise and the thaw in cross-strait relations. What do such changes mean for the TRA and the Taiwan-US alliance in terms of security, economic development and shared values?

Lee: The development of Taiwan-US relations continues to be based on the TRA, which has had a major influence on Taiwan’s security and economic development, but so much has happened since the Act was enacted. The United States and mainland China signed the 8/17 Communiqué, for example, but the United States also reiterated its promise to continue arms sales to Taiwan through the “Six Assurances.” People have seen democratization and its consolidation in Taiwan, as well as reforms based on the rule of law and improvements in human rights, and Taiwan has also pushed to open its markets and address various Taiwan-US economic issues. With joint effort, Taiwan and the United States have continued to enhance their relations in cultural, economic, military and political spheres while enjoying close and extensive people-to-people exchanges. Taiwan-US and cross-strait relations have reached new heights since President Ma Ying-jeou implemented viable diplomacy after taking office more than five years ago.

After President Ma took office, he prioritized the effort to restore high-level mutual trust, adopting a pragmatic “low-key, no surprise” policy in promoting Taiwan-US relations, which has been highly commended by the United States and has led to much improved, substantive bilateral relations. Taiwan was officially included in the US Visa Waiver Program on November 1, 2012. The US government has approved arms sales to Taiwan three times since 2008, with a value of more than US$18.3 billion. In March 2013 Taiwan and the United States resumed talks under the TIFA. In the same year the US Congress passed legislation supporting Taiwan’s bid to participate in the ICAO. Also in 2013 Taiwan and the United States signed a new version of the Agreement on Privileges, Exemptions and Immunities and the Agreement for Cooperation in the Peaceful Uses of Nuclear Energy. All of these achievements testify to the closeness of Taiwan-US relations.

The foundation of Taiwan-US relations extends far beyond Taiwan’s strategic position. More important factors that cement this alliance are our shared values such as democracy, rule of law and human rights. As former US Secretary of State Hillary Clinton observed, Taiwan is the United States’ “important security and economic partner.” In the future, Taiwan will use the foundation provided by the TRA to promote cooperation with the United States in five areas. First, we’ll encourage US Cabinet-level officials to visit Taiwan and improve and institutionalize the channels through which Taiwan and US high-ranking officials conduct dialogue and exchange visits. Second, we’ll continue strengthening the Taiwan-US economic relationship by pursuing further TIFA talks and a BIA with the United States, and we’ll also continue seeking US support for Taiwan’s participation in the TPP. Third, we will strengthen the Taiwan-US military and security partnership, requesting the United States to continue selling advanced armaments while cooperating with the United States in countering unconventional security threats like cyber attacks and terrorism. Fourth, Taiwan looks forward to working with the United States more extensively and deeply in addressing international and cross-border affairs as well as environmental protection and other global issues under the World Health Organization, ICAO and the United Nations Framework Convention on Climate Change. And fifth, Taiwan is willing to cooperate with the United States in handling territorial disputes in the East China Sea and South China Sea. Under the principles of President Ma’s East China Sea Peace Initiative, Taiwan will work with the United States and other partners in the region to ensure peace, prosperity and stability.

TR: The TRA has helped the United States and Taiwan develop a major economic partnership. How can the two sides build upon that foundation to facilitate Taiwan’s participation in the TPP?

Lee: A major focus of the TRA is the continuation of Taiwan’s economic development. When Taiwan was enjoying phenomenal economic growth in the 1980s, Taiwan and the United States began economic negotiations that ultimately allowed Taiwan to benefit from the openness of the US market. In the 1990s the United States played a major role in ensuring Taiwan’s continued economic development by actively assisting Taiwan’s preparations for accession to the World Trade Organization [WTO]. Since Taiwan became a WTO member in 2002, Taiwan and the United States have cooperated in many WTO negotiations. Taiwan is highly reliant on exports, which represent about 64 percent of our GDP. As the Doha Round of WTO talks has been stalled for a number of years, countries have focused more on regional economic integration and have become quite enthusiastic about signing free trade agreements [FTA] with each other. This phenomenon poses a great challenge for Taiwan. For example, before the South Korea-US FTA took effect in March 2012, Taiwan roughly equaled South Korea in terms of the growth rate for exports to the United States—in 2011, Taiwan’s exports to the US market grew by 15.3 percent while South Korea’s grew by 15.9 percent. But in the two years since the pact took effect, South Korea, which is Taiwan’s top export rival, has seen its exports to the US market grow by 4.9 percent, while Taiwan has seen negative growth [-4.3 percent] over the same period. It’s obvious that the trend toward regional economic integration is already having a major impact on Taiwan’s exports. Taiwan is in the process of economic transformation and participating in TPP negotiations will help Taiwan effect its economic structural reform, attract more foreign investment and raise Taiwan’s international competitiveness. Also, Taiwan’s participation in the TPP will enliven Taiwan-US economic links and bring newfound significance to the US policy of rebalancing toward Asia. This is a mutually beneficial relationship. We need to keep pushing for further TIFA talks between Taiwan and the United States. We’re taking a step-by-step, building-block approach, and one of the steps we’re focusing on is signing a BIA, which would strengthen the Taiwan-US economic partnership and boost Taiwan’s drive for participation in the TPP. At the same time, we’ll request that members of Congress act in the spirit of the TRA by supporting Taiwan’s membership in the TPP, which will help Taiwan contribute to regional and global economic development. Not only will Taiwan-US relations reach a new level, but the TRA will also be given new meaning.

TR: What role should Taiwan play in the current US policy of rebalancing toward Asia?

Lee: Under the rebalancing-toward-Asia policy, the United States seeks to strengthen ties with established allies and develop those with emerging partners, as well as support regional organizations and encourage regional economic integration. Other parts of the policy focus on enhancing regional security and maintaining a US military presence while facilitating democratic development, human rights, good governance and people-to-people exchanges. Taiwan and the United States have common interests ranging from disease control, environmental protection, humanitarian aid, human rights, investment and trade to cyber security, fighting terrorism and strategic security. The rebalancing policy means the US government is actively working to consolidate relations with partners in Asia, and Taiwan is glad to be one of the partners involved in that effort.

For Taiwan, membership in the TPP would provide a great opportunity for rebalancing its own export trade due to the size and diversity of the proposed TPP trade bloc, which involves 12 negotiating parties. Taiwan’s participation in the TPP would bear strategic meaning for both sides and also promote Taiwan’s economic development, and that goes right back to the stated goals of the TRA. Our emphasis will be on strengthening Taiwan-US economic links and participating in the TPP.

—Oscar Chung

Write to Oscar Chung at mhchung@mofa.gov.tw