The Lockheed Martin Aeronautics division, manufacturer of the F-16 fighter jets long sought by Taiwan, last week announced plans to cut 1,500 jobs at locations around the United States. This news highlights the need for the U.S. government to reassess its position on the sale and to consider the positive economic impact of releasing F-16s to Taiwan. The US-Taiwan Business Council joins Senator John Cornyn of Texas in calling on the Obama Administration to “end its blockade of Taiwan’s request to purchase new F-16s.”
Commenting on the Lockheed Martin announcement, Council President Rupert Hammond-Chambers said, “The recent Perryman Report shows that the follow-on sale of F-16s to Taiwan would have a positive economic impact around the country, generating some US$8.7 billion in gross output and sustaining approximately 16,000 direct and indirect jobs over the life of the program. That would represent a significant economic boost to states such as Ohio and Florida – where unemployment stands at 8.6% and 10.6%, respectively. Reports estimate that 1,800 workers in Ohio and 1,900 in Florida depend on an F-16 sale to Taiwan. Should the Taiwan sale fail to materialize, however, current orders would only sustain the F-16 production line for another two years.”
Preparations for and campaigning ahead of the upcoming Presidential and Legislative Yuan (LY) elections, which will both take place in January 2012, continued to dominate the Taiwan political environment through the second quarter of 2011. The elections will likely continue to affect the political and economic environment in Taiwan through the remainder of the year.
Defense and national security issues have so far not been central to the election calculus. As presidential election politics intensify, however, greater attention could be focused on President Ma Ying-jeou’s overall record on cross-Strait relations and national defense, and how these policy arenas relate to the economy, the government’s fiscal health, and wealth distribution under the Ma Administration. This is true to a lesser extent of the legislative elections as well. As the overall impact of President Ma’s first term in office gradually becomes discernible, the outcome of the 2012 elections could increasingly rest on a narrow band of middle voters, whose concerns may include a greater emphasis on defense.
For his part, Mr. Ma is clearly eager to achieve a breakthrough in defense sales before the election, in order to address criticisms that his government has been soft – or even negligent – on defense. However, his efforts at lobbying for U.S. action in the desired direction appear both late and inadequate.
This quarterly report provides a brief overview of significant developments in the past three month, and examines some of the factors that influenced the course of events in Taiwan during the second quarter of 2011.
The US-Taiwan Business Council welcomes the May 26, 2011 letter to President Obama, urging him to “move quickly to notify Congress of the sale of 66 F-16C/D aircraft that Taiwan needs in order to modernize its air force.” The letter came from Senators Robert Menendez and James Inhofe, joined by 43 of their U.S. Senate colleagues.
The letter notes that ”successive reports issued by U.S. and Taiwanese defense authorities clearly outline the direct threat faced by Taiwan as a result of China’s unprecedented military buildup,” and that “military experts in both Taiwan and the United States have raised concerns that Taiwan is losing the qualitative advantage in defensive arms that has long served as its primary military deterrent against China.” The letter goes on to say that “without new fighter aircraft and upgrades to its existing fleet of F-16s, Taiwan will be dangerously exposed to Chinese military threats, aggression and provocation, which pose significant national security implications for the United States.”
Commenting on the letter, Council President Rupert Hammond-Chambers said, “The Obama Administration has just hosted PLA Chief of Staff Chen Bingde, who made several unsubstantiated claims concerning Taiwan during his visit – including that some on Capitol Hill are considering reviewing the need for the Taiwan Relations Act (TRA). Senators Menendez and Inhofe and their 43 Senate colleagues are clearly and concisely responding to General Chen’s claims. The United States Congress remains firmly in support of the Taiwan Relations Act, and of its requirement to provide Taiwan with arms to provide for its own self-defense.”
The first quarter of 2011 witnessed the beginnings of the campaign season ahead of Taiwan’s 2012 presidential and legislative elections. Many of the political, cross-Strait, and other policy dynamics during the coming year can be expected to center around this theme. In particular, Taiwan’s 2012 presidential election and its potential impact on the cross-Strait dynamic will be the subject of considerable interest to analysts and policy makers in Taipei, in Beijing, and in Washington, D.C.
Over the past three years, the Ma Ying-jeou Administration’s record on fulfilling its declaratory commitment to Taiwan’s national defense has been lackluster. Whether and/or how this issue might play into the 2012 election also deserves close attention, as President Ma has long been sensitive to accusations – especially by U.S. officials or prominent observers – that he or his government is soft on defense.
This quarterly report provides a brief overview of significant developments in the past few months, examining some of the factors that influenced the course of events during the first quarter of 2011. It will provide an update on Taiwan’s political environment and cross-Strait relations, and offer a discussion on the defense budget and on Taiwan’s move to a volunteer force. In addition, the report will examine U.S.-Taiwan defense relations and the progress (or lack thereof) of select Taiwan arms procurement programs.
In a letter dated April 1, 2011, Ranking Member of the U.S. Senate Committee on Foreign Relations Senator Richard Lugar (R-IN) wrote to Secretary of State Hillary Clinton on the issue of U.S. defense equipment sales to Taiwan. The US-Taiwan Business Council shares Senator Lugar’s expressed concerns over Taiwan’s deteriorating airpower situation, and supports his contention that replacement of Taiwan’s tactical aircraft – such as with U.S.-made F-16C/Ds – is both necessary, justified, and not provocative.
In the letter, Senator Lugar wrote “Given the decrepit state of Taiwan’s F-5s, the service life issues associated with its IDF [Indigenous Defense Fighter], and a growing problem … obtaining affordable and sustainable access to spare parts for Mirages, I am very concerned that if the Administration does not act favorably on Taiwan’s outstanding Letter of Request (LOR) for sales of F-16C/D aircraft, Taiwan will be forced to retire all of its existing F-16A/B aircraft in the next decade, leaving it with no credible air-to-air capability.”
The Council also shares Senator Lugar’s concern over the tenuous nature of Taiwan’s present fighter fleet and its urgent requirement to retire obsolete F-5 and Mirage airframes, to upgrade F-16A/Bs and IDFs, and to procure new F-16C/Ds to replace retiring aircraft. Taiwan has a legitimate requirement to maintain a credible air deterrent in the face of a growing military threat from China – a threat that, to-date, has not been adequately discussed nor responded to by the Obama Administration.
America’s security relationship with Taiwan is both multi-tiered and comprehensive, and reaches far beyond arms sales to include myriad defense services and exchanges. Such military-to-military networking is vital to Taiwan’s ability to keep pace with modern defense training and with current tactical and strategic thinking. Nevertheless, such behind-the-scenes exchanges are merely one component of the security relationship. It is disingenuous to suggest, as some do, that because these exchanges are taking place, the U.S. security commitment is healthy. If other components – such as providing Taiwan with much needed new and modern equipment – are missing, the U.S. commitment remains incomplete.
2010 started off strong on Taiwan defense issues, with the January 29 Congressional notification of 5 separate arms sales programs. While the dollar value for these notifications was high – a combined US$6.4 billion – the programs themselves were not intrinsically controversial, as the bulk of the money went to Black Hawk utility helicopters and PAC-III missile defense batteries. These notifications represented the final significant parts of President George W. Bush’s April 2001 arms package – with the exception of diesel-electric submarines. In August of 2010, a second and much smaller package – less than US$250 million – of Direct Commercial Sales (DCS) programs were notified to Congress. Once again, these programs were not controversial, and pertained to upgrading the radars on Taiwan’s indigenous defense fighters.
Now, for the first time in 10 years, the Obama Administration has the opportunity to move forward and to ask new and important questions about Taiwan’s defensive needs and about the future of U.S. security support for Taiwan. To aid with this task, in May 2010 the US-Taiwan Business Council released a report entitled “The Balance of Air Power in the Taiwan Strait.” The Council’s report makes numerous significant recommendations to those concerned with Taiwan security policy – including to our own political and military leadership – on how to address the growing military imbalance in the Taiwan Strait.
Throughout 2010, numerous other analysts and observers also expressed their opinions on the direction that Taiwan should take on defense going forward. The overall consensus was that Taiwan isn’t spending enough on national security. The Council forecasts that Taiwan’s direct defense expenditures will reach only 2.16% of GDP in 2011, a figure that rises to 2.73% if you include non-direct defense expenditures. This percentage could even fall below 2% if Taiwan’s economic expansion continues to gather steam, falling far short of President Ma Ying-jeou’s campaign commitment to spend a minimum of 3% of GDP on Taiwan’s defense.
Moreover, the consensus was also that the United States needs to accelerate and de-politicize the political process for evaluating required capabilities for Taiwan, and for notifying to Congress the programs addressing those needs. In November 2010, Taiwan’s Ministry of National Defense (MND) released a statement noting that since 2007 they have had to return over US$1.4 billion to Taiwan’s treasury as a consequence of U.S. indecision on arms sales. America’s recent inability to offer timely notifications of programs is therefore having a material impact on Taiwan’s ability to fund its self defense.
The US-Taiwan Business Council comments on the U.S. defense commitment to Taiwan:
2010 could prove to be a defining year in the history of Taiwan’s relationship with China. The two sides signed the Economic Cooperation Framework Agreement (ECFA), a preferential trade agreement, in June, and have been working to continue to expand bilateral trade and cooperation since. Just like the two sides of the Taiwan Strait look to deepening and further broadening their ties, Washington and Beijing are also seriously pursuing mutually beneficial common grounds in their complex tangle of global strategic interests.
Marking the midway point of President Ma Ying-jeou’s four-year term, events in 2010 also prepared the political landscape for the fierce battles ahead in the lead-up to the next presidential election in March 2012. The economy, jobs, partisan unity, cross-Strait dynamics, and U.S.-Taiwan relations will all figure prominently in the 2012 campaigns.
However, issues concerning Taiwan’s defense and national security have not received as much attention as they probably should have so far under the Ma Administration. With much of his defense agenda facing serious challenges, and civil-military relations still rather frosty, President Ma’s record on defense could prove to be a major potential vulnerability as he heads into the 2012 presidential race.
This report provides a brief overview of significant developments in the past year, and examines some of the factors that influenced the course of events during 2010. It will also provide a brief update on the defense budget, on U.S.-Taiwan defense relations, and on the progress of select Taiwan arms procurement programs.
The US-Taiwan Defense Industry Conference 2010 was held October 3-5, 2010 in Cambridge, Maryland. This was the ninth annual event in a series of ongoing conferences addressing the future of U.S. defense cooperation with Taiwan, the defense procurement process, and Taiwan’s defense and national security needs.
The first conference in this series was the St. Petersburg, Florida event where former Minister of National Defense Tang Yiau-ming gave the keynote address in March of 2002. The second conference in the series was held in February 2003 in San Antonio, Texas, the third in October 2004 in Phoenix, Arizona, the fourth in September 2005 in San Diego, California, the fifth in September 2006 in Denver, Colorado, and the sixth in September 2007 in Annapolis, Maryland. Taiwan’s Minister of National Defense Chen Chao-min gave the keynote address at the seventh conference in the series, held in September 2008 on Amelia Island, Florida. The eighth conference was held in September 2009 in Charlottesville, Virginia.
Keynote Addresses
Keynote speakers at the 2010 conference included Nien-dzu (Andrew) Yang, Deputy Minister (Policy) from Taiwan’s Ministry of National Defense, Wallace “Chip” Gregson, Assistant Secretary for Asian & Pacific Security Affairs at the U.S. Department of Defense, and Beth M. McCormick, Deputy Assistant Secretary, Defense Trade & Regional Security, Bureau of Political-Military Affairs at the U.S. Department of State. US-Taiwan Business Council Chairman Dr. Paul Wolfowitz was the conference host.
Conference Program
Sessions at the US-Taiwan Defense Industry Conference featured a moderator and several speakers on the panel, and some sessions included additional commentators. Each speaker gave a short presentation on the session topic from his or her own viewpoint and expertise. Those presentations were then followed by a moderator-led discussion among the panelists, as well as a moderator-driven question and answer period with the attendees. This format offers the maximum amount of time for exchanges among the panelists, as well as between the panel and the audience, allowing the sessions to become a forum for substantial and valuable interaction and discussion.
Breakout Sessions
There were three sub-sessions within Session IV. These sub-sessions included discussions focusing on each individual branch: Navy (Combat Capabilities & Trends), Army, and the Air Force (The Balance of Air Power).
Having achieved a major milestone in cross-Strait relations over the summer with the signing of the Economic Cooperation Framework Agreement (ECFA), Taipei has begun to think more seriously about trying to better position itself for the next phase in its dealings with Beijing.
While notable progress continues to be made, China has consistently proven a shrewd and elusive adversary of ambitious (and unwavering) political objectives. Not surprisingly, there are significant uncertainties ahead, not least of which is the political fortune of President Ma Ying-jeou’s ruling Kuomintang (KMT) party in the upcoming municipality mayoral elections and next year’s parliamentary election, as well as for Mr. Ma’s own re-election in 2012. There are also major challenges on the defense and national security front in the foreseeable future, principally due to, and in the form of, budgetary constraints.
This report will review the major political events that transpired during the third quarter of 2010. It will also discuss the significant defense and national security developments over this period, and will provide a brief update on the progress for select Taiwan arms procurement programs.
The US-Taiwan Business Council today announced that it will host the 9th annual US-Taiwan Defense Industry Conference from October 3-5, 2010 in Cambridge, Maryland.
Keynote speakers at the conference will include Wallace “Chip” Gregson, Assistant Secretary for Asian & Pacific Security Affairs at the U.S. Department of Defense; Andrew J. Shapiro, Assistant Secretary, Bureau of Political-Military Affairs, U.S. Department of State; and a senior representative from Taiwan’s Ministry of National Defense. Council Chairman Dr. Paul Wolfowitz will be the conference host.
This annual conference focuses on US-Taiwan defense and military cooperation and Taiwan’s future defense and national security needs. This year, conference sessions will examine the future cross-Strait threat, the Taiwan military’s new focus on disaster rescue, recovery & relief, and asymmetric options for the Taiwan armed forces. Special breakout sessions will cover each of the services: Army, Navy, and the Air Force.
Rupert Hammond-Chambers, President of the Council, said “We are honored to have General Gregson and Mr. Shapiro as keynote speakers. Their views and insights on the U.S.-Taiwan defense and security relationship, and on current and future challenges for Taiwan, will be both valuable and timely.”
