President Barack Obama
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20515
Dear President Obama,
America’s long-standing commitment to Taiwan is a multifaceted and bipartisan effort that includes many components, all of which must be exercised as we seek to support and safeguard the ability of the people on Taiwan to determine their own future. One critical component is U.S. security assistance and arms sales to Taiwan to help modernize and build the capacity of its armed forces. We believe this support must be more robust.
While recent relations between Taiwan and China have been more encouraging, we remain concerned that China’s ongoing military modernization, and the threat it poses to peace and security in the Taiwan Strait, is not being adequately addressed. We recognize that a great deal of bilateral security cooperation is taking place between the United States and Taiwan, including more than $12 billion worth of U.S. arms sales to Taiwan since the start of your administration. These actions have been welcome. However, we are troubled that it has now been over four years – the longest period since the passage of the Taiwan Relations Act in 1979 – since the administration has notified Congress of a new arms sale package.
The United States must continue to further our interests in cross-Strait stability – a vital component of which is arms sales to Taiwan, pursuant to the Taiwan Relations Act – even when doing so brings short-term tensions in our relationship with China. The United States should develop and implement an ongoing plan for Taiwan’s military modernization, including how the administration plans to address Taiwan’s legitimate requirement for additional new manned fighters and submarines and other self-defense articles and services. Given some of the obstacles with the current approach, we believe that a regular and routine process for the provision of security assistance to Taiwan is essential.
Finally, we believe that it is equally important that Taiwan strive to meet President Ma Ying-jeou’s 2008 commitment to invest at least 3 percent of its annual gross domestic product on defense. We are increasingly concerned that, absent a change in defense spending, Taiwan’s military will continue to be under-resourced and unable to make the investments necessary to maintain a credible deterrent across the strait, especially as its limited defense resources are increasingly constrained by growing military personnel costs.
Consistent with the requirements of the Taiwan Relations Act, which call for regular consultations between the Executive Branch and Congress, we look forward to the opportunity to discuss together how best we can support and strengthen Taiwan’s self-defense capabilities, including any arms sales under consideration or planned.
The US-Taiwan Defense Industry Conference 2015 will be held October 4-6, 2015 in Williamsburg, Virginia. This will be the fourteenth 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.
This year, conference sessions will consider Taiwan’s Legislative and Presidential elections in January of 2016 and their potential impact on the island’s defense posture. We will examine potential evolutionary changes and new approaches for Taiwan, how new intellectual concepts could inform future military strategy, and how such changes in strategy might play out in procurement, arms sales, indigenous development, and budgeting. Panelists will also discuss Taiwan’s air & missile defense objectives, focusing on potential strategic changes and reviewing potential future options. Finally, we will provide an update on last year’s session on Taiwan’s indigenous submarine programs, provide insight into the progress that has been made a year later, and discuss how best to ensure continued forward momentum.
The first conference in this series was the St. Petersburg, Florida event where former Taiwan 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, the ninth in October 2010 in Cambridge, Maryland, and the tenth in September 2011 in Richmond, Virginia. The eleventh conference was held in September 2012 in Hershey, Pennsylvania, the twelfth in September 2013 in Annapolis, Maryland, and the thirteenth in October 2014 in Williamsburg, Virginia.
Keynote Addresses & Conference Program
Keynote speakers will include senior representatives from Taiwan’s Ministry of National Defense and from the U.S. government. US-Taiwan Business Council Chairman Dr. Paul Wolfowitz will be the conference host.
Sessions at the US-Taiwan Defense Industry Conference feature a moderator and several speakers on the panel, and some sessions may include additional commentators. Each speaker gives a short presentation on the session topic from his or her own viewpoint and expertise. Those presentations are 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.
There was speculation among US-based China experts this week that the White House was growing increasingly frustrated with China and could change policies and move closer to Taiwan, even agreeing to sell it new weapon systems. However, sources close to the administration of US President Barack Obama told the Taipei Times that it was not considering a change in policy.
The US-Taiwan Defense Industry Conference 2014 will be held October 5-7, 2014 in Williamsburg, Virginia. This will be the thirteenth 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. This year, conference sessions will consider Taiwan’s potential role in the U.S. strategic rebalance towards Asia, examine Taiwan’s defense and military plans for the next 5-10 years, and discuss the current status and potential new approaches to the arms sales process. We will also examine ways to expand on current models for security cooperation, as well as assess Taiwan’s indigenous submarine programs.
The first conference in this series was the St. Petersburg, Florida event where former Taiwan 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, the ninth in October 2010 in Cambridge, Maryland, and the tenth in September 2011 in Richmond, Virginia. The eleventh conference was held in September 2012 in Hershey, Pennsylvania, and the twelfth in September 2013 in Annapolis, Maryland.
Keynote Addresses & Conference Program
Keynote speakers will include senior representatives from Taiwan’s Ministry of National Defense and from the U.S. government. US-Taiwan Business Council Chairman Dr. Paul Wolfowitz will be the conference host.
Sessions at the US-Taiwan Defense Industry Conference feature a moderator and several speakers on the panel, and some sessions may include additional commentators. Each speaker gives a short presentation on the session topic from his or her own viewpoint and expertise. Those presentations are 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.
Recent reports have indicated that the alleged defunding by the U.S. Air Force of the combat avionics programmed extension suite (CAPES) will negatively impact Taiwan’s F-16 A/B upgrade program. The US-Taiwan Business Council believes these reports to be inaccurate. Should this defunding occur, it will have no impact on the schedule or cost for Taiwan’s extensive upgrade program, including on the development of the Active Electronically Scanned Array (AESA) radar.
The Council understands that the U.S. Air Force remains fully committed to the Taiwan F-16 upgrade program, and that their assurances are reflected in the signed Letter of Offer and Acceptance (LOA). That commitment ensures that the cost and schedule put in place by the LOA remains, and that the Taiwan military will not see any changes to their program even if the CAPES program is altered. This extends through the upgrade and into the sustainment of the upgraded equipment.
Council President Rupert Hammond-Chambers said, “I am pleased that the U.S. Air Force remains committed to the Taiwan upgrade program and to the assurances that were made in the LOA. This retrofit program is the first of two steps to upgrade Taiwan’s fighter fleet, with the second step – purchase of replacement F-16 C/Ds – still to be approved.”
Hammond-Chambers added, “The ongoing impact of tighter U.S. defense spending, and the decisions impacting fighter upgrades for legacy U.S. equipment, merely highlights the need for the U.S. to continue to build capacity among its Asia Pacific security allies, including Taiwan. Taiwan has a legitimate need for additional fighters to meet its sovereign security requirements, and F-16 C/Ds would best fit that need.”
Lessons and experiences from previous Taiwan Strait crises have shown that it is imperative for Taiwan to maintain a measure of qualitative superiority over China – not only to attempt to prevail in conflict, but also to reinforce deterrence, to allow Taiwan to negotiate from a position of strength, and to prevent war. However, a careful and objective analysis of the current balance of air power in the Taiwan Strait reveals that Taiwan’s current air defense forces are only marginally capable of meeting the island’s air defense needs, and that it faces real and significant future challenges in maintaining its current capabilities.
The U.S. decision in 2011 to assist Taiwan with the mid-life upgrade (MLU) of its existing fleet of F-16A/B fighters will significantly improve Taiwan’s air defense capabilities. Nevertheless, the upgrade program still does not adequately address all of Taiwan’s legitimate air defense requirements. Without additional procurement programs, a tangible and substantial front-line fighter gap will develop in Taiwan within the next five to ten years, as a significant portion of the Taiwan Air Force (TAF) aircraft inventory reaches the end of its useful service life.
Figure 1: Estimated Fighter Numbers Through 2023
Taiwan’s fleet of Mirage 2000s and the F-CK-1A/B Indigenous Defense Fighter (IDF) both contend with serious availability issues, and may be facing retirement after 2018. The shortfall in front-line fighters will be further exacerbated by the rapidly approaching obsolescence of Taiwan’s fleet of F-5 Lead-In Fighter Training (LIFT) aircraft. Together, this will reduce the Taiwan air defense force structure to rely primarily on a small fleet of 145 F-16A/Bs whose operational rate takes the number of available planes to approximately 107. During the scheduled upgrade program for these fighters, however, as many as a squadron (24) at a time of F-16A/Bs will be unavailable for service, further reducing Taiwan’s air defense forces.
By 2023, at the expected end of the upgrade program, Taiwan’s operationally-available fighter strength will have declined to a point where the TAF will no longer possess the minimum requisite number of combat aircraft necessary to defend its air space from Chinese aggression or military coercion. Moreover, the quantitative shortfall is certain to also erode the quality of Taiwan’s air force, manifesting in decreased aircraft performance, reduced pilot training opportunities, and lack of pilot experience.
This significant air power shortfall will emerge in Taiwan while China continues to aggressively modernize and expand its missile strike capabilities, and while the People’s Liberation Army (PLA) is simultaneously and rapidly introducing modern combat aircraft into service in large numbers.
The United States has both a clear legal and moral obligation to respond to the ongoing Chinese intimidation tactics and attempts at coercion of Taiwan. Under the Taiwan Relations Act (TRA), Washington must ready itself and Taiwan to resist that coercion. The germane parts of the TRA make it the policy of the United States:
to consider any effort to determine the future of Taiwan by other than peaceful means, including by boycotts or embargoes, a threat to the peace and security of the Western Pacific area and of grave concern to the United States;
to provide Taiwan with arms of a defensive character; and
to maintain the capacity of the United States 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.[1]
Arguably the mere existence of China’s current large arsenal of ballistic missiles, land attack cruise missiles (LACMs), and fighter aircraft opposite Taiwan is “a threat to the peace and security of the Western Pacific,” as it is undermining the long-standing, stability-enhancing military balance in the region. Clearly targeted at Taiwan, China’s standing arsenal is certainly a means of coercion even if the missiles and aircraft are never used.
The United States and Taiwan need to craft and implement counter-coercive strategies that undercut the utility of Chinese aerospace power, while demonstrating Taiwan’s ability to defend its airspace in peacetime and wartime.
The US-Taiwan Business Council congratulates the governments of the United States and Taiwan on their recent signing of a US$3.8 billion Letter of Offer & Acceptance (LOA) to upgrade Taiwan’s 145 F-16 A/B fighters. This deal will provide Taiwan’s existing fleet of F-16 A/Bs with important enhancements by means of a contract spanning nearly a decade of work (2012-2021). The agreement provides for Taiwan adding advanced Active Electronically Scanned Array (AESA) radar to its fighters, as well as for making structural upgrades, improving avionics, and expanding electronic warfare suites.
The future boost in Taiwan’s airpower capabilities represented by this LOA was a long time in coming. It would not have happened without the leadership of Senator John Cornyn. As a result of the Senator’s perseverance, the Obama Administration notified to Congress a US$5.3 billion F-16 A/B upgrade program in September 2011. In the absence of Senator Cornyn’s personal attention to this important Asia Pacific security matter, it is likely that the upgrade program LOA would not have been consummated last Friday, July 13, 2012.
Despite this positive development, however, Taiwan’s very real and urgent requirement for additional fighters remains unaddressed.
Taiwan & the U.S. Re-Balance Towards Asia
The Obama Administration is currently paying increased attention to the Asia Pacific region, and has undertaken a significant effort to highlight its “Pivot to Asia” and its re-balancing of priorities. This is welcome news.
In the context of this re-balancing effort, moving ahead with the F-16 A/B upgrade program is an important initial step in Taiwan’s effort to play its role in the region. However, Taiwan’s requirement to also purchase new fighters is just as serious and urgent as the U.S.-supported modernization programs for Australia, Singapore, South Korea, and Japan.
It is important to clearly understand the grave issues faced by Taiwan’s air forces after 2016. In the latter part of that year, the Taiwan Air Force will start to withdraw up to a squadron (24) at a time of F-16 A/Bs to undergo upgrades and modernization. With 16 fighters permanently allocated for training at Luke Air Force Base, and with an operational rate of 70%, Taiwan will then have as few as 73 F-16 A/Bs operational at any one time – half of its existing fleet. In addition, these remaining fighters will not yet have been modernized, and will be required to fly more missions to attempt to maintain control over Taiwan’s myriad defense and security scenarios. This is simply not enough to handle all of Taiwan’s many needs, whether at war or while at peace.
What is the Plan to Fill Taiwan’s 2016-2021 Fighter Gap?
In an April 27, 2012 letter to Senator Cornyn, the White House stated that it is “mindful of and share your concerns about Taiwan’s growing shortfall in fighter aircraft.” The letter also noted that the Obama Administration is deciding “on a near term course of action on how to address Taiwan’s fighter gap, including through the sale to Taiwan of an undetermined number of new US-made fighter aircraft.”
This important language should be at the center of the next stage of Taiwan’s air force modernization. Neither the U.S. nor Taiwan has the luxury to take several years to determine what to do next. The two governments need to settle on a plan in the coming months, a plan that can be implemented so that while Taiwan’s F-16 A/Bs are being withdrawn from the front line in 2016 and beyond, new fighters are available to fill the gap. This plan could be as simple as a phased approval approach. Phase I could be for a small number of new F-16s (24) to compensate for those existing aircraft out of service during the upgrade program. These new aircraft could be delivered in parallel with the upgrade/modification schedule.
There are some who argue that the F-35B – the short take-off and vertical landing (STOVL) variant of the new U.S. fighter – should be the focus of Taiwan efforts to modernize its fighter fleet. In 2011, press reports indicated that a U.S. Department of Defense report to Congress highlighted a STOVL aircraft as the best solution for Taiwan.
Certainly a STOVL variant would meet many of Taiwan’s needs, and if it was available that could be an attractive option. However, the F-35B will certainly not be made available to Taiwan in the next decade. It therefore fails to meet Taiwan’s fighter gap needs between 2016 and 2021. In addition, the F-35B is significantly more expensive than the F-16 C/D – it represents a new airframe and therefore a new supply chain to keep it operational through training, upgrading, and maintenance. The F-35B would therefore create even greater budgetary pressures for Taiwan’s already under-funded defense establishment.
The US-Taiwan Business Council welcomes the signing of the F-16 A/B upgrade and modernization contract this past Friday. Nevertheless, this action does not offer a complete solution. Indeed, removing F-16 A/Bs from the front line to be upgraded actually makes Taiwan’s 2016-2021 fighter gap that much wider. Taiwan will not have enough fighters to patrol its skies.
The Council urges the U.S. & Taiwan governments to put a plan in place as soon as possible to address this destabilizing shortfall.
Report Cover: Chinese Reactions to Taiwan Arms Sales
Taiwan’s national security is fundamentally in the national interest of the United States, and the U.S. seeks to create an atmosphere conducive to a peaceful and non-coercive resolution of political differences on the two sides of the Taiwan Strait.
U.S. arms sales are intended to provide Taiwan’s government and leadership with the confidence needed to engage with their counterparts in Beijing from a position of strength. Guided by the Taiwan Relations Act, and consistent with understandings outlined in Joint Communiqués with China, America providing to Taiwan the arms necessary to ensure its own self-defense has enabled democracy to flourish on the island. Substantial support for Taiwan has also served as a visible reminder of U.S. commitments to peace and security in the Asia Pacific.
The process by which U.S. policymakers have addressed Taiwan’s defense requirements has evolved over time. When the Mutual Defense Treaty guided the relationship, between 1955 and 1979, Taiwan was treated as an ally. After the shift in diplomatic relations in 1979, Taiwan was treated as a special case. Concerned over possible Chinese intervention, Taiwan defense officials traveled to Washington to present senior U.S. policy officials with Taiwan’s bundled list of requirements in annual face-to-face meetings. Formal Congressional notifications of approved items were forwarded both relatively frequently and as needed throughout the course of a given year.
In 2001, the annual Taiwan arms sales talks process was discontinued, with the intention of allowing Taiwan’s defense requirements to be addressed at any time during the year, similar to the process for a normal security assistance partner. Since 2008, however, Congressional notifications of approved items have consistently been bundled into large multi-billion dollar packages, rather than being processed when ready. A return to the annual arms sales talks process may warrant consideration.
Figure 2: Value of Arms Sales Notifications, 1990-2011
China has a well-established track record of responding negatively and stridently to public announcements of U.S. arms sales to Taiwan. Congressional notifications will likely remain the primary trigger for Chinese responses, rather than earlier decision-points in the process such as providing Price and Availability (P&A) data in response to a Letter of Request (LOR) from Taiwan.
Future Chinese actions taken in response to Taiwan arms sales may include sanctions against the U.S. companies that are supporting Foreign Military Sales (FMS) programs or undertaking Direct Commercial Sales (DCS) programs with Taiwan. However, the effectiveness of such sanctions is open to question, as major U.S. defense industrial firms conduct only minor business in China. Beijing is also unlikely to sanction smaller sub-system suppliers due to their peripheral involvement as sub-contractors and their marginal value as symbolic targets. In addition, if a U.S. company were to face discrimination as a result of Chinese sanctions due to Taiwan arms sales, a case could be introduced to the World Trade Organization (WTO) for adjudication.
Beijing authorities could suspend People’s Liberation Army (PLA) military exchanges with the U.S. Department of Defense in response to Taiwan arms sales – an often-used tactic. While such exchanges have value, critical issues in the bilateral security relationship would be addressed through other channels if necessary. In addition, the PLA most likely would resume exchanges again, following an appropriate interval, as they have in the past.
In retaliation for Taiwan arms sales, PRC leaders could also consider releasing sensitive nuclear or missile-related technologies to Iran or other countries of concern, or they could withhold support for non-proliferation-related actions within the United Nations or other international organizations. However, reprisals from the U.S. or from other concerned countries could be expected in return, and Beijing likely would also be subject to criticism from other players in Europe and elsewhere who have significant interests in preventing Iran from gaining weapons of mass destruction.
Political or military leaders in Beijing may attempt to retaliate by liquidating U.S. Treasury holdings. As satisfying an emotional outburst as this course of action might be on an individual basis, the PLA has limited authority over national Chinese economic and financial policy. A sudden sell-off of U.S. Treasury holdings would be a significant horizontal and vertical escalation of the relatively minor, albeit emotionally charged, issue of Taiwan arms sales. In addition, the effects of such an action are unclear and could actually have a greater negative effect on China’s economic interests than on the interests of the U.S.
Past behavior indicates that China is unlikely to challenge any fundamental U.S. interests in response to any future releases of significant military articles or services to Taiwan. The U.S. therefore retains considerable freedom of action in abiding by the Taiwan Relations Act. Barring a substantive reduction in the Chinese military posture opposite Taiwan, the U.S. will likely continue to provide Taiwan with weapons of a defensive character for the foreseeable future.
Nevertheless, key unresolved issues include Taiwan’s unheeded request for additional F-16 fighters, and the fact that the Bush administration’s 2001 commitment to assist Taiwan in its acquisition of diesel-electric submarines remains unfulfilled. Taiwan’s request for additional F-16s is both reasonable and urgent, and should be honored. In addition, if Congressional notification for a submarine design program is not forthcoming, Taiwan’s LOR should be withdrawn and export licenses through direct commercial sales channels should be given positive treatment.
The Barack Obama administration has demonstrated unnecessary restraint in its Taiwan arms sales decisions to date, despite having ample justification for positive considerations. Excessive caution on new arms sales to Taiwan risks legitimizing PRC use of military coercion to resolve political differences with its neighbors and sends a signal to others in the region of a diminished U.S. commitment in Asia.
This major report examining Chinese reactions and retaliatory responses to Taiwan arms sales by the U.S. is available on the US-Taiwan Business Council website:
On April 17, 2012, the US-Taiwan Business Council and the Project 2049 Institute will release a joint report entitled “Chinese Reactions to Taiwan Arms Sales.” This report takes an in-depth look into the history of major U.S. arms sales to Taiwan, and examines the correlation between such arms sales and the reactions and subsequent retaliatory responses – if any – by the People’s Republic of China.
The report questions the extent to which China is prepared to jeopardize its overall relationship with America, and concludes that while the PRC has loudly protested past arms sales, tangible retaliatory responses have not had substantial long-term effects. China is unlikely to challenge any fundamental U.S. interests in response to future releases of significant military articles or services to Taiwan, and the U.S. therefore retains considerable freedom of action in abiding by the Taiwan Relations Act. Barring a substantive reduction in the Chinese military posture opposite Taiwan, the U.S. will likely continue to provide Taiwan with weapons of a defensive character for the foreseeable future.
The report also asserts that U.S. arms sales provide Taiwan’s government with the confidence needed to engage with their counterparts in Beijing from a position of strength, suggests that these sales are in the U.S. national interest, and that they serve as a visible reminder of U.S. commitments to peace and security in the Asia Pacific.
