Categories
Press Releases

US-Taiwan Business Council Believes that the Obama Administration Remains Committed to Taiwan’s F-16 Upgrade Program

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.

 

US-Taiwan Business Council Believes that the Obama Administration Remains Committed to Taiwan’s F-16 Upgrade Program (PDF file)

Categories
Analysis & Commentary U.S. Government

U.S.-China Economic and Security Review Commission – 2013 Annual Report to Congress

The U.S.-China Economic and Security Review Commission (USCC) was “created by the United States Congress in October 2000 with the legislative mandate to monitor, investigate, and submit to Congress an annual report on the national security implications of the bilateral trade and economic relationship between the United States and the People’s Republic of China, and to provide recommendations, where appropriate, to Congress for legislative and administrative action.

On November 20, 2013, the USCC released its 2013 annual report to congress. Chapter 3, Section 2 of the report contains analysis on Taiwan, including discussions on cross-Strait relations, Taiwan’s role in the East and South China Sea disputes, and the status of U.S.-Taiwan relations. The report also contains extensive discussion on cross-Strait military and security issues.

Complete Report (PDF, 15MB)
Chapter 3, Section 2: Taiwan (PDF, 1.1MB)

Categories
Analysis & Commentary

Special Commentary: Signing of an LOA to Upgrade Taiwan’s F-16 A/B Fighters

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.

Special Commentary: Signing of an LOA to Upgrade Taiwan’s F-16 A/B Fighters

Categories
Taiwan Defense & Security Reports

Taiwan Defense & Security Report – Q1, 2012

Report Cover: Taiwan Defense & National Security Report – Q1, 2012
Report Cover: Taiwan Defense & National Security Report – Q1, 2012

The year 2012 began with presidential and parliamentary elections in Taiwan, and the results will help shape the trilateral relationship between Taipei, Beijing and Washington over the next four years.

Despite his stronger-than-expected showing at the polls as he was re-elected, President Ma Ying-jeou has already begun struggling with rapidly falling popularity. Ma has also seen widespread public resentment over some difficult policy decisions – decisions that he had declined to make before the presidential election, but that he felt compelled to push forward during the period between the election and his formal inauguration in May. It remains to be seen whether this signals the shape of things to come during Mr. Ma’s second term, and how his weak political standing could impact his cross-Strait and national security policies going forward.

This quarterly analysis report will provide a brief overview of significant defense and national security developments in the past few months, and will examine some of the factors that influenced the course of events during the first three months of 2012. It will examine the political environment in Taiwan, assess cross-Strait relations, look at Taiwan defense policy and defense budget issues, and appraise the status of the U.S.-Taiwan defense relationship. The report ends with an update on the current state of affairs for select Taiwan procurement programs.

Categories
Taiwan Defense & Security Reports

Taiwan Defense & Security Report – Annual Review, 2011

Election politics and considerations dominated the year 2011 for Taiwan in almost every conceivable way. The January 14, 2012 Presidential/Legislative Yuan (parliamentary) elections were watched not without some anxiety by interested entities well beyond Taipei. Indeed, some of the actions taken by Washington and Beijing during the past year, and in the lead-up to the elections, may even suggest the emergence of a preliminary consensus – if not yet a new paradigm – for managing the complex and often sensitive U.S.-Taiwan-China strategic relationship.

As these critical elections were successfully concluded within two weeks of the end of 2011, this report will try to analyze their results in the context of the traditional defense and security focus of this annual review. The report will also provide an overview of the significant political, cross-Strait, and defense developments during 2011, which should perhaps offer some helpful indications as we look for factors that could influence key defense and national security policy developments during the next four years.

Categories
Taiwan Defense & Security Reports

Taiwan Defense & Security Report – Q3, 2011

The third quarter of 2011 ended with the long-awaited – as well as repeatedly and seriously delayed – U.S. Government decision on the sale of F-16 fighters to Taiwan. More precisely, the U.S. government notified to Congress its intention to provide to Taiwan a major package of mid-life modernization for its existing F-16A/B fighters – argued by the Obama Administration as being a better option than the sale of replacement F-16C/D fighters.

The U.S. side insists that they have not ruled out selling a new tranche of F-16s to replace aging equipment, and Taiwan President Ma Ying-jeou has renewed calls for the new buy. Nevertheless, the controversial Obama Administration decision spoke volumes of the complex three-way dynamic between Washington, Taipei, and Beijing, and may herald a new reality that could soon confront Taiwan’s national security establishment.

In the meantime, everything related to Taiwan – including defense issues and cross-Strait relations – continues to take a backseat to, and merely serve as backdrop for, the campaigns ahead of the next joint presidential/legislative elections scheduled for January 14, 2012. In the presidential race, incumbent Ma Ying-jeou of the Kuomintang (KMT) faces opposition Democratic Progressive Party (DPP) Chairwoman Tsai Ing-wen in what will be a hotly contested and close race. The addition of Peoples First Party (PFP) Chairman James Soong to the contest adds a complicating factor for both candidates – but particularly for President Ma.

This quarterly analysis report provides a brief overview of significant developments in Taiwan during the past three months, and examines some of the factors that influenced the course of events during the third quarter of 2011. In addition to examining the current political environment in Taiwan, the report will look at defense policy, budget, and procurement issues. It will also provide an update on U.S.-Taiwan defense relations, and a look at the current status of select programs.

Categories
Taiwan Defense & Security Reports

Taiwan Defense & Security Report – Q2, 2011

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.

Categories
Taiwan Defense & Security Reports

Taiwan Defense & Security Report – Q1, 2011

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.

Categories
Taiwan Defense & Security Reports

Taiwan Defense & Security Report – Annual Review, 2010

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.

Categories
Taiwan Defense & Security Reports

Taiwan Defense & Security Report – Q3, 2010

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.