Susan L. Shirk, Deputy Assistant Secretary for East Asian and Pacific Affairs, U.S. Department of State, Testimony Before the House International Relations Committee, "The Taiwan Relations Act at Twenty," Subcommittee on Asia and the Pacific, Washington, DC, April 14, 1999


"The Taiwan Relations Act at Twenty"

Introduction

Mr. Chairman, good afternoon.

Thank you for the invitation to speak today as we mark the
twentieth anniversary of the Taiwan Relations Act. I welcome this
opportunity to discuss this innovative legislation and our
relationship with Taiwan.

Today, I would like first to review how the Taiwan Relations Act
(TRA) has preserved our substantive ties with Taiwan and
contributed to a stable regional environment in which Taiwan has
prospered and cross-Strait ties have grown. Then I would like to
give you some thoughts about the future challenges and how the
TRA will help us address them.

The TRA -- A Resounding Success

Twenty years ago, our government faced the challenge of
preserving the long-standing friendship and common interests
between the U.S. and Taiwan in the absence of diplomatic
relations. Bipartisan efforts as well as cooperation across
agencies and branches of government produced the Taiwan Relations
Act to ensure that normalization of our relations with the
People's Republic of China did not result in the abandonment of
Taiwan. Those of you in the audience who participated in crafting
the TRA know that this was not an easy task.

The TRA that emerged from this process set forth two fundamental
goals:


"...(1) to help maintain peace, security, and stability in the
Western Pacific; and

(2) to promote the foreign policy of the United States by
authorizing the continuation of commercial, cultural, and other
relations between the people of the United States and the people
on Taiwan."


I am sure you would agree that the TRA has met these goals, and
indeed has succeeded far beyond the hopes and

expectations of its framers. This resounding success is a tribute
to the careful, comprehensive design of the legislation, the
strong commitment on each side to make sure that the new
arrangements worked, and the strength of the affinity between the
two peoples.

Taiwan's Progress

One measure of the TRA's success is the remarkable democratic
transformation and economic prosperity achieved by Taiwan. Twenty
years ago, Taiwan was under martial law, and human rights
violations occurred with regularity. Today, Taiwan has a vibrant
democracy characterized by free elections, a free press, and
dynamic political campaigns. Taiwan's economic development on
free market principles has been no less impressive, as seen in
its ranking as the 14th largest trading economy in the world and
in its success in weathering the Asian Financial Crisis. Taiwan's
experience is a powerful example in the region and beyond.

Of course, Taiwan's people deserve the full credit for their
achievements. But the TRA helped both to ensure that the
unofficial status of our relations did not harm Taiwan's
interests and to create a stable environment favorable to
Taiwan's transformation.

Consistency of U.S. Commitment

One way the U.S. government has fostered this stable environment
is by upholding the security provisions of the TRA. In close
consultation with Congress, successive administrations have
implemented our obligation under the TRA to provide articles and
services necessary to Taiwan to maintain a sufficient self-
defense capability. We have provided Taiwan with F-16s, Knox
class frigates, helicopters, and tanks as well as a variety of
air-to-air, surface-to-air, and anti-ship defensive missiles. We
continually reevaluate Taiwan's posture to ensure we provide
Taiwan with sufficient self-defense capability while complying
with the terms of the 1982 U.S.-P.R.C. Communique.

The Department of Defense's recent assessment of the security
situation in the Taiwan Strait concludes that, except in a few
areas, despite improvements in the military forces of both sides,
the dynamic equilibrium of those forces in the Taiwan Strait has
not changed dramatically over the last two decades. This
assessment reflects the effectiveness of the TRA.

As you know, the U.S. also maintains a significant forward-
deployed presence in East Asia in connection with our alliances
with Japan, the Republic of Korea, and other allies. This
presence contributes importantly to regional stability, including
the area around Taiwan.

Growth of U.S.-Taiwan Ties

That the TRA has succeeded in nurturing U.S.-Taiwan ties can be
seen clearly in a number of areas. On the economic front, we have
a vibrant, mutually beneficial trade relationship, with total
annual trade of over $50 million. Taiwan is the seventh largest
market for U.S. exports and our fifth largest foreign
agricultural market. For our part, the U.S. absorbs one fourth of
all Taiwan exports. Taiwan and the U.S. passed a milestone in
their economic relationship last year with the completion of the
bilateral market access agreement in conjunction with Taiwan's
application to the World Trade Organization. Last year, we also
signed a bilateral "Open Skies" agreement to expand civil
aviation links.

We also have extensive cooperation in science and technology,
environment, public health, and other fields. AIT and TECRO, for
example, have concluded over 100 agreements -- another indication
of the richness of the ties with Taiwan.

Clinton Administration Policy

Like its predecessors, the Clinton Administration is fully
committed to faithful implementation of the TRA. Indeed, the
Administration in 1994 conducted an extensive interagency review
of U.S.-Taiwan policy -- the first such review since 1979 -- to
make sure that all that could be done was being done. On the
basis of that review, the Administration has undertaken a number
of specific steps: authorized high-level U.S. officials from
economic and technical agencies to travel to Taiwan when
appropriate; expanded economic dialogue through the Trade and
Investment Framework Agreement (TIFA) talks and the Subcabinet-
Level Economic Dialogue (SLED); and supported Taiwan's
participation in international organizations where statehood is
not an issue.

Let me emphasize one aspect of the Administration's policy that
is firm and unchanging. The Administration continues to insist
that cross-Strait differences be resolved peacefully, as
demonstrated in March 1996, when President Clinton ordered U.S.
carriers to the waters near Taiwan.

Not A Zero Sum Game

The U.S. policy framework, of which the TRA is part, allows us to
retain substantive, but unofficial relations with Taiwan, while
pursuing improved ties with the P.R.C. Six U.S. administrations
of both parties have engaged Beijing in order to promote U.S.
interests and to encourage a responsible P.R.C. role in the
world. The U.S.-P.R.C. relationship that followed the
normalization decision -- for all of its ups and downs -- has
contributed enormously to stability and peace in Asia -- an
environment which is very much in Taiwan's interest.

In reviewing the past twenty years of the three intertwined
relationships -- U.S.-P.R.C., U.S.-Taiwan, Taiwan-P.R.C. -- what
becomes absolutely apparent is that gains in one relationship do
not dictate a loss in either of the other two. In fact, the
reverse is true: gains in one have contributed to gains in the
others. To illustrate my point about this positive dynamic, I
would like to note that the resumption of cross-Strait
discussions after a hiatus of three years occurred simultaneously
with the improvement of our relations with the P.R.C.

Cross-Strait Relations

Arguably, while the gains in the U.S.-P.R.C. and U.S.-Taiwan
relations have been formidable, the Beijing-Taipei relationship
has actually experienced the most dramatic improvement. The
trade, personal contacts, and dialogue now taking place across
the strait were unimaginable twenty years ago.

Economic figures demonstrate how much things have changed. Trade
between Taiwan and the P.R.C. totaled nearly  $23 billion at the
end of 1998. The P.R.C. is Taiwan's third largest overall trade
partner surpassed only by the U.S. and Japan. Commitments of
Taiwan investment in the P.R.C. now exceed $30 billion. With
30,000 individual Taiwan firms having invested in the P.R.C.,
over three million mainland Chinese are now employed with firms
benefiting from that commitment of funds.

Economic ties have led to increasing personal ties. Up to 200,000
Taiwan business people now live and work in the P.R.C.. Last
year, there were 1.7 million visits by Taiwan residents to the
mainland.

This greater economic interaction is not just positive -- it is
the basis for a sense of confidence that common interests across
the Strait will motivate the two sides toward productive
dialogue. Taiwan's security over the long term depends more on
the two sides coming to terms with each other than on the
particular military balance. The economic and social ties across
the Strait are a force for stability and a basis for improved
cross-Strait relations in the political realm.

One of the most salutary developments in East Asia during the
early 1990s was the emergence of a dialogue between Taiwan's
Straits Exchange Foundation, or SEF, responsible for Taiwan's
unofficial relations with the mainland, and the Mainland's
Association for Relations Across the Taiwan Strait, or ARATS. The
two sides moved to restore the formal dialogue, suspended in
1995, with the October 1998 visit to the mainland by SEF Chairman
Koo Chen-fu. Koo and his ARATS counterpart, Wang Daohan, reached
a four-point consensus, which included a return visit to Taiwan
by Wang, now scheduled for Fall. Koo's meeting with President
Jiang Zemin was the highest level contact between Beijing and
Taipei since 1949. As such, it substantially improved the climate
for cross-Strait exchanges. The consensus that was forged
provides an excellent basis for developing the approaches
necessary to resolve the difficult issues between the two sides.

The TRA in the Future

The Taiwan Relations Act has guided us successfully through the
last twenty years. Looking forward, I believe the TRA provides
the comprehensive framework for dealing with future challenges.
We should be extremely cautious about any adjustments to this Act
which has worked so well.

As I have said, insisting on peaceful resolution of differences
between the P.R.C. and Taiwan will remain U.S. policy. Our belief
is that dialogue between the P.R.C. and Taiwan fosters an
atmosphere in which tensions are reduced, misperceptions can be
clarified, and common ground can be explored. The exchange of
visits under the SEF/ARATS framework, currently rich in symbolism
but still nascent in substance, has the potential to contribute
to the peaceful resolution of difficult substantive differences.

Clearly, this will not be easy, but this Administration has great
confidence in the creativity of the people on Taiwan and the
people on the mainland to give the dialogue real meaning.
Imaginative thinking within this dialogue might result in new
understandings or confidence building measures on any number of
difficult topics. But, only the participants on both sides of the
strait can craft the specific solutions that balance their
interests while addressing their most pressing concerns.

Neither the P.R.C. nor Taiwan would be served by over-emphasis on
military hardware while neglecting the art of statesmanship. From
the P.R.C.'s perspective, it should think twice about whether
development or upgrade of any one type of weapons system will
contribute to the P.R.C.'s security, or, conversely, whether it
might actually detract from that security by fostering tension,
anxiety, political instability, or an arms build up in the
region. At the heart of this calculation is the reality that the
P.R.C. cannot expect to pursue its defense policy in a vacuum.
Its decisions on military modernization will generate responses
from other actors.

Or, as Secretary Albright recently said in Beijing:


"Nothing would better serve China's interest than using its
developing dialogue with Taiwan to build mutual confidence and
reduce the perceived need for missiles or missile defense."


>From Taiwan's perspective, the TRA's continuing guarantee that
Taiwan will not suffer for lack of defensive capability enhances
Taiwan's confidence and counterbalances anxieties over P.R.C.
military capabilities. There has been a lot of attention focused
on potential U.S. provision of theater missile defense to Taiwan.
This is premature. High-altitude TMD is still in development and
is therefore not going to be provided to anyone in the immediate
future. Down the road, as with our consideration of sale of other
defensive capabilities, our decisions on provision of any sort of
missile defense will be based on an assessment of Taiwan's
legitimate defense needs. As we consider these needs, we will
certainly take into account the security situation in the Strait,
including P.R.C. deployments, the pace and scope of dialogue
between the P.R.C. and Taiwan, and the overall regional security
picture.

In this age of highly sophisticated weaponry, I think we are all
sometimes prone to equating security with military capability.
But a durable peace will rest less on arms than success in
addressing differences through dialogue on a mutually acceptable
basis. Thus, whereas missiles and missile defense systems
ultimately cannot in themselves secure peace and prosperity,
dialogue and creative compromise can do so.

Dialogue and compromise cannot be wedded to an imposed timetable.
Good faith is required of, and in the interest of, both sides.
The provisions of the TRA and general U.S. policy in the region
will continue to contribute to an environment conducive to
dialogue and therefore to finding a lasting resolution to
differences across the Taiwan strait.

Conclusion

U.S. relations with the P.R.C. and the people on Taiwan are
likely to be one of our most complex and important foreign policy
challenges for many years to come. This Administration, like the
five Republican and Democratic Administrations before it, firmly
believes that the future of cross-Strait relations is a matter
for Beijing and Taipei to resolve peacefully.

There is no shortage of good ideas to resolve differences, and
there is no unique solution. There are many ways that the two
sides can enhance trust and reduce tension. They have made a
start, and the channel of communication is open.

Our role should not be as a mediator but instead as a contributor
to an environment in which the two sides can take good ideas and
build on them. This role has three elements: having sound
relationships with Taiwan and the P.R.C.; maintaining stable,
consistent, and predictable policies in the region so that both
Taiwan and the P.R.C. focus energies on engaging one another
directly rather trying to pull us over to their side; and
adhering to the overall China policy framework that has served
our interests well.

For the U.S. to play this role effectively and instill
confidence, agreement between the legislative and executive
branches on policy in the region is essential. And we must have a
policy that will be supported by the American people. The
experience of the TRA over the past twenty years provides a
useful model for us to follow.


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