- Investigation 332-438: U.S.-Taiwan FTA: Likely Economic Impact of a Free Trade Agreement (FTA) Between the United States and Taiwan
U.S. House Committee on Foreign Affairs:
Why China Matters
(Washington, D.C., June 16, 2011)
Testimony by Rupert Hammond-Chambers
Madam Chairwoman and esteemed committee members, it is my great pleasure to testify today in front of this important congressional committee. The House Committee on Foreign Affairs has, for many years, played a leadership role in directing and supporting U.S. foreign policy. This is particularly true of our nation’s interests in North East Asia.
It has been since 2004 that a full congressional hearing on Taiwan has been held on Capitol Hill, and much has changed since then. Regrettably, the United States finds its interests and equities on the island significantly reduced – mostly as a function of the zero-sum policy game played by U.S. policy makers who are attempting to calibrate our interests with Taiwan on the basis of America’s China policy.
The U.S. has an enormous interest in seeing Taiwan continue on its present positive trajectory. Over the past 15 years, Taiwan has held four free presidential elections. On two of those occasions, it has seen the peaceful transition of power from one party to another. Taiwan is a dynamic democracy with real power vested in both the executive and legislative branches of government, each working with and restraining the other. The island has two large and highly competitive political parties, offering significant policy choices for its citizens. Taiwan has also become a partner with the United States in combating intellectual property piracy, and it has an established track record on human rights and free media. Taiwan plays a lead role in providing for peace and security in the region by participating in programs such as the Container Security Initiative, and it is also taking on a leadership role by providing disaster relief assistance on a global scale. Taiwan also takes its defense and security priorities seriously, with significant investments in its armed forces when it can get access to modern equipment.
Taiwan’s policies and actions clearly reflect and support American foreign policy priorities in Asia – standing in stark contrast to a number of other Asian countries, including China, whose policies and actions frequently run contrary to American interests. Given these important advances for a long-term American friend, it would seem logical that Taiwan would be worthy of robust American support. That has not been the case in the recent past, however, as America’s relationship with China has cast a long shadow over U.S. – Taiwan relations.
In January of 2011, the Obama Administration was planning to move forward with sending Deputy United States Trade Representative Demetrius Marantis to Taiwan to re-launch trade dialogue under the Trade and Investment Framework Agreement (TIFA). Those talks had been frozen since 2007 over the lack of U.S. access to Taiwan’s beef market. While some issues remained, the USTR had apparently determined – correctly in the US-Taiwan Business Council’s view – that it was time to move beyond beef. Mr. Marantis would have been the most senior Obama Administration official to visit Taiwan in years. Unfortunately, however, that meeting did not take place. Instead, new issues surrounding U.S. beef exports have once again derailed the entire U.S.-Taiwan trade relationship.
In the early parts of this year, Taiwan began testing meat for ractopamine. A substance used as an animal feed additive, ractopamine promotes leanness in animals and is used extensively in raising cattle, pigs, and geese. Taiwan has long banned the drug – as do 160 other nations – but it only started testing for it at the beginning of 2011. Ractopamine residue has since been detected in U.S. beef imported to Taiwan, and the market for U.S. beef exports to the island has contracted.
Other areas of U.S.-Taiwan relations have ground to a halt as well. The Visa Waiver and Extradition Agreement initiatives appear relatively benign, and yet progress is at best proceeding at a snail’s pace. If these two initiatives are indeed indefinitely put on hold, or continue to drift without leadership, the Obama Administration will then have only a single instance in which they invested political capital in America’s relationship with Taiwan – January 29, 2010 when it notified to Congress several Bush-era defense programs.
If the calculation in January was to push beef aside, with the notion that stalling the relationship over one issue was hurting America’s broader interests, how and why has that position changed? Instead of sticking with that new position, the U.S. has doubled down. The situation becomes especially vexing because the beef issue is a red herring. Issues surrounding beef imports affect many of our top trading partnerships in Asia, but only with Taiwan did the U.S. make the decision to suspend our entire trade dialogue over the issue. In relations with Japan and South Korea, we were able to make broad progress while compartmentalizing beef. But doing that takes leadership and ambition for the relationship – in U.S.-Taiwan relations we have neither leadership nor ambition.
The beef issue has now become inexorably intertwined with what remains of our non-defense relationship with Taiwan. Meanwhile, the Administration’s appetite for arms sales in the face of Chinese sensitivities hovers at close to zero. There is a small possibility that the Obama Administration will notify to Congress an upgrade of Taiwan’s F-16A/B fighters in 2012. However that program may very well be further postponed, caught up in the White House’s calculations over Mr. Obama’s re-election campaign and his desire to show progress in U.S. – China relations.
Your office, Madam Chairwoman, has raised the issue of Administration violations over the Javits report, and the fact that the U.S. Department of State has not been briefing you on Taiwan after assuring you they would. Senator Lugar has engaged in an exchange with the U.S. Department of State over process violations on arms sales notifications. These Administration actions come with an unwillingness to provide any reasoning for denying Taiwan the ability to submit a Letter of Request (LOR) for F-16s – a platform Taiwan already has in its inventory, and one that’s required to provide for Taiwan’s national defense.
As we take stock of the past 3-4 years of bilateral relations, and looking forward towards the coming months and into 2012, it will be all too easy to claim that the beef issue was responsible for undermining a better relationship. But this is not the case. The current poor state of the U.S.-Taiwan relationship is not merely the result of disagreements over a parochial agricultural issue. Instead, it is the consequence of a much broader lack of ambition on the part of Washington to promote its relationship with Taiwan. The beef issue is a symptom of a wide-ranging malaise, a condition that is impacting all aspects of our relationship – including defense.
The continued suspension of TIFA talks, and the listless drift of other bilateral “priorities” such as the Visa Waiver and the Extradition Agreement, may very well have heralded the end of what passed for an agenda for U.S.-Taiwan relations – at least until January 2013 when Mr. Obama, or his challenger, will have an opportunity to assess anew how to proceed.
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