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That is simply wrong. It is wrong from a political standpoint, that a country which is working hard to measure up to democratic standards should be treated worse than countries which are openly contemptuous of those very values. And increasingly, it is wrong from an economic standpoint. While we keep our distance from Taiwan, other countries have sent more than 30 Cabinet-level officials to Taipei in the past 3 1/2 years to promote business interests. Our government's unwillingness to accord Taipei similar respect puts American business at a serious disadvantage in the increasingly important Taiwanese market.
An article in the October 8 National Journal makes very clear the costs of our overlooking the other China. I request that the article, `The Other China,' be printed in the Record.
The article follows:
From the National Journal, Oct. 8, 1994
The Other China
The corporate moguls who accompanied Commerce Secretary Ronald H. Brown to China at the end of August were essentially stage props for a triumphal series of ceremonial contract signings. Still, they were delighted that President Clinton has avoided angering Beijing by declaring that human rights concerns should not pose a barrier to trade.
When it comes to greasing the skids for deals with Taiwan--the `other China'--however, the U.S. business community wants the White House to be less timid about offending the rulers of mainland China, formally the People's Republic of China (PRC).
After the results of a long-awaited Clinton Administration review of U.S. policy toward Taiwan--formally the Republic of China (ROC)--were disclosed on Sept. 7, Clinton was roundly criticized as excessively cautious by business lobbyists and congressional boosters of trade with Taiwan.
As one of the tigers of the so-called East Asian Economic Miracle, Taiwan has built up massive foreign-exchange reserves and has both the desire and capacity to purchase large quantities of advanced technology for both civilian and military purposes.
After many profitable years as Taipei's dominant business partners, American businesses suddenly find themselves competing for a share of the lucrative Taiwanese market. `The kind of client-state relationship that we used to have is gone,' explained David N. Laux, president of the USA-ROC Economic Council, a business group that seeks to foster trade with Taiwan.
Laux, whose council represents scores of Fortune 500 firms, argues that higher-level contacts by U.S. officials are needed to nurture the commercial ties that have made Taiwan the United States sixth-largest trading partner. `We are not paying the proper attention to Taiwan that we should for its economic performance,' he said in an interview.
Current trade statistics support Laux's argument. Mainland China may be the world's premier emerging market, but for now, Taiwan is by far the larger customer for U.S. goods. American exports to Taiwan last year totaled $16.3 billion, compared with $8.8 billion to mainland China.
The Taipei government wants more attention, too. `There is a growing feeling among the people of Taiwan that they don't get adequate respect around the world because they are not recognized as a state by other countries,' explained Ralph Clough, a professor of Asian studies at the Johns Hopkins School of Advanced International Studies. Taiwan has `functioned in the world community as a de facto sovereign state for more than 40 years,' but does not enjoy membership in the United Nations and many other international organizations, Clough noted.
After its defeat by the Communists in 1949, the nationalist Chinese government fled to Taiwan, a 14,000-square-mile island in the South China Sea, 80 miles from the mainland, where for decades it held that it was the legitimate government of China in exile. In recent years, the Taipei government--while still committed to eventual reunification--has come to accept the reality that China is governed by separate political entities.
As Taiwan's political system has become more democratic, an aggressive opposition party, the Democratic Progressive Party (DPP), has emerged that pledges to declare independence if it wins next year's national elections. Citizens born on the mainland now constitute a shrinking minority, and the island's population increasingly regards itself as Taiwanese rather than Chinese.
In the face of growing DPP support, the ruling Kuomintang (KMT) party--though mindful of Communist China's threats to go to war to prevent Taiwanese sovereignty--has been forced to adjust its positions to seek greater international recognition. Taiwan is now on track for inclusion in the General Agreement on Tariffs and Trade (GATT) and is seeking `parallel representation' in the United Nations, citing Germany and Korea as precedents for dual U.N. representation. Taipei, despite rumblings of displeasure from Beijing, is also courting diplomatic recognition by other sovereign nations.
But the United States officially recognizes only one China, and since diplomatic relations were shifted from Taipei to Beijing in 1979, that has been the PRC. America's `one China' policy, of course, has always been largely a fiction. Unofficially, America has maintained the closest of economic and military ties to Taiwan.
Washington's contacts with Taipei are restricted to relatively low-level officials. Most communication is carried out through the artifice of an allegedly private entity, the American Institute in Taiwan (AIT), whose offices in both countries are staffed by people on leave of absence from the State Department.
DELICATE BALANCE
When Lynn B. Pascoe, the director of the AIT's Taipei office, called on Taiwan's foreign affairs minister on Sept. 7, he became a minor footnote to history. It was the first time since 1979 that the de facto senior American official in Taiwan was permitted to make such a visit.
The less-than-earth-shaking diplomatic breakthrough was occasioned by the Administration's Taiwan policy review, approved on Labor Day by the President while he was vacationing on Martha's Vineyard. Indeed, Pascoe's visit to the Foreign Ministry was to inform Taipei of the changes.
Billed as the first comprehensive review of Taiwan policy since 1979, the new policy strains to strike a balance between Taipei's growing desire for higher-level contacts with U.S. officials and Beijing's demands that America continue the pretense of not officially recognizing Taiwan as an entity separate from the rest of China.
The policy review keeps America's one China policy officially intact and reiterates that the United States does not back Taiwan's entry into the United Nations. It supports Taiwan's expected admission to the GATT, however, and says that Taipei's voice should be heard in other `appropriate' international groups, including the new forum on Asia-Pacific Economic Cooperation.
Visits to the United States by Taiwan's president and other top leaders are still forbidden, but the new policy specifically permits such officials to `transit' America. The latter provision responds to the congressional furor in May when Taiwanese President Lee Teng-hui's airplane made a refueling stop in Hawaii but was denied permission to stay overnight.
The key adjustment in the policy is to boost the octane of Washington's backing
of U.S. corporate interests in Taiwan. The idea, Administration officials say, is not to raise the diplomatic stakes but rather to facilitate solving problems and doing business.
The policy sets guidelines based on the somewhat murky proposition that some government contacts are official but others are not. No meetings are to occur between senior officials, whose duties are considered to be primarily diplomatic, military or political. But officials `at a relatively senior level' whose portfolios involve commercial, cultural or technical issues will be permitted to get together.
To promote commercial and cultural ties and to foster a `sub-Cabinet economic dialogue' with Taipei, high-level U.S. officials from economic and technical agencies will now be permitted to go to Taiwan. Even visits by Cabinet officers involved with trade or technology appear possible, subject to case-by-case approval.
Senior Taiwanese officials visiting the United States would be barred from setting foot in such `official' sanctums as the White House, the Old Executive Office Building, the Pentagon and the State Department. But a meeting at the Commerce Department would be OK.
At the same time, State Department officials at the undersecretary level who have nonpolitical portfolios can now meet with senior Taiwanese visitors, just so long as they don't do so in their offices at Foggy Bottom.
Another mini-refinement permits the Taiwanese government representatives who are stationed in Washington to include the word `Taipei' in the same of their office, which currently bears the uninformative name of the Coordination Council for North American Affairs. The new title will be Taipei Economic and Cultural Representative Office in the United States.
A delegation of Taiwanese legislators recently passed through Washington on the way to a rally at the United Nations, whose agenda committee voted on Sept. 22, at the urging of the PRC, not to take up the question of representative for Taiwan. The lawmakers met with State Department officials on Sept. 21 to register their disappointment with the Clinton policy review, which Sen. Parris H. Chang, DPP member, described in an interview as `retrograde in certain respects.' Albert Lin, the information director for Taiwan's Washington outpost, said his office's new title was selected from a list of acceptable options but was not his country's first choice.
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KEEPING BEIJING HAPPY?
Beijing's reaction to the Clinton policy adjustment, although predictably negative, was perfunctory in tone. A government spokesman declared that Washington's action `interferes with the internal affairs of China' and `seriously' violates the three joint communiques that form the basis of U.S. relations with Communist China. At the same time, however, the Chinese governments repeated an invitation to Clinton to come to Beijing for a summit meeting.
Taiwan's government offered lukewarm praise for the modest changes but complained that they don't go far enough. Its official response called the policy review `welcome' but added that `these adjustments have not sufficiently addressed the needs arising from the close relationship between the United States and the Republic of China.'
In an interview, American Enterprise Institute for Public Policy Research director of Asian studies James R. Lilley, a U.S. ambassador to China during the Bush Administration, faulted the Clinton team for making too large a deal out of too small a change. `There should have been no review in the first place,' he said,
citing the fact that the Bush Administration, with no fanfare, had permitted Carla A. Hills, who then held Cabinet rank as U.S. Trade Representative, to visit Taiwan in December 1992.
`You just do these things,' Lilley argued. `You don't put it out in the press [as a major policy review] and stick your tongue out at Beijing.' Citing Commerce Secretary Brown's recent trade mission to China, he said that `Clinton ought to have Brown do the same thing in Taiwan.'
That would be fine with Laux, whose business council lobbied the Bush Administration to permit Hills to address its 1992 conference in Taiwan. In December, the council will convene again in Taipei and hopes the highlight will be an appearance by a Clinton Cabinet officer.
Responding to the White House policy review, Laux pointed out that `more than 30 Cabinet-level officers from European and other countries have visited Taiwan in the last three-and-a-half years to promote the business interests of their companies.' He added that despite Beijing's misgivings, those countries have been able to maintain diplomatic relations with China. `The sky has not fallen in on any of those countries,' he said.
Acknowledging that during his tenure in government, he was `part of the process' that led to America's current China policy, Laux said, `I'm not blaming anyone in particular, but we have unnecessarily put ourselves in a straitjacket' in terms of trading with Taiwan.
For the ailing U.S. defense industry, Taiwan's prodigious appetite for armaments is a tempting target. Michael T. Klare, a military affairs expert at Hampshire College, said that `the China-Taiwan nexus probably constitutes the most vibrant arms market in the world today.' Despite improved communications between the two Chinas, he noted, neither has repudiated historical claims to the territory of the other.
Although the Reagan Administration, in a 1982 communique with Beijing, agreed to reduce arms sales to Taipei, the 1979 Taiwan Relations Act authorizes U.S. contractors to sell Taiwan whatever is deemed necessary for its defense. And when Taipei appeared interested in buying French-built Mirage fighters, the Bush Administration responded by approving the 1992 sale of 150 U.S.-made F-16 fighters to Taiwan. Delivery of the advanced fighters is still more than a year away.
Klare, in an interview, noted that military technology acquired from other countries, including U.S. ships, aircraft and electronic equipment, is helping Taiwan establish its own defense manufacturing capacity through `reverse engineering.'
Despite the F-16 deal, the American League for Exports and Security Assistance Inc., a defense industry trade association, has estimated that restrictions on arms sales to Taiwan have cost as much as $20 billion in U.S. revenues and affected more than 400,000 American jobs.
But military technology is not the only commodity that Taipei is in the market for. Having blossomed into the world's 20th-largest economy. Taiwan has entered into a massive six-year infrastructure improvement program to meet the demands of an increasingly affluent population of 21 million.
The U.S. Commerce Department has said that Taiwan's $235 billion national development plan creates the `largest market in the world today for major infrastructure projects,' including up to $50 billion worth of foreign procurement for energy, pollution control, telecommunications and transportation projects.
Thus far, said William S. Botwick, president of the American Chamber of Commerce in Taipei, European bidders have won more than $5 billion in contracts under the Taiwan development plan, `four times more than U.S. firms have.' Botwick, the General Motors Corp.'s managing director in Taiwan, said that he traveled to Washington twice last year to urge Administration officials to take bolder steps to `redress past slights' and restore `mutual trust' to the U.S.-Taiwan bilateral relationship.
After being upstaged by the highly publicized debate over extending preferred trading status to mainland China and its emerging market, Taiwanese interests are clamoring to remind Washington of their own business relationship and their government's success in reducing the U.S. trade deficit with Taiwan, while the deficit with mainland China has been growing.
The Washington lobbying firm of Cassidy and Associates, and its public relations affiliate, Powell Tate, recently signed a three-year, $4.5 million agreement to represent the Taiwan Research Institute, a private, nonprofit study center with ties to Taiwan's ruling party. With help from its U.S. consultants, the Taipei think tank joined the chorus condemning what it said was the timidity of the Clinton policy review.
A Powell Tate press release said that `if the United States sincerely wishes to recognize the remarkable progress of democracy in Taiwan, it should treat Taiwan officials with the respect and consideration it affords representatives of other democratic nations.'
Taiwan's allies on Capitol Hill also weighted in. Sen. Paul Simon, D-Ill., said that Clinton passed by a golden opportunity to significantly revise long-outdated policies that today `seem like official pettiness.' Simon lauded the development of free elections, multiple political parties and a free press in Taiwan and expressed dismay that `we continue to cuddle up to the mainland government, whose dictatorship permits none of those.' Sen Frank H. Murkowski. R-Alaska, lamented that `bolder and more-substantive steps' were not taken. Sen. Hank Brown, R-Colo., alluding to U.S. willingness to engage North Korea directly, branded the policy review a `slap in the face to Taiwan.'
Johns Hopkins Asian expert Clough, however, gave the Administration credit for maintaining the delicate balancing act that enables the United States to pursue relations with both Chinas. `At best, it's a marginal change in the management of our policy,' he said of the Clinton review, `It's fascinating, the amount of ambiguity that's required,' he added.
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