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Panama Has Ditched Taiwan. Here’s Why It Matters for America.

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The National Interest, 22 June, 2017

Last week’s sudden announcement by Panamanian president Juan Carlos Varela that Panama would henceforth be shifting its diplomatic relations from Taiwan to mainland China was not entirely unexpected in Taipei. Tsai Ing-wen had deliberately avoided visiting the country during her visit to the region after Panamanian leaders had delayed the acceptance of Taiwan’s new ambassador there for more than six months. For Taipei, it was clear that the writing was on the wall. Varela’s decision to favor Beijing came as another hit for Taiwan after it lost two other allies in the past year.
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So what lies behind the recent moves of Taiwan’s allies to recognize Beijing instead? Part of the story relates to Taiwanese president Tsai. Coming from the independence-minded Democratic Progressive Party, President Tsai’s decision not to affirm the 1992 Consensus (on One China) and her congratulatory telephone call to president-elect Donald Trump in December of last year were poorly received in Beijing. Shortly after the telephone call, one of Taiwan’s African allies, Sao Tome and Principe, suddenly announced that it was dumping Taipei in favor of Beijing. According to Zhang Baohui, an academic at Lingnan University in Hong Kong, the shift by the small African country indicated that “Beijing has a new Taiwan strategy: they’re going back to their confrontational style, and the truce with Taiwan over the past eight years is over.”

Given the fact that the United States sits astride this precarious status quo, any increase in Cross-Strait tensions directly impacts U.S. national interests. While the official U.S. policy is to support the “One China” policy and maintain close diplomatic and economic ties with China, it is also committed by domestic law to protecting Taiwan from unification-by-force. Regardless of their preferences, U.S. presidents are obliged by the Taiwan Relations Act of 1979 to protect Taiwan and supply it with adequate military arms. Panama’s decision to abandon Taiwan—and the general trend it represents—raises two very difficult questions for policymakers in Washington. First, what does Panama’s decision mean for control of the strategically important Panama Canal? After all, the Navy depends on the canal to shift vessels from the Atlantic to the Pacific Ocean—particularly if there was a Taiwan-related contingency. Second, what does Taiwan’s gradual diplomatic isolation portend for the tiny country and for the U.S. policy to defend it from mainland China. Is the policy sustainable, given the massive changes in economic and military power across the Taiwan Strait?

In answering the first question, American policymakers should take Panama’s decision seriously and would be unwise to dismiss its strategic repercussions. The canal has long had a deeply strategic aspect for the U.S. Navy, which uses the canal transit from the Atlantic theater to the Pacific theater. In case of a Taiwan contingency involving a Chinese attempt to invade the island, U.S. forces in the Atlantic would certainly attempt to transit using the canal. In a well-known article, How the United States Lost the Naval War of 2015, written by James Kraska in 2010, China uses its commercial control of the ports on either end of the canal to close off use to U.S. vessels. While much of Kraska’s article is set in a fictional universe, he draws many strategic elements from reality. Presently, a Chinese company CK Hutchison Holdings (formerly Huchison Whampoa) does own and operate the two Panamanian ports through its subsidiary Hutchison Ports. In 1996, a U.S. State Department cable alleged that Panama’s 1996 auction for the operating rights over the canal had been facilitated by a Chinese state-owned enterprise, the China Resources Enterprise, which gave $400 million to Hutchison Whampoa Limited to clinch the deal. Despite a bid that was fourth, behind a Kawasaki bid, a Bechtel bid and a M.I.T. bid, the Chinese won the deal and now have a twenty-five-year lease, with an automatic renewal for another twenty-five years.

Policymakers in the Trump administration must also consider the sustainability of the U.S. commitment to protecting Taiwan. As things stand, any attempt to abandon its defense guarantee to Taipei would most likely severely damage American credibility among its Asian and European allies. However, on the other hand, it is clear that Taiwan’s increasing diplomatic isolation and inadequate defense posture strains the relationship. If a robust deterrence is the best way to avoid war, then it is clear that both Washington and Taipei have drifted very closely to disaster. Unfortunately, there is enough blame to go around for both. Spending around 2 percent of its budget on defense, Taiwan’s defense capabilities are in need of updating. For their part, successive American administrations have sought to placate Beijing by providing less and less arms at ever-higher prices. A RAND Corporation study published in 2015 noted that high rates of spending have “allowed the PLA to narrow the gap” and that due to new air, naval and missile systems deployed by the PLA, “the US ability to achieve its objectives in a Taiwan scenario [has] continued to erode.”

The only guarantee for a peaceful transition and unification is if Taiwan’s population decides that is what it wants and if a political solution can be agreed upon by both parties. However, Beijing is still intent on attempting to absorb Taiwan economically, to isolate it diplomatically and to outgun it militarily. Despite China’s impressive rise, the fact is that—as it stands—most Taiwanese do not want to be reunified with the mainland. Having watched the salami-slicing of Hong Kong’s Basic Law and liberties, they recognize that any unification with a Communist Party-led China, would likely lead to the suppression and submersion of both their political rights and their Taiwanese identity. Any attempt by China to unify Taiwan with the mainland by force, would lead to an international crisis. For Americans, Europeans and other liberal democracies, to sit by while an authoritarian regime invaded and suppressed a democratic society would be intolerable—morally as well as politically. Consequently, American—and arguably European, Australian and Japanese—policymakers should seek to bolster Taiwan’s defense capabilities and drive Beijing toward peaceful unification scenarios. The recent news that Taiwan will raise its defense-spending to 3 percent of GDP and develop its indigenous defense industry is to be welcomed. If peace is to be maintained in the Strait, then it will be because conventional deterrence is alive and well.

 


A Taiwanese Arms Package Could Be Used as Leverage in the Korean Crisis

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The National Interest, 29 May, 2017

Taiwan has long been a dormant problem for the U.S.-China relationship, successfully shelved by the Three Joint Communiqués of 1972, 1979 and 1982, with the last serious incident being the 1995 Third Taiwan Strait Crisis. Nonetheless, Donald Trump’s actions in the Asia-Pacific region could signal an end to the modus vivendi that has existed for almost fifty years. While President Trump’s decision to accept a congratulatory call from Taiwanese president Tsai Ing-wen did not herald a new understanding of the “One China” policy, as many immediately thought, it is not clear yet what the new administration’s China policy will be. Under Obama, many strategists worried that the balance of power in the Taiwan Strait was moving in China’s favor, as arms deals to the island were delayed and China grew in strength. Trump’s administration appears to be seeking to redress this issue. A new arms package to Taiwan is on the drawing board and among the names being considered for undersecretary of state for policy is Randy Schriver. An Asia expert, Schriver served in the State Department as an aide to Richard Armitage and is currently the president of the Project 2049 Institute, an Asian security think tank based in Washington. Schriver would be a strong pick for any president intent on bolstering its ties with Taipei. However, critics are already pointing out holes in the president’s plan to strengthen relations. There are recent reports that Trump is actually continuing to perpetuate the United States’ lackluster support for Taiwan as the new deal has stalled, seemingly in an effort to appease China.

The U.S.-Taiwan-China Triangle

Beijing’s enduring hostility towards Taiwan has meant that Washington and Taipei have mutual-defense agreements to safeguard its “independence.” In 1979, the United States switched its diplomatic recognition from Taipei to Beijing as the legal representatives of China and acknowledged Taiwan as a part of One China. However, that same year Congress passed the Taiwan Relations Act, which had the aim of enabling “Taiwan to maintain a sufficient self-defense capability,” and the United States is mandated to provide that capability. Both Republican and Democrat presidents have been committed to the relationship and provided Taiwan with a variety of advanced military assets. For instance, in 1992, H. W. Bush sold Taiwan 150 F-16 jets at $6 billion, and the Clinton administration supplied missiles and radar systems to greatly improve Taiwan’s air-defense capabilities.

China always objected to the sale but was never in a position to offer any real opposition until recently. As a result of growing Chinese economic and military strength, U.S. deals have become smaller and met with stiffer backlash. In 2005, Beijing passed the Anti-Secession Law which formalized into policy China’s long-standing rule to use “non-peaceful means” to ensure its territorial integrity should the Taiwanese government declare independence. Signaling that Beijing was no longer afraid to voice its intentions openly and become more assertive in reducing U.S. influence with Taiwan. In 2010, Beijing did not only condemn a $6 billion package, but also sanctioned some participating U.S. companies. It would take until 2015 before Obama authorized another package and it would be a markedly smaller at $1.83 billion. Announced with little fanfare, it still attracted Beijing’s ire. Upon hearing of the deal, the Chinese vice foreign minister said the move “severely damaged China’s sovereignty and security interests.” A year later Obama would even block a smaller $1 billion sale, an obstruction that was reported by the Washington Free Beacon to have considerably damaged Taiwan’s defensive capabilities as it contained spare fighter-jet parts and additional missiles. The move coincided with Trump’s phone call with Tsai, giving the impression that the Obama administration prioritized good relations with China over U.S. obligations of the Taiwan Act.

Randy Schriver and Trump’s China Policy

Trump’s China rhetoric has signaled a significant break with Obama’s Asia-Pacific strategy. A new arms deal on the table could be one such indication that Trump has no intention of going soft on China, as some critics allege. According to sources, the administration may be considering providing to Taiwan rocket systems and anti-ship missiles, with companies such a Lockheed Martin being linked to the deal. Lockheed is the manufacturer of the THAAD missiles system currently being deployed to South Korea, this raises the possibility that the system could also be sold to Taiwan. Even discussions of THAAD could prove troublesome as Beijing has already raised considerable objections to the missiles system in South Korea, even going so far as to apply economic pressure on South Korean companies.

If the rumor mill is to be believed, then Secretary of Defense Jim Mattis is considering Randy Schriver, a prominent Taiwanese supporter, to fill the position of undersecretary of defense for policy. With a strong network among U.S. allies in the Asia Pacific, Schriver would be a reassuring figure for America’s friends in the region. He is also closely linked to Richard Armitage, having worked as his chief of staff and senior policy advisor when Armitage was deputy secretary of state. Schriver is known to be a vocal proponent of strong U.S. engagement with Taiwan and maintains a tough stance against Chinese expansionism. In a piece he co-authored in The National Interest, after the infamous Trump-Taiwan phone call, Schriver wrote that “higher-level engagement with Taiwan serves U.S. national interests and values,” arguing that the phone call was, in fact, “a good first step” towards rebalancing the trilateral China-Taiwan-U.S. relationship.

Schriver himself has called for the United States to provide submarine technology and vertical, short takeoff and landing fighter jets. If rumors about the new arms package are true, then Schriver could be well placed to carry this particular agreement through, as he is already familiar with the weapon systems and their capabilities. He has long been a proponent of balance as a means of deterrence.

Objectives and Issues

The United States must ensure that deals are no longer deferred and it delivers equipment that fits Taiwan’s defense policy of stopping an invasion force before it reaches the island. Schriver’s appeal for the jets to be supplied to Taiwan could be a bad call. In 2010, Cross-Strait military analyst Mark Stokes told a U.S. congressional commission that “every citizen on Taiwan lives within seven minutes of destruction” and in 2015 Beijing bought from Russia several S-400 Triumf, an antiaircraft missile system. Expected to be fully operational by 2020, the missile launchers, which have a range of 400 kilometers, will allow China to strike aircraft over Taiwan, essentially giving China air supremacy in the territory. The Chinese ballistic-missile buildup was examined in a Taiwanese defense report, which stated that by 2020 China would be in a position to invade the island and successfully repel a U.S. counterattack. With the sheer amount of Chinese missiles pointed at Taiwan, it would be unwise for them to buy large amounts of expensive aircraft, which could be destroyed before getting the chance to take off. It is, however, encouraging that Schriver has also called for the sale of submarine technology to Taipei, something the country has been seeking for some time. Advanced submarine technology alongside the defensive missile systems, alleged to already be part of the arms package, would make a suitable combination for an over-the-horizon defense package. In a way, imitating China’s anti-access/area denial (A2/AD) might be Taiwan’s strongest approach to defense. What’s good enough for the gander should be good enough for the goose.

The administration is struggling at the domestic level. At the moment, while Trump’s foreign-policy focus is concentrated in the Pacific, he has gone over one hundred days and has failed to appoint key Asia policy positions across the U.S. government, hampering strategy and slowing relationship-building in an increasingly heated region. It might well be that the arms package never gets off the table, with figures inside the White House stalling the deal to appease Beijing. On the other hand, for an administration that negotiates across the board, the arms package delay might well be connected to the administration’s Korea strategy. As the situation in the Korean Peninsula is ongoing Trump could be using the prospect of a large Taiwanese arms package as leverage in the crisis. For instance, he could offer to remove items from the package or continue to defer it in exchange for tougher Chinese sanctions on the Hermit Kingdom. After the Syrian strike, Trump has developed U.S. foreign policy with Chinese characteristics, keeping Beijing guessing. China frequently caught America off guard in the past, Trump could be playing the Chinese at their own game.

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