Policy Brief Series TAIWAN RELATIONS ACT: TIME FOR A CHANGE?

Policy Brief IV - April 2014

THE TAIWAN RELATIONS ACT:

THE PAST AND THE FUTURE ASIA PROGRAM Xiaobo Hu

Policy Recommendations

• U.S. policy makers should recognize that it is in the U.S. interest to maintain stableASIA PROGRAM and constructive relationships with both Taipei and Beijing. • Washington should undertake a comprehensive review of the Taiwan Relations Act for its possible contributions to advancing American interests in East Asia for decades to come. • Washington should conduct a comprehensive review and cost-benefit analysis of potential unintended side effects that continuation of the TRA could bring to U.S.-China ASIArelations. PROGRAM • Washington should carry out a comprehensive review of the strategic ambiguity in U.S. foreign policy toward Beijing and Taipei. • The United States should have as a priority objective the promotion of peaceful relations across the Taiwan Strait.

April 10, 2014, marks the 35th anniversary of the Taiwan Relations Act, the U.S. legislation providing the legal underpinning for American ties with Taiwan. The Wilson Center’s Asia Program is pleased to present this series of four policy briefs, each of which offers recommendations designed to ensure that the TRA remains relevant to the policy challenges of the 21st century. Policy Brief Series - Taiwan Relations Act

At the 35th anniversary of the Taiwan Relations … Taiwan is a province of China.” To China, the Act (TRA), this policy brief aims at assessing Taiwan issue is “an internal affair in which no the legislation through a review of a world of other country has the right to interfere.” On the changes over the past 35 years. In early 1979, same day as the second communiqué, China as a response to normalization of the diplomatic also issued the Message to Compatriots in relationship between the United States and the Taiwan “promulgat[ing] a fundamental policy People’s Republic of China (PRC), the TRA was of striving for peaceful reunification of the introduced and passed in Congress within 15 motherland.” In 1981, China put forward its days. This background and subsequent changes Nine-Point Proposal seeking “a peaceful solution in U.S.-China relations and the world will help us to the Taiwan question.” to understand the impact and value of the TRA For its part, the United States always on the relationships among the United States, “acknowledges that all Chinese on either side of Taiwan, and the PRC in the past three and a the Taiwan Strait maintain there is but one China half decades. This article asks the question and that Taiwan is a part of China.” The U.S. of whether the TRA has promoted peace or government always recognizes that there is only reduced tension across the Taiwan Straits one China. In addition, the United States also amidst vast world changes. By doing so, it will “reaffirms its interest in a peaceful settlement suggest a comprehensive review of the TRA of the Taiwan question by the Chinese against the needs of U.S. foreign policy in face themselves.” of new global developments. When President Nixon and Chairman Mao THE TRA AND THE THREE COMMUNIQUÉS started talks for normalization, world geopolitics The year 2014 also marks the 35th anniversary was quite different. Taiwan and mainland China of normalization of the U.S.-China diplomatic were different too, both under their respective relationship. Normalization started with the Leninist type of single-party rule. The mainland landmark visit of President Richard Nixon to the was about to end its self-imposed isolation, and PRC in early 1972. As a result of that visit, the Taiwan enjoyed strong and influential lobbying United States and China signed the Shanghai in Washington, D.C. The United States was Communiqué, the first of three communiqués concerned about a potential PRC military attack that have defined and helped guide the on Taiwan; the issue of Taiwanese independence normalization of the relationship between the was not on the table. It was against this two countries. The second communiqué, or background that the Taiwan Relations Act was the Joint Communiqué on the Establishment of introduced and passed in Congress in two Diplomatic Relations, signed on January 1, 1979, weeks. As the TRA goes against the spirit of formally announced the commencement of the three communiqués and interferes with normal relations between the United States and internal affairs that the PRC considers its own the PRC. In these two communiqués, plus a sovereignty, Beijing views the legislation as third signed in 1982, the Taiwan issue occupied a a thorn in normalization of the U.S.-China prominent place in the normalization of the two relationship. countries’ relationship. THE TRA AND TENSION, STABILITY, In these three communiqués and subsequently AND PEACE on other occasions, China has made clear its Over the past 35 years, the TRA provided position that “the Taiwan question is the crucial additional legal basis for the United States question obstructing the normalization of to maintain de facto diplomatic relations relations between China and the United States;

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with Taiwan. In all three communiqués, national interests based on ideological both the United States and China reached prescriptions, and countries have traded and an understanding that it was important and developed interdependent relations across mutually beneficial for the United States to different political and social systems. “maintain cultural, commercial, and other In the late 1970s, China launched post-Mao unofficial relations with the people of Taiwan.” economic reforms with a fundamentally new The TRA also provides a legal basis for the understanding that World War III was avoidable U.S. government to provide Taiwan overtly through cooperation with the United States and with “arms of a defensive character.” In an other major powers around the world. Different incomplete estimate provided by the U.S. from Mao, Deng Xiaoping also reached out to Congressional Research Service, U.S. arms the former Soviet Union in an attempt to reduce sales to Taiwan totaled more than $44.8 billion hostility and distrust and to achieve peace in the between 1990 and 2011. Indeed, for three region. Beijing also accepted different political, recent years (2008, 2010, and 2011), when economic, and military systems within a unified cross-Strait relations were steadily improved China, the so-called “one country, two systems.” under President Ma Ying-jeou, the United States All this, Deng believed, would bring about the sold $18.7 billion worth of arms to Taiwan, or peaceful environment necessary for what China 41.7 percent of the entire arms sales to Taiwan should focus on—i.e., economic development. during a period of 21 years between 1990 and With the emphasis on economic development, 2 011. China’s goal of reunification becomes less Although the TRA does not require the United time-sensitive. In the face of all the challenges States to intervene militarily in case the PRC of economic reform and social changes on attacks or invades Taiwan, various interpretations the mainland, the PRC’s policy toward Taiwan of the TRA commit the U.S. government to appeared more reactive than proactive. In defend Taiwan militarily in such attacks. This— effect, the PRC has not called for immediate the three communiqués on the one hand “liberation” of Taiwan. As the Chinese mainland and the TRA on the other—created policy benefits from a stable relationship with Taiwan contradictions. Such contradictions have in turn for its own economic development, and since created “strategic ambiguity” that has guided the PRC is not pursuing reunification recklessly, U.S. policy toward Taipei and Beijing over the it becomes difficult to evaluate how successful past 35 years. Such strategic ambiguity, some the TRA was in preventing PRC aggression. policy analysts argue, may have prevented It is not only that the PRC lacks the will to aggression from the PRC, reduced tension “liberate” Taiwan in the very near future, but across the Taiwan Strait, and protected the life also the PRC lacks the military capacity to style of the people in Taiwan. engage in such a war over Taiwan without When one assesses the strategic ambiguity as major damage to its hard-earned economic prompted by the TRA, it is important to review development of the past 35 years. Even with the profound changes in the international double-digit annual growth rates in defense system since the late 1970s. The Cold War spending in the PRC, there is no report arguing ended about a decade after the United States that the mainland could militarily overpower the and China normalized their diplomatic relations. island. More importantly, there has been no The end of the Cold War also accelerated clear evidence to show any systematic Chinese globalization of the world economy. Nations military buildup aimed at invading Taiwan. have since moved away from defining their The tension is always there, though, and the

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PRC military buildup has not stopped. So the “special state-to-state relationships” with question is whether the TRA has helped reduce the mainland to tension intensified due to the tension. provocative moves by the Chen Shui-bian administration, and then to a substantial In “A Way Ahead with China: Steering the Right warming since Ma Ying-jeou defeated the DPP’s Course with the Middle Kingdom,” a recent presidential candidates in 2008 and 2012. In report published by the Miller Center for Public all this, there seems an internal dynamics that Affairs at the University of Virginia, the 1996 has helped shape cross-Strait relations through Taiwan Strait crisis was identified as one of the different political interest groups in Taiwan two major crises between China and the United interacting with each other in the process of States. However, China’s decision to conduct democratization. However, it is difficult to missile tests in the international waters close to detect strong correlations between this internal Taiwan was a reaction in protest against the U.S. dynamics and the TRA. Congress voting to allow then Taiwan President Lee Teng-hui to visit the United States, the It is unclear whether the TRA has helped reduce first time a top incumbent Taiwan official had the military threat posed by Beijing toward visited the United States since the termination Taipei, particularly with regard to the latter’s of the formal relationship between the United potential move to independence. There have States and Taiwan. In reaction to the PRC’s been surveys conducted in Taiwan that ask missile tests, the United States dispatched questions about whether the Taiwanese prefer aircraft carriers to the international waters independence. A majority replies affirmatively. close to Taiwan. Nonetheless, it was not the When the survey participants are reminded TRA that reduced tension across the Taiwan of the PRC policy toward Taiwan, particularly Strait. On the contrary, cross-Strait tension its resolve to use force if Taiwan declares was not reduced until the Nationalist candidate independence, the majority then replies Ma Ying-jeou was elected Taiwan president in negatively, with a preference for the status quo. 2008. Since then, the tension has been reduced In a likely scenario where the mainland through dialogues across the Taiwan Strait, continues its arms buildup in Fujian across the without any direct American participation. The Strait from Taiwan, U.S. reactions based on the three “direct links” have been achieved after TRA might only add oil to fire by increasing President Ma’s administration adopted “three arms sales to Taipei. Invoking the TRA could nos”—no reunification, no independence, and lead to opposite results instead of reducing no war. tension. The late U.S. Ambassador James R. In recent remarks at the Wilson Center, scholar Lilley once observed that, between Beijing and and former U.S. government official Richard Taipei, moving U.S. policy closer to either side C. Bush recognized that “whether Taipei is would invite complaints and pressures on the willing to negotiate with Beijing is a function U.S. government to offer compromises to the of its confidence that those negotiations won’t other side. Such policy oscillation does not help hurt Taiwan’s fundamental interests.” There achieve America’s national interests; neither is a weak correlation at best between U.S. does it help reduce tension across the Taiwan arms sales promised by the TRA and Taipei’s Strait—quite the contrary, in fact. willingness to negotiate with Beijing. It is important to note that both sides of the Indeed, cross-Strait relations have gone from Taiwan Strait, for the time being at any rate, trust-building to trust-breaking, from tension might prefer the status quo. With no change built up as a result of Lee Teng-hui’s call for to the political status of Taiwan, the two sides

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continue to build economic and commercial ties the three “direct links,” and nearly three million with each other. This is clearly shown in Ma mainland Chinese traveled to Taiwan last year—a Ying-jeou’s “three nos.” huge influx for an island whose population is about 23 million. Beijing and Taipei signed Beijing does not accept the first “no”—no a landmark trade agreement, the Economic reunification—but the second and third “nos”— Cooperation Framework Agreement, in 2010. no independence and no war—have provided Cross-Strait trade nearly doubled in the last the basis for the recent return to the “1992 six years, reaching $197 billion last year. In consensus” across the Strait. Cross-Strait February 2014, the two sides held their first relations have recently warmed up and achieved official, government-to-government meetings a level of stability. It is unclear how and whether since their civil war ended in 1949. In the words the TRA is relevant in this development. It would of Wang Yu-chi, head of Taiwan’s Mainland Affairs be difficult to make a convincing argument that Council, “it was hard to imagine that cross-Strait either the TRA or increased arms sales to Taiwan relations could get to this point.” have led either Beijing or Taipei to compromise with the other. In this respect, it is important to Given all these profound changes in the past be reminded that the TRA was more concerned 35 years, it seems the following points warrant with potential military conflicts between the serious consideration for anyone interested mainland and Taiwan than with promoting a in the TRA, which was originally passed to warm relationship between the two. defend Taiwan from the threat of an invasion by mainland China: There is a perceptible doubt that the United States would sacrifice its national interests to • Recognition of the U.S. interest in protect those of Taiwan, especially as China maintaining stable and constructive will likely offer a continually growing economy relationships with both Taipei and Beijing. in the next few decades, possibly becoming It is important to note that Beijing opposes the world’s largest single market. The biggest the TRA in general and U.S. arms sales contribution of the TRA might be its role in to Taiwan in particular. The TRA was creating strategic ambiguity in Washington’s concerned more with potential war across China policy. That has helped restrain all sides, the Strait than with creating constructive including the United States, from moving too far relationships with both Taipei and Beijing at away from the equilibrium that all sides desire, the same time. based on their respective national interests. • Comprehensive review of the TRA for its BUILDING FOR THE NEXT 35 YEARS possible contributions to U.S. interests in East Asia in the next 35 years. As the world In the past 35 years, the world has changed has changed so much since the inception much—the Cold War ended more than two of the TRA 35 years ago, a comprehensive decades ago. China has changed much—the review of the legislation is needed to Chinese economy has expanded 18 times provide guidance for U.S. policy toward both its size in 1979, and is expected to become Taiwan and China. These two policies have the world’s largest economy within the next become more inherently interconnected. 35 years. U.S.-China relations have changed Such a comprehensive review should much—China is now the third largest destination address such questions as what the of U.S. exports, following Canada and Mexico. TRA can deliver in the new geopolitical The relationship between mainland China and environment, and whether it can achieve Taiwan has also changed much—both enjoy its stated goals without complicating U.S.

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foreign policy priorities or overall U.S. political pressure on both parties rather interests in East Asia. than arms sales to one of the two parties needs to be applied to help them resolve • Comprehensive review and cost-benefit their differences peacefully. Economic analysis of potential unintended or development and closer economic ties undesirable side effects that continuation of across the Taiwan Strait have already the TRA could bring to U.S.-China relations. generated political pressures on both Starting from day one, the PRC has viewed sides to work together peacefully. U.S. the TRA as an obstacle in normalization support for their economic development of its relationship with the United States. and cooperation would not only intensify As the Chinese mainland and Taiwan have these political pressures, but also ultimately developed closer economic and social ties, benefit the United States strategically and the question has become how to make economically. the TRA relevant to the new relationship between Taipei and Beijing, and particularly In sum, it is in America’s interest to maintain a how to help promote a peaceful resolution stable and constructive relationship with both of cross-Strait tensions, as so desired Taipei and Beijing. It is also in America’s interest by U.S. national interests. The PRC and to promote peace and economic cooperation Taiwan brought their political relationship in the region. A comprehensive review of the to a new stage earlier this year with their TRA can lead to a better understanding of the first official meetings since 1949. Although best ways to pursue American interests in the further development of this new political changing relationships among Washington, relationship depends on various political Taipei, and Beijing. At its 35th anniversary, the parties as well as future administrations in Taiwan Relations Act deserves a comprehensive Taiwan, a comprehensive review of the TRA review. should help to stabilize the political progress already achieved, which ultimately will Xiaobo Hu is Professor of Political Science benefit regional peace and U.S. interests in and Director of the Center for China Studies the region. at Clemson University. He has been National Fellow at the Hoover Institution at Stanford • Comprehensive review of the strategic University, Public Policy Scholar at the Woodrow ambiguity in U.S. foreign policy toward Wilson International Center for Scholars, and Beijing and Taipei. Specifically, Washington Senior Fellow at the Shanghai Institute for should consider whether such strategic International Studies and at the East Asian ambiguity will continue to help restrain all Institute at the National University of Singapore. parties from being too aggressive, and how His publications include Transition towards credible such ambiguity will be in the new Post-Deng China, China after Jiang, Problems in dynamic relationship among Washington, China’s Transitional Economy, and Interpreting Beijing, and Taipei. U.S.-China-Taiwan Relations. Dr. Hu may be • Promotion of peaceful cooperation instead reached by email at [email protected]. of military buildup across the Taiwan Strait. As the TRA does not require the United This policy brief is the fourth in a series on the Taiwan States to intervene militarily in cross-Strait Relations Act. All four briefs in the series can be conflicts, neither will the United States accessed from the Asia Program webpage at http:// sacrifice its national interests by military www.wilsoncenter.org/publication-series/taiwan- involvement there. Accordingly, greater relations-act-time-for-change.

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