TEXT: DAS SUSAN SHIRK TESTIMONY ON TAIWAN RELATIONS ACT AT 20
(U.S. as contributor to peaceful resolution, not mediator)

Washington -- The U.S. should not play the role of a mediator between Taiwan and the People's Republic of China (PRC), but instead should be a contributor to an environment in which the two sides can take good ideas and build on them, according to Deputy Assistant Secretary of State Susan Shirk.

In testimony before the House International Relations Subcommittee on Asia and the Pacific April 14, Shirk said that such a role has three elements:

"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," Shirk said.

Shirk's testimony also served as a speech to an April 14 conference on Taiwan sponsored by the American Enterprise Institute and the Heritage Foundation.

Both the testimony and speech marked the 20th anniversary of the Taiwan Relations Act (TRA) which, Shirk said, has preserved U.S. substantive ties with Taiwan and contributed to a stable regional environment in which Taiwan has prospered and cross-Strait ties have grown.

Following is the text of Shirk's testimony, as prepared for delivery:

(begin text)

TESTIMONY OF

SUSAN L. SHIRK
DEPUTY ASSISTANT SECRETARY
EAST ASIAN AND PACIFIC BUREAU
U.S. DEPARTMENT OF STATE

BEFORE THE HOUSE INTERNATIONAL RELATIONS COMMITTEE,
SUBCOMMITTEE ON ASIA AND THE PACIFIC

"THE TAIWAN RELATIONS ACT AT TWENTY"

APRIL 14, 1999

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.-PRC 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 PRC. Six U.S. administrations of both parties have engaged Beijing in order to promote U.S. interests and to encourage a responsible PRC role in the world. The U.S.-PRC 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.-PRC, U.S.-Taiwan, Taiwan-PRC -- 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 PRC.

Cross-Strait Relations

Arguably, while the gains in the U.S.-PRC 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 PRC totaled nearly $23 billion at the end of 1998. The PRC is Taiwan's third largest overall trade partner surpassed only by the U.S. and Japan. Commitments of Taiwan investment in the PRC now exceed $30 billion. With 30,000 individual Taiwan firms having invested in the PRC, 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 PRC. 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 PRC and Taiwan will remain U.S. policy. Our belief is that dialogue between the PRC 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 PRC nor Taiwan would be served by over-emphasis on military hardware while neglecting the art of statesmanship. From the PRC's perspective, it should think twice about whether development or upgrade of any one type of weapons system will contribute to the PRC'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 PRC 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 PRC 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 PRC deployments, the pace and scope of dialogue between the PRC 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 PRC 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 PRC; maintaining stable, consistent, and predictable policies in the region so that both Taiwan and the PRC focus energies on engaging one another directly rather than 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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