Congressional Research Service, "Taiwan: Major U.S. Arms Sales Since 1990," July 12, 2007

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Summary
This report, updated as warranted, discusses U.S. security assistance to Taiwan, or Republic of China (ROC), including policy issues for Congress and legislation. The Taiwan Relations Act (TRA), P.L. 96-8, has governed U.S. arms sales to Taiwan since 1979, when the United States recognized the People’s Republic of China (PRC) instead of the ROC. Two other relevant parts of the “one China” policy are the August 17, 1982, U.S.-PRC Joint Communique and the “Six Assurances” made to Taiwan. U.S. arms sales to Taiwan have been significant. In addition, the United States has expanded military ties with Taiwan after the PRC’s missile firings in 1995-1996. However, there is no defense treaty or alliance with Taiwan.

At the U.S.-Taiwan arms sales talks on April 24, 2001, President George W. Bush approved for possible sale diesel-electric submarines, P-3 anti-submarine warfare (ASW) aircraft (linked to the submarine sale), four decommissioned U.S. Kidd-class destroyers, and other items. Bush also deferred decisions on Aegis equipped destroyers and other items, while denying other requests. Since then, attention has turned to Taiwan, where the military, civilian officials, and legislators from competing political parties have debated contentious issues about how much to spend on defense and which U.S. weapons systems to acquire, despite the increasing threat (including a missile buildup) from the People’s Liberation Army (PLA), as described in the Pentagon’s reports to Congress on PRC military power. In February 2003, the Administration pointed Taiwan to three priorities for defense: command and control, missile defense, and ASW. Some in the United States have questioned Taiwan’s seriousness about its self-defense, level of defense spending, and protection of secrets. The Pentagon has broadened its focus from Taiwan’s arms purchases to its regular defense budget, readiness for self-defense, and critical infrastructure protection. Blocked by the opposition-controlled Legislative Yuan (LY), the Special Budget (not passed) for submarines, P-3C ASW aircraft, and PAC-3 missile defense systems was cut from $18 billion in 2004 to $9 billion (for submarines only) in 2005. In March 2006, Taiwan’s defense minister requested a 2006 Supplemental Defense Budget (not passed) in part for submarine procurement, P-3Cs, and PAC-2 upgrades (not new PAC-3 missiles). On June 15, 2007, the LY passed Taiwan’s 2007 defense budget and included funds for P-3C planes, PAC-2 upgrades, and F-16C/D fighters. The LY did not commit to buy submarines but funded $6 million for its own study.

Several policy issues are of concern to Congress for legislation, oversight, or other action. One issue concerns the effectiveness of the Administration in applying leverage to improve Taiwan’s self-defense as well as to maintain peace and stability. Another issue is the role of Congress in determining security assistance, defense commitments, or policy reviews. A third issue concerns whether trends in the Taiwan Strait are stabilizing or destabilizing and how the Administration’s management of policy has affected these trends. The fundamental issue is whether the United States would go to war with China and how conflict might be prevented. The 110th Congress is considering legislation to relax restrictions on senior military visits to Taiwan (H.R. 2764). Another issue is whether to approve, deny, or defer Taiwan’s request for F-16C/D fighters (with a frozen budget until October 31 awaiting President Bush’s possible release of U.S. price and availability data).

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