Chinese Reactions to Taiwan Arms Sales
Washington to receive the formal U.S. government responses on each item requested. After the formal responses had been issued, Taiwan would then submit a Letter of Request (LOR) for Price and Availability (P&A) data for specific systems, or receive a Letter of Offer and Acceptance (LOA) for systems that had been approved. The remainder of the process is similar today. Upon the U.S. receiving an LOR for P&A data from Taiwan, the service responsible for the requested system – Army, Air Force, or Navy – prepares the LOA response. Before a draft LOA can be forwarded to Taiwan for countersignature, however, the Executive Branch must formally notify Congress of its intent to sell these specific arms to Taiwan. In accordance with Section 36(b) of the Arms Export Control Act (AECA) 7, such a Congressional notification must take place 30 calendar days prior to any sale of major defense equipment valued at US$14 million or more, of defense articles or services valued at US$50 million or more, or of design and construction services valued at US$200 million or more. 8 Items that Taiwan is considered eligible to procure in a given year are included in the annual Javits Report, submitted to Congress by the U.S. Department of State. Nevertheless, Congressional notification under AECA 36(b), necessary before signing the government-to-government Foreign Military Sales (FMS) agreement, is the only point in the arms sales process mandating a public acknowledgement of a pending transfer to Taiwan. 9 Upon Taiwan’s countersigning of the LOA, and upon initial transfer of the funding for the procurement program, the acquisition lead from the appropriate U.S. service determines which U.S. industrial supplier will actually participate in the program and concludes a contract with that supplier – a contract that may or may not be explicitly announced to the public. In the wake of the 1982 Joint Communiqué and anticipating that China’s military posture opposite Taiwan would diminish in the future, the Reagan administration also institutionalized an internal metric for compliance with its new policies. Commonly referred to as the “bucket,” it set quantitative limits on arms sales in mean dollar value. With calculations from 1978 and 1979 serving as the base, the starting point was set at US$680 million in FMS and direct commercial sales, and the idea was to make a gradual reduction of this number each year, projected at US$20 million annually. This structure became untenable, however, and the funding for Taiwan arms sales was eventually split into two parts – one for Significant Military Equipment (SME, meaning defense articles with substantial military utility or capability) under the “bucket” model, and one for non-SME articles such as technology and parts, which was reported separately to Congress. Nevertheless, given that arms sales to Taiwan continued to be announced through the Defense Security Cooperation Agency (DSCA), it must have been obvious to the PRC that the U.S. was not abiding by the agreement to significantly reduce the dollar amount of arms sales to Taiwan.
7
Public Law 90-629, “Arms Export Control Act” Washington, D.C., 90th Congress, October 2, 1968. Grimmett, Richard F., “Arms Sales: Congressional Review Process” Congressional Research Service Report RL3167, January 8, 2010. 9 Kan, Shirley A., “Taiwan: Major U.S. Arms Sales Since 1990” Congressional Research Service Report RL30957, September 15, 2011. 8
8
2012 US-Taiwan Business Council | Project 2049 Institute www.us-taiwan.org | www.project2049.net