Mr. Chairman, members of the Committee on Foreign Relations,

I am grateful for your invitation to testify at this hearing on the twentieth anniversary of the Taiwan Relations Act. A long-time specialist in U.S. relations with Taiwan, I co-chaired the Task Force at the State Department which produced the initial draft of the Act, and later represented the Carter Administration in discussions with this Committee on the revisions which resulted in the Act as we know it today. Still later, I served as the American Ambassador to Papua New Guinea, and after that as the Alternate U.S. Representative to the United Nations when Jeane Kirkpatrick was our principal representative there in New York. Having retired from the State Department some years ago, I am now Senior Fellow in The Heritage Foundation's Asian Studies Center.

Mr. Chairman, today we take it as a matter of course that despite the absence of formal diplomatic relations with the Republic of China on Taiwan, nevertheless we can trade, invest, and sell defensive weapons and enriched uranium for nuclear power generation, and that our office in the island republic, the American Institute in Taiwan, though unofficial in name, nevertheless can represent the views of the United States government and can provide ordinary consular services to our and to Taiwan's citizens. But when we shifted diplomatic relations from Taipei to Beijing, none of these things were possible, for under American law, arms can be sold only to friendly governments; sales of enriched uranium fuel for nuclear power reactors, as well as Overseas Private Investment Corporation guarantees and Export-Import Bank loans, are restricted to friendly states; and on January 1, 1979, we ceased recognizing the Republic of China as a state and its government as a government.

At the time we broke relations with Taiwan, there were some 60 treaties and executive agreements covering everything from trade to taxation to air travel. Some supposed authorities had written articles claiming that after the switch in recognition all these treaties and agreements would apply to the People's Republic of China. Others had argued they simply would lapse. Was either view correct?

As it emerged from the TRA draft prepared at the State Department, a totally novel instrument in international life, the American Institute in Taiwan, emerged. It is a private foundation incorporated in the District of Columbia, but funded as a line item in the State Department budget with a Board of Directors appointed by the Secretary of State. It has a direct reporting relationship with both this Committee and the House Committee on International Relations. The Institute is staffed with government employees, usually from State, Defense, the CIA, and the Commerce Department, who are nominally on leave from their agencies, yet their service with AIT counts toward their pensions, and they even can receive promotions from their home agencies while serving on Taiwan with AIT. By the way, I signed the incorporation papers for AIT and paid the incorporation fee.

With regard to arms sales, OPIC guarantees, sale of enriched uranium, Ex-Im loans, and the like, we came up with a simple and elegant fix: "Whenever the laws of the United States refer or relate to foreign countries, nations, states, governments, or similar entities, such terms shall include and such laws shall apply with respect to Taiwan." Period. In similar fashion, the draft bill we sent up said that unless specifically terminated, all treaties and agreements in force on December 31, 1978, will continue in force.

I was very flattered, Mr. Chairman, when, on the occasion of my confirmation by this Committee as Ambassador to Papua New Guinea, you congratulated me on the work we had done.

But the State Department bill in fact did not go far enough, for given the commitments the Carter Administration had made to Beijing, the bill said nothing about the security of Taiwan and its people. So here the Congress took over. Led by Republicans and Democrats working together--in the Senate by Frank Church, Jake Javits, Dick Stone, and of course you yourself, Mr. Chairman, and in the House by Clem Zablocki, Dante Fascell, Ed Derwinski, and Lester Wolff--an entirely new kind of relationship was created, something unique in international affairs and something that has stood the test of time over these past two decades. As it finally emerged, the Taiwan Relations Act in reality became something like a treaty imposed by the Congress through legislative action. Moreover, it is a treaty which has set the terms and limitations by which successive administrations have had to abide in conducting relations with both Beijing and Taiwan.

The security assurances written into law by the TRA are familiar, of course:

"…peace and stability in the area are in the political, security and economic interests of the United States and are matters of international concern [emphasis added]."

"…the United States decision to establish diplomatic relations with the People's Republic of China rests upon the expectation that the future of Taiwan will be determined by peaceful means;"

"…the United States will make available to Taiwan such defense articles and defense services in such quantity as may be necessary to enable Taiwan to maintain a sufficient self-defense capability;"

"…the President is directed to inform the Congress promptly of any threat to the security of the social or economic system of the people on Taiwan;" and most important of all, the United States would consider

"…any effort to determine the future of Taiwan by other than peaceful means, including boycotts or embargoes, a threat to the peace and security of the Western Pacific and of grave concern to the United States."

The words "threat to the peace and security of the Western Pacific" echo the similar language used in Article VII of the United Nations Charter, which deals with international resistance to acts of aggression. Taken together with the statement that peace and stability in the area are international concerns, it directly contests the PRC's assertion that whatever it does or does not do with respect to Taiwan is purely an internal, domestic concern. Although we have learned quite a bit recently about things whispered privately in Beijing by former senior government officials and never disclosed to the public or the Congress, the Taiwan Relations Act and its formulations remain the law of this land. And as far as I am aware, in official documents the United States has never accepted Beijing's contention that Taiwan is anything more than one of its provinces. All we have done is to acknowledge that Beijing claims there is but one China of which Taiwan is a part, while stating no position of our own on the matter.

Obviously, there is a great deal of tension between the clear language of the Taiwan Relations Act and the several communiqués which successive administrations have signed with Beijing, as well as with obiter dicta such as President Clinton's "three noes" statements in Shanghai last June. There is an obvious contradiction between the section of the TRA dealing with arms sales and the August 17, 1982, communiqué language dealing with year-by-year reductions. And of course there was a contradiction between that communiqué and President Bush's decision to authorize the sale of F-16s to Taiwan.

But behind all of this lies an even more deep-seated contradiction, stemming from the fact that President Carter not only accepted the PRC conditions that in order to establish diplomatic relations we must withdraw all U.S. forces from Taiwan and terminate the Mutual Defense Treaty, but also accepted Beijing's demand that we could not have any form of official relationship with Taiwan. Had we refused to accept that third PRC demand, we would have avoided the tortuous exercise we now find ourselves in, having to operate a foreign policy which denies that Taiwan is a nation and its government is a government while both American law and manifest reality make clear that it indeed is both.

This unreality takes its worst form in statements such as President Clinton's three noes: the U.S. will not support Taiwan's entry into international organizations that make statehood a requirement for membership; will not support Taiwan's independence; will not pursue a "two Chinas, or one China, one Taiwan policy." The Administration claimed there was nothing new here, but PRC officials immediately pointed out that Mr. Clinton's statements logically must mean that Taiwan is only a province of China and not a state. After all, they said, if your President says it lacks the qualifications necessary for independence or statehood, and since the U.S. has recognized the PRC as the sole legal government of China, the U.S. necessarily must agree that Taiwan is a province of the PRC.

For contrast, let's look at what the TRA says about Taiwan's status. Not only does it say that for all purposes of American law Taiwan is a state and its government is the government of a friendly state, but it also says that any attempt to use coercive force against Taiwan would be a matter of international as well as American concern. Which means that despite Beijing's recent bluster and threat, as far as the United States is concerned, using force against Taiwan cannot be regarded as a domestic concern of the People's Republic of China.

But there is more. Section 4(d) of the TRA reads: "Nothing in this Act may be construed as a basis for supporting the exclusion or expulsion of Taiwan from continued membership in any international financial institution or any other international organization."

The language is phrased negatively, but the legislative history of the Taiwan Relations Act makes very plain that Congress intended affirmative U.S. support for Taiwan's continued membership in such organizations as the World Bank and the International Monetary Fund. Which necessarily must mean that Congress considered Taiwan fully qualified to belong to the Bank and Fund and other international organizations, despite President Clinton's remarks in Shanghai. In fact, let me point out that Taiwan remained a member of the Bank and the Fund for nine years after being expelled from the General Assembly, and probably would be a member to this day had the United States not stopped supporting its membership. The only bar to its membership is American and other passivity in the face of Beijing's opposition. Ironically, the PRC is the number one borrower from the World Bank. Is there another case in which the borrower gets to specify whose money the lending bank can take?

Mr. Chairman, members of the Committee, I believe that had Taiwan been a democracy in 1978-79, no American President could have accepted the PRC's three conditions and consigned Taiwan to its present weird international limbo. But the Republic of China on Taiwan was not a democracy at that time. It was a one-party, authoritarian state under martial law. That was twenty years ago. In the decades since, Taiwan has peacefully transformed itself into a multi-party democracy. Not only is its parliament fully representative and directly elected, the head of state is also elected directly by the people for the first time in all the millennia of Chinese political practice. There are no political prisoners. The press and other media are free and vigorous. Fiercely contested elections take place almost every year. GDP per capita exceeds $13,000--about 15 times what it is in mainland China. Taiwan's existence as one of only three democracies in East Asia requires a more realistic American policy.

Of course we want to have useful and cooperative relations with the People's Republic of China. And of course we hope the PRC wants to have useful and cooperative relations with us. Which is to say, these matters should be reciprocal, avoiding the present situation in which we are told that to have these useful and cooperative relations, we must take account of and act in accordance with Beijing's sensitivities and needs--including those relating to Taiwan--but somehow Beijing need not take account of American sensitivities and needs--including those relating to Taiwan.

In his excellent book, East and West, former Hong Kong Governor Christopher Patten points out that the Chinese leadership in Beijing "did not require to be led in their negotiations by intellectual titans to know that if they pushed hard enough, the British would give…. The trouble was that because Britain's bottom line was so often abandoned, the Chinese assumed it always would be abandoned." Unfortunately, all too often in its dealings with the PRC, successive American administrations have emulated the British pattern of negotiation.

Mr. Chairman, members of the Committee, if we are to act in accordance with the spirit as well as the letter of the Taiwan Relations Act, I believe we should do the following:

• Return to the former policy of saying we take no position on what the final status of Taiwan should be, because this is a matter for negotiation between the two sides. Reiterate that the U.S. can accept any solution that is arrived at peacefully, without coercion of any kind, so long as it is acceptable to the people of Taiwan. In the absence of such an agreement, the status quo must continue, and continue without threats.

• Even though it is a neuralgic point for the PRC, we should continue to press for a renunciation of the use of force against Taiwan. As stated in the TRA, the U.S. decision "to establish diplomatic relations with the People's Republic of China rests upon the expectation that the future of Taiwan will be determined by peaceful means"; and "any effort to determine the future of Taiwan by other than peaceful means, including by boycotts and embargoes [would be considered] a threat to the peace and security of the Western Pacific and of grave concern to the United States."

• Obey the implicit injunction of the TRA to support Taiwan's membership in the international financial institutions, the World Trade Organization, and other international organizations. Beijing's continuing campaign to squeeze Taiwan utterly out of international life, including the work of purely humanitarian organizations as well as technical bodies in fields such as telecommunications, aviation, marine transport, and the regulation of intellectual property, cannot be defended and should not be accepted. The United States should cease its passivity and support membership in such organizations as a matter of law, as a matter of realism, and as a step which is in the interest of the proper functioning of those organizations themselves.

In short, it is time for the Executive branch to recognize, as the Congress did in writing the TRA, and as it continues to do in resolutions, that Taiwan's existence as a multi-party democracy and a free-market economy--matters which were the fruit of so much work and so many sacrifices by the people of Taiwan--responds to important U.S. interests and must be protected. A policy which takes account only of our interests vis-à-vis the PRC, and fails to take account of our substantial interests in Taiwan's democracy and its future, cannot be considered realistic.

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