07/24/06
DEFENSE NEWS
U.S. Letter Fails To Clarify Taiwan Sub Status
By WENDELL MINNICK
The good news, say Taiwanese officials, is that they have received a response to their request that the U.S. Navy look into a two-part approach to providing diesel submarines to the self-governing island. The bad news, they say, is that the letter is lukewarm and confusing.
A debate about obtaining the eight subs proffered by U.S. President George W. Bush in 2001 was stirred up anew by the June 27 letter from Richard Lawless, U.S. defense deputy undersecretary for Asian and Pacific Affairs, to Lee Jye, Taiwan’s defense minister. The letter was obtained in mid-July by Reuters.
Among the reasons for the less-than-enthusiastic reactions: The letter mentions a 2004 missive sent to “former defense minister Li Chieh.” Chieh is a different transliteration of Jye.
“Chinese are fixated on finding the indirect or subtle messages in the most routine of communications. Will this be taken as a goof, or will another, implied, meaning be assumed and substituted? Seems silly, but this is how it works,” said a U.S. defense official.
More substantively, the U.S. letter notes drawbacks to the Taiwanese suggestion that payment for the subs be split into a $360 million chunk for engineering, program management, design certification, integrated logistics and foreign-military sales fees; and an undetermined amount for construction. Previous estimates have been roughly $8 billion.
Lawless’ letter also dismisses the suggestion, backed by some Taiwanese lawmakers, that the subs would be partly built by Taiwan’s state-owned China Shipbuilding Corps (CSBC).
“I explained that USG [U.S. government] would neither ‘authorize nor create the capacity for Taiwan to manufacture or export submarines,’ nor would USG provide the ‘rights to the basic (submarine) design’ to Taiwan with the submarine purchase,” Lawless wrote.
In a petition to President Chen Shui-bian, 130 out of 225 Taiwan legislators said they would refuse to fund the subs unless Taiwan industry received substantial work.
“The emphasis the letter places on ensuring Taiwan would not gain a submarine manufacturing capability is interesting. The issue here is how one defines manufacturing,” said a Taiwan defense source close to the program. “Is assembly, such as putting together completed sections of the structure, propulsion system, and/or nonpropulsion electronic systems, considered manufacturing?”
The source suggested Taiwan might ask to make sub compo-nents, such as microelectronics, displays, propulsion systems, materials and weapons.
“While Taiwan may still be able to demand [and negotiate] some sort of local assembly of the hull sections at CSBC, the long-term benefits to Taiwan’s shipbuilding or defense industry would inevitably be rather limited, unless the aforementioned restrictions should somehow be lifted,” said Fu S. Mei, director of the Taiwan Security Analysis Center and editor-in-chief of the Taiwan Defense Review.
Taiwanese officials also are concerned the United States would retain the Taipei-funded design.
“What if the U.S. Navy, with some pressure from Congress, decides that U.S. industry has come up with a pretty good design that Taiwan taxpayers have paid for, a design that could be used as the basis for a diesel-electric submarine for the U.S. Navy?” said the Taiwan defense source.
They also want to know what results Taiwan has to show for the annual $2 million it has paid the U.S. government to run a submarine program management office.
“For taxpayers, it doesn’t seem like the dozen or so people in this office have done much in the last couple of years,” said the source.
Pan-Blue opposition, made up of Chinese National Party (KMT) and People’s First Party members, have blocked the legislative budget for the subs for the past two years. The opposition and Green, representing the Democratic Progressive Party, have been engaged in a vicious political battle over the defense budget for submarines. A special sub budget has been blocked 48 times by the legislature since February 2005.
One KMT lawmaker said the letter failed to address several key issues: price, the eight- to 13-year delivery time, the effects of the subs on strategic stability, and reservations in the United States and among potential manufacturers.
“None of these concerns have been allayed by the [Defense Ministry], despite repeated pleas,” Su Chi said. Su said the money should be spent on arms that can be deployed faster against China.
“It’s not just a simplistic Blue versus Green thing, but a very complex, Byzantine environment where factions within the same political coalition or even the same party viciously jockey for influence,” Fu said.
One U.S.-based Taiwan expert said the letter did not rule out the two-phase idea.
“Lawless appears to be trying to meet Taiwan’s concerns and at the same time make perfectly clear the limits of what any deal could be: not to create the capacity for Taiwan to manufacture or export submarines, not to provide the rights to the design, and to get a definite commitment for funding if there is to be any progress on the purchase of subs,” said June Teufel Dreyer, a University of Miami professor.
Dreyer said that Lawless’ letter stresses that Taiwan must bear the extra costs of a two-phase plan.
“Since cost has been an issue to Taiwan all along, this could be construed as a diplomatic way of saying: ‘This is it. Make up your mind or let’s forget about the sub purchase scheme,’” Dreyer said.
