Thursday, February 11, 2010

Eurocopter Wins Taiwan Deal As U.S.-China Tensions Rise

Defense News


Eurocopter Wins Taiwan Deal As U.S.-China Tensions Rise


SINGAPORE — Eurocopter has beaten Sikorsky to supply search-and­rescue helicopters to the Taiwan Air Force — the first aerospace sale by a European contractor to the island nation in nearly two decades.

The $111 million contract, which covers the purchase of three EC225 helicopters with options for 17 more, comes as tensions rise between the United States and China over arms sales to Taiwan and as the European Union rekindles its campaign to lift an embargo on weapons exports to Beijing.

Europe has shunned defense deals to Taiwan for fear of angering China, a far more important market for European aerospace and non-offensive defense systems.

That has left the United States as Taiwan’s armorer. In late January, the Obama administration notified Congress of plans to sell $6 billion in arms to Taiwan, including Patriot PAC-3 anti-missile batteries made by Lockheed Martin and Raytheon, UH-60 Black Hawk utility helicopters by Sikorsky and a dozen Harpoon anti-ship training missiles by Boeing.

The proposed U.S. deal has enraged China, which severed military-to-military links with the Pentagon and vowed to retaliate against firms supplying weapons to Taiwan.

“This is obviously a violation of the code of conduct between nations,” Chinese Foreign Minister Yang Jiechi said Feb. 5 in an opening speech to the Munich Security Conference, according to a report by Agence France-Presse. “Of course the Chinese government and the people have to react. It is within its sovereign right to do what is necessary.”

The U.S. Air Force’s top foreign affairs official called the Chinese reaction to the arms sale very disheartening.

“I think China has very legitimate interests in the region,” said Bruce Lemkin, deputy undersecretary of the U.S. Air Force for international affairs during a Feb. 3 interview here.

“That’s why it is so disheartening to see [China’s] reaction to our latest Taiwan arms sale, a very deliberate process that they are well aware of due to our obligations under the Taiwan Relations Act. We have been completely transparent in ensuring we carry out our obligations to see that Taiwan has the appropriate capabilities to provide for their own defense.”

Lemkin applauded Beijing’s efforts to reduce cross-strait tensions, but said that “to cut off dialogue, in my view, is ridiculous.

“If you talk to one another, you can understand one other. That, in and of itself, is a confidence-building measure, so to cut off that dialogue doesn't make any sense.” 

Fitting a Pattern 

One longtime China observer said the reaction follows a long-set pattern.

“Military exchanges between the U.S. and China are always the pawn in the Chinese game, and often, since the U.S. military is the ardent suitor and the PLA is very interested in these exchanges, they are the first line of retaliation by Beijing,” said Larry Wortzel, vice chairman of the U.S.-China Economic and Security Review Commission.

“Of course, Congress has been more skeptical of the value of these exchanges, so I don’t think anyone on the Hill will complain.”

Beijing regards Taiwan as a breakaway province to be reunited by force if necessary, and it has consistently threatened to sanction companies that do business with Taipei.

While pure-play defense contractors like Lockheed and Raytheon have virtually no business in China, Boeing regards the country as one of its most important markets, valued at some $400 billion, and would be hit hard should Beijing levy sanctions. Boeing competes with Airbus as the world’s top maker of commercial airliners.

U.S. contractors maintain they are contractually bound to support their largest customer, the Pentagon, when it strikes government-to-government sales, such as the recent Taiwan deal. 

Lifting the Embargo? 

A week before the arms sale row, European Commission President Jose Manuel Barroso told visiting Japanese Prime Minister Shinzo Abe that the European Union (EU) was working to lift the arms embargo against China, which was imposed following Beijing’s brutal 1989 Tiananmen Square crackdown.

The EU in 2004 sought to lift the embargo, but backed down after the U.S. State Department suggested that it would block efforts by European contractors to sell their wares to the Pentagon.

“At the same time, the Europeans have been skirting their own arms ban on China by permitting the continued transfer of nonlethal equipment sales to the PLA, such as helicopters,” said Richard Bitzinger, senior fellow at the Institute of Defence and Strategic Studies, S. Rajaratnam School of International Studies, based here.

Analysts said the Eurocopter victory also stands to jeopardize Eu­rope’s longstanding commercial ties to China. Eurocopter, based in Marignane, France, operates a helicopter production plant there.

Despite summit meetings, China’s human rights record remains checkered, and European analysts have shifted from arguing for engagement with China to frustration at the lack of progress.

As for lifting the EU’s arms embargo on China, current and former U.S. officials were skeptical.

European officials say that the code of conduct that would replace the embargo is tougher and more effective at controlling the sale of dual-use technology and other gear. But American diplomats say that the arms embargo should only be lifted if China alters the repressive conditions for which the ban was imposed. The human rights situation in China has not improved much since Tiananmen.

They also say there needs to be a way to confirm that the code of conduct is stronger than the embargo it would replace.

In Paris, French Defense Ministry officials were unavailable for comment. 

Show Buzz 

The leading question debated at the 2010 Singapore Air Show here was whether and how China would retaliate, and the significance of Beijing’s severe response to the Taiwan deal.

“The shadow that China is throwing across Asia is huge, and everybody that lives out there feels they have to react to it, and the behavior of the United States has caused some to question our long-term goals a bit,” said one retired senior U.S. military officer.

When President Barack Obama visited Asia last year, he spent about one day in Japan and one day in Singapore, but was in China for three days, a move that some in the region saw as a signal that Washington is more interested in courting China than supporting its longtime allies.

“You’ve got an emerging India, a rising China and a flat Japan, and we have never had that before,” the retired officer said. “I don’t know what China is going to do. I am hopeful and optimistic that this is going to blow over, but it’s all part of China’s continuing crescendo. The worry is that some of the things they have said have been stronger.”

For example, Chinese generals — 

who historically have kept a low profile — appeared on television to make the case against the arms deals to Taiwan.

There are concerns China could orchestrate an incident similar to the 2001 EP-3 surveillance aircraft collision or the harassment of a U.S. naval vessel in the South China Sea, as occurred in early 2009 after the U.S. released a billion-dollar arms deal with Taiwan.

“I think the processes that are in place now are satisfactory. This is something that we all look at,” said Gen. Gary North, commander of all U.S. Air Force assets in the Pacific. “Frankly, in environments where there are political tensions, it provides an opportunity for careful operational overwatch and oversight,” North said. “So as things continue, clearly we have the desire to continue to have the opportunity for liaisons and visits and understanding.”

Senior U.S. officials said they remain committed to fostering a close relationship with China, but made clear they are equally committed to supporting longtime allies.

“Regarding the Chinese reaction, the United States is committed to building a positive, cooperative and comprehensive relationship with China,” said Vice Adm. Jeffrey Wieringa, the director of the U.S. Defense Security Cooperation Agency. “The decision to sell Taiwan defense arms is based on our evaluation of Taiwan’s defense needs, is consistent with the U.S. one-China [policy] based on the three joint communiqués in the Taiwan Rela­tions Act, and contributes to main­tain[ing] security and stability across the Taiwan Strait,” he said. ■ 

John Reed contributed to this report from Singapore, Pierre Tran from Paris.