AIT Chairman Raymond Burghardt Press Roundtable Taipei, June 4, 2010

OT-1018E | Date: 6/17/2010

TRANSCRIPT

Chairman Burghardt:  Good afternoon.  It's good to be with you all.  Good to see you all again.

As Thomas said, this has been essentially a routine visit.  I come usually, like most Chairmen, about twice a year.  Sometimes when there are elections going on in Taiwan we come a little more often, but it would have been about six months so it was time to come again.  It happened that this visit was immediately after the meeting of the Strategic and Economic Dialogue in Beijing, the U.S.-Chinese Strategic and Economic Dialogue.  So I thought it would also be a useful occasion to brief people here about what happened there, and particularly how it was relevant for Taiwan.

In the meetings here during this visit, I've met so far with President Ma, with Vice President Siew, with Legislative Yuan President Wang Jin-Pyng, with Foreign Minister Yang, with NSC Secretary General Hu Wei-Jen, and with DPP Chairwoman Tsai Ing-Wen.  As I usually do when I'm here, I also had a breakfast meeting with a group of friends who are business leaders here, and also had dinner with a number of think tank and academic people who I have known for years here, particularly ones who are experts on cross-strait relations.

Before we open it for questions, let me just make some public comments on how I think the, what I think was most important about the Taiwan issue during the Strategic and Economic Dialogue.  And all of this comes directly from the notes of Jeff Bader, from our National Security Council, who participated in the meetings and who, along with Kurt Campbell, briefed me in depth last week in Washington as soon as they had returned from Beijing.

The Strategic and Economic Dialogue of course has parts in which all the participants are together, then it splits, and there is a security section and an economic section.  In the security talks, the conversation was very much dominated by the issues of North Korea and Iran, particularly of course North Korea because of the whole incident of the sinking of the Cheonan. In fact, I think both Kurt and Jeff estimated 90 percent of the discussion was really on those two issues.

Then there were a whole bunch of other security issues to discuss.  So Taiwan really got pretty cursory treatment, and it was basically the U.S. responding to some points that were made by the Chinese on Taiwan.  Those were along very familiar lines.  As one of my interlocutors said, "The old Chinese talking points."

It was really kind of, another one of my friends called it a very pro forma sort of exchange.

And on Taiwan, as is familiar, the PRC raised the issue that it was time for the U.S. to end arms sales to Taiwan.  We responded that we believe our arms sales to Taiwan are important for cross-Strait stability.  We said we welcome progress being made in cross-Strait dialogue.  We also said we will maintain our role in supporting peace and security in the Taiwan Strait through continued implementation of the Taiwan Relations Act.

That's about it.  Unlike the last time, I don't have a sort of long prepared statement to make, so why don't we just open it to whatever questions you may have.

Question:  Jane Rickards of the Washington Post and The Economist. 

I noticed in some of the English-language papers that I think it was Legislative Speaker Wang Jin-Pyng was quoted, he was saying that the U.S. is mulling the F-16 sale.  And if this is the case, when do you think there will be an announcement on the sale?

And in a related question, do you think that the focus on North Korea and Iran and the high level summit between China and the U.S. will affect any sales?  Because it sounds from what you're saying that North Korea and Iran are such high priority concerns.  Will that in any way influence the U.S. decisions on arms sales to Taiwan given that you obviously need China's help in this area?  Thanks.

Chairman Burghardt:  We're of course very grateful to LY President Wang Jin-Pyng for performing these press spokesman services on behalf of the American Institute in Taiwan.  [Laughter].  Wang Jin-Pyng is a great friend, but he does love to give these briefings -- not only for me, I notice for other people too.

The issue of F-16 sales to Taiwan is an issue which, what I said then and he actually captured it quite correctly, is pretty much the same thing I said last time I was here.  It's an issue that we're studying.  And there have been no decisions made saying we're not going to sell F-16s to Taiwan, but we're very carefully looking at the air defense needs of Taiwan.  A decision on the sale of F-16Cs and Ds, decisions on upgrading of the As and Bs, all those decisions will be made on the basis of what the needs are.

I wouldn't draw any connection between a decision on arms sales to Taiwan and whether the most recent discussions with Beijing, particularly focused on Iran and North Korea.  Next time it will be on some other issue.  I don't think there's any real serious connection between those issues.

Question:  If I can ask a follow-up question.  You said you're talking about upgrading, you're also examining upgrading Taiwan's existing aircraft.

Chairman Burghardt:  That request was made by Taiwan some time ago, so that is also part of the arms sales issues. There are many others, too, many other weapon systems.  That is also part of what is being considered.

Question:  The aircraft you're looking at upgrading, or the request for upgrading, when were they purchased?

Chairman Burghardt:  Those are the '92 planes.

Question:  I want to ask a follow-up question on the F-16.  I'm sure you're familiar with the U.S.-Taiwan Business Council's recent report saying that the window for purchasing the F-16 jets is almost shot because the last delivery for the jets is set for 2013.  So is it possible that the U.S. would make a decision before that?  Is there a time table for that?  Or when the deliveries are or the production lines close, how to tell --

Chairman Burghardt:  I wouldn't get overly hung up on worrying about when the production line's going to close and the timing.  I mean if we want to do it, we'll find a way to do it.

Question:  Taiwan wants to buy a submarine from the States.  Is it possible that the U.S. would reopen the production line for Taiwan or any program going on in the future?

Chairman Burghardt:  Actually we don't have any production.  We've never had a production line for diesel submarines.  It would be new -- We don't make diesel submarines.  It would be a whole new production line.

Question:  So there is no way we could purchase this product from --

Chairman Burghardt:  I didn't say that.  As I said before, there are a number of arms requests that are being considered.  I can't give you a lot of detailed information about which one is where in the queue, and when a decision is going to be made.  I think you know from past experience that when we make a decision there it is, it comes out.  [Laughter]. 

Question:  Martin Williams from Kyodo News Agency.

I'd like to ask a question about, in recent days the Japanese government changed their air defense identifications on the line or the perimeter for air defense, such that the island of Yonaguni would have a bump around it so that all of the island and the surrounding waters would be included in that zone.  You may recall that this apparently unilateral decision upset the Taiwanese government.  Because this line was apparently originally drawn up by the U.S. government in 1972, does the AIT, does the American government have any position on the way that this situation has been handled by the Japanese and Taiwan governments?  And does the government have a position on Japan's unilateral decision to do this?

Chairman Burghardt:  Of all the questions we imagined someone might ask, that's one we didn't imagine.

I would say, actually I just saw something which indicated that there's some question as to how accurate the report is.  There was one report in one Japanese newspaper on this.  There's some question as to how accurate that report was.  And I don't have anything for you on that.  But I did just see a report from our people in Tokyo sort of questioning whether there was really any basis for that report.

Question:  Shih Hsiu-Chuan from Taipei Times.

I have a question about the security cooperation between Taiwan and the U.S.  In light of recent incidents, a Taiwanese company was found exporting items that can be used in the manufacture of nuclear weapons in Iran.  Do you consider Taiwan a loophole in the international framework against nuclear weapon system?  If you think so, was it because of Taiwan's absences from the Nuclear Non-Proliferation Treaty and the IAEA?

Another question related to this is that the Taiwanese government recently turned down a request for Iran to set up a trade office in Taipei, partly because of the concern from Washington.  Some reports say that AIT was involved in the decision.  Do you have any comment on this?

And then my question is, to my understanding, trade with Iran for items which are not related to nuclear weapons is now covered by international sanctions.  Given this, why is the U.S. government saying it is inappropriate for Taiwan to develop trade with [Iran]?

Chairman Burghardt:  First of all, very good questions.  On the one about the sale or arranging of a sale by Taiwan companies of products to Iran, we have good cooperation and good dialogue and have for many years with Taiwan about proliferation issues.  I think this could involve Iran or could involve North Korea or other countries.  Iran's not the only case.  I remember even going back to the Chen Shui-bian government.  I remember personally being involved in discussions with Taiwan about this issue.

I think between our law enforcement people, between AIT and the government here, I think we've been happy with the cooperation and the fact that Taiwan does follow up carefully in these cases.  They take it seriously.

The fact that once in a while one company might slip through the net and complete a sale or almost complete a sale -- I don't think in any way shows that Taiwan represents some kind of loophole in the worldwide counter-proliferation system.  I think it's a real issue, it's something that requires day in and day out work to keep track of, but it's not something which we view as a major problem.

And something that I think Taiwan deserves a great deal of credit for is the fact that, even though because of its unusual status it's not able to be an official member of things like the NPT or the IAEA, it still takes its responsibilities seriously and it carries out international standard obligations even though it hasn't signed the treaties, or even though it isn't a member of the organization.  I think we could well wish that some official members of some of these organizations were as respectful and as diligent in carrying out the requirements as Taiwan is, frankly.

On the issue of whether or not or why Taiwan did not open a trade office with Iran or allow Iran to open an office here.  That was completely a decision by Taiwan.  It was not a decision that responded to any lobbying or pressure on behalf of the United States, which therefore makes the third question moot.

Question:  TIFA discussions between Taiwan and the U.S. will be held.  Do you have more specific dates? 

A second question is on ECFA.  I'm wondering how the U.S. [inaudible]?

Chairman Burghardt:  On the first issue, the last TIFA talks, meaning the last talks at the deputy ministerial level under the TIFA, the last time they were held was in July 2007 which obviously is too long ago.  We should have another round of talks.  It would be desirable to have that happen sometime before the end of this year.  I can't give you a date.  But I think we, I think both Taiwan and the United States would recognize that it's overdue to have another round of talks at that level.

I'm sorry, the other question was?

Question:  -- going to sign the ECFA with China, and how can the U.S. [inaudible]?

Chairman Burghardt:  The ECFA is a trade agreement, would be a trade agreement between Taiwan and mainland China.  It's something which each side does for its own benefit.  I think we in the United States have always favored actions which improve cross-Strait relations.  I think as far as how it would benefit the United States, I think there are a number of American companies, companies that -- AmCham, the American Chamber of Commerce speaking on behalf of American companies have said they view the agreement as an agreement which could benefit American companies.  We will I think in general for that reason view it as something positive.  We don't have a text to look at.  We don't have a precise listing of what the various provisions will be.

As President Ma said during his meeting with me today, what he said in his public remarks, was that that text will be made available as soon as it can be.  But I would expect from what he has said, and what others have said, that there will be provisions in there related to market opening on both sides and related to protection of intellectual property rights and in terms of investment guarantee protections.  Those are the areas he has mentioned.

There should be things in there that would be useful to American companies and make it easier to use Taiwan as a base of operations.

Question:  Two questions.  The first question is do you think that Taiwan and the U.S. have completely resolved the dispute on U.S. beef? 

The second question is, during your conversation with the President this morning, you mentioned that President Ma's comment on the CNN program was over-analyzed.  Especially when you were asked about your opinion on his comments in Hong Kong.  The thing is, I don't think I asked you that question in Hong Kong, because I asked you about the debate and the FTA and the CNN interview hadn't happened at that time. It was May 12^th.  So maybe you have made a mistake on this.  So --

Chairman Burghardt:  It was Apple Daily that actually asked me.

Question:  Oh.  CNN hadn't interviewed President Ma when I was in Hong Kong.

Chairman Burghardt:  Somebody asked me about it and I did comment on it.  I did make public comments on it.  Maybe it was in Washington.  I did make comments on it which have been carried in the press.

Question:  Anyway, you think that it was over-analyzed, but I really want to know how the U.S. --

Chairman Burghardt:  I know what it was.  It was in Washington.  It was a CNA interview in Washington, D.C.  Too many places, too many meetings.

Question:  I want to know how does the U.S. interpret President Ma's comment once again.

Chairman Burghardt:  Too many questions.  What was the first one?  Beef?

I'm not sure what you mean about dispute being resolved.  The issue obviously is still not resolved.  You all saw the statement by several American senators listing a number of markets including Taiwan and the PRC and Vietnam and Mexico and other places.  There are places which still exclude and are not totally open to American beef -- where it's still partially closed for non-scientific reasons, and they expressed concern over that.  That was the position of the senators.  It would also be the position of the U.S. government.

I would say as a positive statement, I would say that U.S. beef is doing well.  The beef that's coming in is selling well.  Sales are substantially up.  People are obviously buying the bone-in beef as well as the boneless beef.  But the fact that certain beef items are still excluded is something for which there's no rational reason for doing that.

It would be nice to see the market totally open.  In that sense it's not a closed issue, I would say.

In terms of President Ma's remarks, again, I don't think I need to comment on this a third time.  I commented on it in Washington -- It was in Washington, sorry.  It was not in Hong Kong.  It was in Washington.  Too much moving around, as I said.

What I said in Washington was, I stressed that the U.S. views on our commitments to Taiwan had been clear for 30 years under the Taiwan Relations Act.  Then in the comments today I said look, if there's a big crisis, we'll be in immediate contact and we'll be talking to each other.  And decisions on what to do will emerge in the course of that kind of intimate contact and communication.  So I was reading over the whole statement as to what President Ma said in response to the question.  Actually, I do recommend reading the entire comment and what I was responding to.  It was emphasizing that the risk for the United States is the lowest in 60 years, and so forth.  I thought it was sort of over-analyzing because the comments ignored the fact that the key word in what he was talking about was "ask" and it's overly focusing on that word.  I thought it was an academic view of how crises are dealt with in the real world.  That would be my response to that.

Question:  Two questions.  Following up on the ECFA and FTA issue, Taiwan has obviously hoped that by signing ECFA they would be allowed to sign FTAs with other countries, namely the United States.  Would you be keener to do that with Taiwan if ECFA was signed?  Or perhaps has China come out and said please don't?

Chairman Burghardt:   The U.S. position has been the clearest of anybody on this subject.  The U.S. position is all WTO members have the right and the power to sign trade agreements with other WTO members.  Period.  No need for prior ECFA agreements, no need for permission from China, none of that.  WTO members can sign agreements with other WTO members.  Very simple.

Question:  So would you do it?

Chairman Burghardt:  I don't see the signing of the ECFA agreement as being an important factor in whether or not the U.S. specifically would negotiate an FTA with Taiwan. 

For the U.S., I think there are two issues that we would need to deal with.  Both of them are pretty well known and pretty obvious.  The first is, look, in terms of trade agreements, we have three trade agreements that were negotiated already with Colombia, Panama and South Korea which the U.S. executive branch has not even submitted yet to the U.S. Congress for ratification.  There is obviously not much mood in Washington, particularly in the Congress, for negotiating new trade agreements.

The executive branch does not have trade negotiating authority.  That must be granted by Congress in order to make it worthwhile to try to negotiate a trade agreement.  So there's all that major sort of obstacle, which makes the whole issue kind of academic, frankly.

The second point, and this is what I said in Hong Kong -- now I'm getting my interviews straight -- was about the FTA.  The second point is that the kind of trade agreements the United States negotiates are very different than the trade agreements that we commonly see negotiated among countries in Asia.  U.S. trade agreements are very complete agreements, ones which involve very substantial liberalization by all the parties to the agreement.  And there is no support in the U.S. executive branch or in the Congress for the kinds of sort of weak trade agreements or very partial trade agreements which are so popular in Asia.

That's why I was saying it probably would be much easier for Taiwan to negotiate a trade agreement with another Asian country than with the United States, because there will be less market opening demand from Asian countries than there would be from the United States.

The other point I would make is there would have to be a great deal of certainty in the United States that Taiwan was really prepared for the kind of major across-the-board market opening that would make it worthwhile to negotiate an agreement.  That would include not just the executive branch in Taiwan, the Executive Yuan, but that also we'd have to be reasonably sure that the legislature here would actually ratify such an agreement.

Question:  Do you think the beef problem will have any impact, any relation between Taiwan and the U.S. government?

Chairman Burghardt:  We have a very rich trade relationship with Taiwan.  I just checked the figures.  It goes up and down.  The latest figure is it's the 9^th largest trading partner of the United States in the world.  It's the 6^th largest market for agricultural goods.  It's number two per capita in purchase of U.S. agricultural products.  That's a figure that's been true for many, many years.  I remember saying when I was director here ten years ago that we want to thank the Taiwan people for being, after Canada, the people who eat, drink, wear and smoke more U.S. agricultural products than anyone else in the world per capita.  So it's a great market and we have a great trade relationship, a great economic relationship, and a great overall relationship.

Countries with broad and varied and deep relationships sometimes have issues.  Even economic entities have issues between them.  So I think that's, the fact that there are still lingering problems from the beef issue is not something that affects the overall ties.

Question:  CNA says a group of senators is visiting Taiwan and they say it's the first time in the Ma Ying-Jeou era.  Can you confirm this news?

Chairman Burghardt:  It is true that there have not been any visits by U.S. Senators during the Ma Ying-Jeou government, in fact this goes further back than that.  January 2008 was the last visit by a U.S. Senator to Taiwan.  Senators Feinstein, Udall and Hagen -- Feinstein from California, Udall from Colorado and Hagen from North Carolina -- will make a short unofficial visit.  That's the extent of what I've been authorized to say.

Question:  I remember in your previous conference, you actually told everybody here Washington was studying the possibility to grant Taiwan F-16s or to approve F-16 procurement.  So could you give us some ideas on what takes Washington so long to study or evaluate F-16 procurement?  Thank you.

Chairman Burghardt:  It's a big decision. There is a very serious study of Taiwan's, specifically of Taiwan's air power needs.  And again, I would remind you of the whole history of this whole issue of arms sales.  People get very impatient, they say you're never going to do it, when is it going to happen?  Then boom, $6.5 billion.  Then they get all impatient again, and then boom, another $6.5 billion.  So think back on the history.  I'm not predicting anything.  I've been with this issue for so many years, and people always think no, nothing's going to happen, then boom, there's a sale.  So remember the history.

Question:  I have two questions.  The first one is Taiwan is expected to try to sign Free Trade Agreements with other countries once the ECFA is signed.  What country do you think might be first?  You're obviously watching this very carefully.  Would that be Singapore?  Because many analysts have said to me it's likely to be Singapore, so I'm just wondering if you have a sense of that.

My second question is in your meeting with Ma Ying-Jeou, did he give you any sense of the date when the ECFA might be signed?  And did he express any worries about it?  What was his mood about the ECFA?

Chairman Burghardt:  On the first one, I may be an analyst as an avocation, but I think it's not really appropriate for me to predict which country Taiwan might first sign a Free Trade Agreement with.  I'll just leave it at that.

As far as on the ECFA, I didn't detect any sort of change in President Ma's thinking in terms of the timetable from what he's been saying publicly.  Something is expected sometime in the near future.  Not only from him, but I had a more detailed talk about ECFA issues with Vice President Siew.  It's clear that there are still ongoing negotiations over some of the items, and they don't seem to have been, they're not finished yet.  But I didn't get any sense that the Taiwan side felt they were sort of bogged down in any way.

Question:  The Congressional Research Service was reported as coming out with a very interesting criticism of Taiwan's government in the last few days, to which its reaction to the sinking of the ship off the coast of South Korea was too much like that of China -- in the sense that it was not aggressive enough and did not sufficiently resemble the responses of, for example, Japan and the United States and South Korea itself.

My question is, because the Korean Peninsula is a very, very important issue to the United States, and because Taiwan plays such an important role in Asian security in the U.S.'s long term thinking?  Does the AIT share that criticism?  And whether it does or not, what is the appropriate course of action for Taiwan's government on trying to get a resolution of the South Korean/North Korean issue?  Thank you.

Chairman Burghardt:  I haven't done a textual analysis of all of the statements Taiwan's made or not made about the Cheonan incident or about North Korea.  I saw that statement by Shirley Kan.  She's often quite critical of the Ma government.  I thought I saw some statements that the Taiwan government had made which clearly lined themselves up with the position of South Korea and Japan.  I think I could probably dig those out if I had to, but I do recall seeing such statements.  So I don't think this was an issue of grave concern to the United States.

The second question is an interesting question which I guess just sort of underlines the fact that for Taiwan dealing with these kinds of issues presents a special problem because of its situation.  Taiwan's not a member of the United Nations. It's not a member of a number of other organizations.  So it obviously has serious concerns and a need to follow carefully these kinds of regional crises and issues, and it can affect Taiwan.  But Taiwan's ability to be involved in the way the international community deals with the issues is constrained by its unique status.  That is simply the reality that Taiwan has always had to live with.

Question:  On the F-16 issue again, you just mentioned it's a very big decision.  Can you elaborate on why?  You also mentioned evaluating Taiwan's air needs as a whole.  If the F-16s don't work out for whatever reason, is there something else you can consider?

Chairman Burghardt:  On the second part, I'll leave it to the Air Force experts to talk about what Taiwan's various options and so forth should be.  But it's a big decision because it's going to be, it's one of the most important arms systems that they have requested.  Maybe the most significant one that they have on the table at this moment.  It's going to involve a lot of money.  It would be a major piece in any long-term defense plans for Taiwan.  Therefore it's a big decision.  And of course there will be a reaction from Beijing, too.  Beijing has already said that, they've publicly identified the F-16 as a particularly serious issue.

Question:  I just want to follow up, Senator Feinstein.  This time does it mean anything significant at this time, or just a normal visit?  Any progress between Taiwan and U.S. relationship?

Chairman Burghardt:  Three United States Senators want to come.  We're in the over-analysis trap again here.  I think maybe it shows that your [TECRO] office in Washington is doing a terrific job of getting U.S. Senators interested in coming to Taiwan.  I honestly think that's part of the answer.  Seriously.  I see them in action.  I spend a lot of time in Washington, and I think that your [TECRO] office actually has very systematically cultivated excellent relations with people in the Congress and I think that probably is one of the reasons why they've interested this group of Senators in coming.

Question:  I have a question about Taiwan's revised Personal Data Protection Act.  The act will affect all companies where the U.S. is concerned and all people in Taiwan.  I'm wondering, do you see it as a kind of improvement here in Taiwan to make it a more ideal [inaudible] environment?

Chairman Burghardt:  It's not a subject that I'm well briefed on.  But it sounds like it.  [Laughter].  I probably shouldn't comment because I don't really know anything about the subject, but I do see Taiwan doing a lot of smart things to make itself a more attractive investment location.

Thank you very much.