Remarks by AIT Director William A. Stanton at Straits Exchange Foundation 20th Anniversary Symposium March 8, 2011

OT-1103E | Date: 3/08/2011

Straits Exchange Foundation Chairman Chiang, Deputy Chairman Kao, Presidential Advisor Su Chi, distinguished guests, colleagues, and friends, ladies and gentlemen, good morning. It is my pleasure and honor to join you today to celebrate the 20th anniversary of the establishment of the Straits Exchange Foundation.

At today's symposium marking this milestone, there will be much expert reflection on the past 20 years of cross-Strait relations. We will hear from distinguished policy makers and scholars about the opportunities China and Taiwan have seized and the challenges they have overcome. We will also hear informed speculation on what lies ahead.

I am by no means an expert on this complex subject, but I am an interested party, and I have spent a major part of my 32-year diplomatic career living in, or working on, mainland China and Taiwan.

From that perspective, I can share with you some of my own modest observations on cross-Strait relations in the past, present, and future. I would also like to take this opportunity to reaffirm the support of the United States for a peaceful resolution of cross-Strait differences. We especially have welcomed the progress of the past three years and we will continue to support increased cross-Strait dialogue that reduces tensions and promotes stability and prosperity.

A Success Story

My first visit to Taiwan in the mid-1980s predated the establishment of the Straits Exchange Foundation by about five years.

At that time, official contact across the Taiwan Strait was limited and irregular, and interpersonal exchanges had just begun. Few people, and certainly not I, could have predicted the achievements reached in the following two decades.

At that time, I would have laughed if someone had told me as many as two million mainland Chinese tourists would visit Taiwan in a single year, as we expect in 2011. Taiwan business people investing in the mainland -- are you kidding? Truly, the evolution of the relationship between China and Taiwan has been remarkable.

For 38 years, relations between China and Taiwan were characterized by conflict, confrontation and -- mostly -- isolation. Then, in 1987, several months after I left Taiwan, early ties began to sprout when travel to the mainland was permitted for the first time.
It was not until four years later, however, following many secret meetings and the gradual establishing of mutual trust, that cross-Strait engagement finally had a strong foundation for growth with the formation of the Mainland Affairs Council and the Straits Exchange Foundation.

Today, two decades later, cross-Strait relations have improved so rapidly and so smoothly that expectations have truly shifted. Especially in the past three years, we have become so accustomed to continuous progress that some commentators were alarmed when negotiations appeared to be slowing and an important investment agreement was not signed as expected in December.

To keep the cross-Strait relationship in perspective, let's briefly review the positive developments achieved since 2008. The Straits Exchange Foundation and its mainland counterpart -- the Association for Relations Across the Taiwan Strait -- have signed 15 agreements on everything from food safety and medical cooperation to transportation and intellectual property rights.

Of particular note of course, is the Economic Cooperation Framework Agreement, the most significant cross-Strait accord to date, which took effect this year. ECFA is expected to generate wealth and employment for people on both sides of the Strait. It will no doubt go very far in further integrating the two economies.

I personally believe, however, an often overlooked but also extremely important outcome of these agreements is the opportunity created for increased people-to-people exchanges and interactions between Taiwan and China.

Let's take as an example the 365 direct commercial flights that carry passengers between China and Taiwan every week as a result of SEF's negotiations. Those flights now bring four thousand mainland tourists to Taiwan each day. They also ferry back and forth the one million or so Taiwan business people who make China their home.

Your foundation's work also helped pave the way for the approximately 5,000 mainland students now enrolled in Taiwan universities. That number is expected to take a dramatic jump next September as mainland students start enrolling in full degree programs at Taiwan's excellent schools.

Suddenly, we have a situation in which millions of people can observe one another's societies. Here, I believe, Taiwan's "soft power" will emerge as a powerful force. Taiwan is living proof that Chinese culture and traditional Chinese values are enhanced, rather than undermined, by a vibrant democracy and a free press.

I suspect a good number of mainland visitors understand this already. How could they not? After all, they see your TV talk shows in which commentators keep Taiwan's leaders on their toes, gleefully and sometimes angrily skewering President Ma one day and DPP Chairwoman Tsai the next. They see a peaceful, prosperous, and orderly society that requires no heavy police presence.

They see a government that offers its citizens first-class, universal healthcare and education services. They see election campaigns that give citizens a true voice in their future.
So, despite the long, difficult history of cross-Strait relations, let's not take for granted all that has been accomplished through the hard work of the Straits Exchange Foundation. And as we reflect today on past achievements, let us also look forward to even greater contributions in the coming years.

The U.S. Role

Now, some observers believe the United States is uncomfortable with improved cross-Strait ties, that we feel threatened, or nervous, or left out. Let me tell you categorically that this is not the case.

First, we are not nervous about improving cross-Strait ties because Taiwan is a vibrant, thriving democracy whose citizens embrace the privilege and responsibility of participatory government.

The people of Taiwan exercise their democratic duties in impressive numbers: three out of four voters took part in Taiwan's last presidential election, a higher turnout than we have in the United States. They are not going to give up this cherished right.

Here in Taiwan, free and fair elections provide a mechanism for ensuring that the administration's policy -- particularly on critical issues such as cross-Strait ties -- remains in line with the will of the people. It is that will of the people that we have consistently maintained must be the basis of cross-Strait developments.

As former President Clinton said when he visited Taipei in November, the ECFA "looks like a good thing," but "if it turns bad, you can always do something else." That is Taiwan's prerogative.

Second, we are not nervous about improving cross-Strait ties because a stable and secure relationship between Taiwan and China is demonstrably good for both sides, it is good for the region, and it is good for the United States. In a world beset by uncertainty, upheaval and potential flashpoints -- just look at the headlines from the Middle East and the Korean peninsula -- a peaceful and stable Taiwan Strait is, frankly speaking, a godsend.

I firmly believe the United States has played an important, if indirect, role in bringing about this turn of events in the Taiwan Strait.

American friendship, trade, and a clear policy of support, applied consistently over the decades, not only offered Taiwan a secure environment for its political and economic transformation, but also afforded Taiwan a position of strength and confidence from which to engage with China and to greatly reduce historical tension.

Let me just briefly review some of our more noteworthy milestones. Our bilateral trade has continued to expand, and Taiwan is now our 9th largest trading partner in the world.

The United States is the largest foreign investor in Taiwan, with cumulative direct investments of more than $21 billion. Taiwan is also America's fifth largest source of foreign university students.

And we continue to pursue other important areas of cooperation, including scientific and technological cooperation in a range of fields, such as health, the environment, nonproliferation, and energy.

We are committed to making further progress on such issues as visa waiver, export controls, and the sale of defensive weapons.

Nonetheless, it is important that we do even more to strengthen our bilateral ties. Doing so serves not only our mutual interests, but also helps to ensure further cross-Strait progress.

This is the thinking behind our shared view that, as President Ma has said, it is important for Taiwan to improve its trading relations not just with China, but with the United States and other partners as well. We could not agree more.

Taiwan and the United States indeed have lots of room to expand our economic ties. We hope to be able to work together with Taiwan to get the trade relationship back on track, and in particular, I should add, to manage better our beef trade issues.

As trade barriers fall, we can expect more U.S. companies to invest in Taiwan to access local and regional markets, including China. Indeed, President Ma has invited U.S. and other foreign firms to come to Taiwan to take advantage of its position as a launching pad for the mainland market. Our companies have responded, with Hewlett Packard, for example, investing in an R&D center in Nankang.

Regional Implications

Of course, any good investor knows the importance of a diversified portfolio, and that's particularly true when it comes to trade and investment. Trade with China already accounts for nearly one-third of Taiwan's total trade. The talented people who negotiated these cross-Strait agreements know that all of Taiwan's eggs should not be kept in one basket.

It is therefore natural and to be expected that Taiwan would already be taking steps to foster deeper relationships with other economies, including possible trade and investment agreements with Singapore and Japan.

The United States welcomes increased economic integration and lower barriers to trade throughout the world as a proven means to enhance growth and prosperity. Open, fair trading environments are good for business and good for the global economy.

That is one reason why President Obama has made engagement in Asia a U.S. priority since the day he took office, because we know that this continent will continue to see historic, transformative growth throughout the 21st century.

Many Asian cities have become global centers of commerce and culture, creating the next generation of regional and global leaders in business, science, technology, politics, and the arts.
Taiwan should play a larger role in this regional and global integration. You should become more engaged in a broad range of international issues ranging from civil aviation to health and the environment. Taiwan has shown time and again that, when granted the opportunity, it can significantly contribute to the international community.

Taiwan is already a contributor on global health issues due to its participation for the last two years as an observer in the World Health Assembly, the ruling body of the World Health Organization (WHO). Taiwan is already a member and full participant in key economic bodies such as the Asian Development Bank, APEC, and the World Trade Organization, where Taiwan has been a consistent advocate for trade liberalization.

The United States strongly supports Taiwan's meaningful participation in all other appropriate international organizations where its expertise can benefit the global community.

We believe much more could be done, however, and we call upon all parties to work together to broaden Taiwan's participation.

I believe that the mutual trust created by the continued interaction between the Straits Exchange Foundation and the Association for Relations Across the Taiwan Strait creates an environment conducive to Taiwan's expanded participation in the international community.
Such international participation in turn gives Taiwan the confidence to engage productively with mainland China at a pace and scope that is politically supportable by the people of Taiwan.

Increased mutual trust is in fact perhaps the most important outcome of the improvements in cross-Strait relations in recent years.

But more needs to be done to stay on course. As Dr. Su Chi said last May at Stanford University in commenting on cross-Strait relations, "We have gone from being enemies to being good neighbors with China." Eventually, he said, maybe we can be good friends, but Beijing has to show Taipei that they are trustworthy also.

For our part, the United States' position remains clear and unchanged. We are fully committed to our policy, based on the three U.S.-China Joint Communiqués and the Taiwan Relations Act, and we will continue to act predictably and consistently when it comes to our relationships with Taiwan and China.

The United States has played and will continue to play an important, indirect role in cross-Strait relations. A strong friend of Taiwan, the United States will continue to support Taiwan's security, democracy, and development even as we will continue to support improved cross-Strait relations.

The U.S.-Taiwan relationship, including our deep cultural, economic, and historical ties, represents one of the great success stories for U.S. engagement in Asia.

Taiwan's own democratic and economic transformations have benefited the United States greatly, and we have achieved much through common understanding and effort, through shared energy and enthusiasm.
In January, President Obama said he "welcomed the progress that's been made on both sides of the Taiwan Strait in reducing tensions and building economic ties," noting that it was "in the interest of both sides, the region, and the United States."

To the President's support and praise, please allow me to add my own. The establishment of the Straits Exchange Foundation 20 years ago laid a foundation and a process for exchanges, dialogue, and progress across the Taiwan Strait.

In the past three years especially, we have witnessed historic progress that has dramatically increased engagement, decreased tension between China and Taiwan, increased person-to-person interactions, and benefited both sides.

The United States unequivocally supports these positive developments and certainly hopes that more will follow in the future.

Thank you very much, and ...Congratulations, Straits Exchange Foundation!