U.S.-Taiwan Relationship:
Overview of Policy Issues

Shirley A. Kan
Specialist in Asian Security Affairs
Wayne M. Morrison
Specialist in Asian Trade and Finance
November 26, 2014
Congressional Research Service
7-5700
www.crs.gov
R41952


U.S.-Taiwan Relationship: Overview of Policy Issues

Summary
This CRS Report, updated through the 113th Congress, provides an overview with analysis of the
major issues in U.S. policy on Taiwan. Taiwan formally calls itself the Republic of China (ROC),
tracing its political lineage to the ROC set up after the revolution in 1911 in China. The ROC
government retreated to Taipei in 1949. The United States recognized the ROC until the end of
1978 and has maintained a non-diplomatic relationship with Taiwan after recognition of the
People’s Republic of China (PRC) in 1979. The State Department claims an “unofficial” U.S.
relationship with Taiwan, despite official contacts that include arms sales. The Taiwan Relations
Act (TRA) of 1979, P.L. 96-8, has governed policy in the absence of a diplomatic relationship or
a defense treaty. Other key statements of policy are the three U.S.-PRC Joint Communiqués of
1972, 1979, and 1982; and the “Six Assurances” of 1982. (CRS Report RL30341, China/Taiwan:
Evolution of the “One China” Policy—Key Statements from Washington, Beijing, and Taipei
.)
For decades, Taiwan has been of significant security, economic, and political interest to the
United States. In 2013, Taiwan was the 12th-largest U.S. trading partner. Taiwan is a major
innovator and producer of information technology (IT) products, many of which are assembled in
the PRC by Taiwan-invested firms there. Ties or tension across the Taiwan Strait affect
international security (with potential U.S. intervention). While the United States does not
diplomatically recognize Taiwan, it is an important autonomous actor. Today, 22 countries have
diplomatic relations with Taiwan as the ROC. Taiwan’s 23 million people enjoy self-governance
with democratic elections. Democracy has offered Taiwan’s people a greater say in their status,
given competing politics about Taiwan’s national identity and priorities. Taiwan held presidential
and legislative elections in January 2012. Belonging to the Kuomintang (KMT), or Nationalist
Party, President Ma Ying-jeou won re-election against the Democratic Progressive Party’s
(DPP’s) candidate. The KMT also has a majority of the seats in the Legislative Yuan (LY).
Since Taiwan and the PRC resumed their quasi-official dialogue in 2008 under President Ma and
cross-strait tension decreased, some have stressed the need to take steps by the United States and
by Taiwan to strengthen cooperation to advance U.S. interests. Another approach has viewed
closer cross-strait engagement as allowing U.S. attention to shift to expand cooperation with a
rising China, which opposes U.S. arms sales to and other dealings with Taiwan. In any case,
Washington and Taipei have put more efforts into their respective relations with Beijing, while
contending that they have pursued positive, parallel U.S.-Taiwan cooperation.
President Ma has sought U.S. support, including for Taiwan’s inclusion in the U.S. strategic
“rebalance” to the Asia-Pacific, international organizations, talks on maritime disputes in the East
and South China Seas, and the Trans-Pacific Partnership (TPP). Other policy issues are whether
and when to approve arms sales, and how to bolster economic cooperation and resolve disputes,
such as through the Trade and Investment Framework Agreement (TIFA) talks (last held in April
2014). The United States has been concerned about Taiwan’s restrictions on U.S. beef and pork,
even as Taiwan has claimed attention to international organizations and standards. Since March
2013, Chairmen Ed Royce and Robert Menendez of the House Foreign Affairs and Senate
Foreign Relations Committees, and other Members, have supported a bilateral investment
agreement (BIA). On September 23, 2014, 29 Members in the House sent a letter to the Secretary
of State, calling for expanding engagement with Taiwan. Legislation in the 113th Congress
includes H.J.Res. 109, H.R. 419, H.R. 772, H.R. 1151 (P.L. 113-17), H.R. 1960, H.R. 3470, H.R.
4435, H.R. 4495, H.Con.Res. 29, H.Con.Res. 46, H.Con.Res. 55, H.Res. 185, H.Res. 494, H.Res.
704, H.Res. 714, S. 12, S. 579, S. 1197, S. 1683, S. 2410, S.J.Res. 31, S.Res. 167, and S.Res. 412.
(See also CRS Report RL30957, Taiwan: Major U.S. Arms Sales Since 1990.)
Congressional Research Service

U.S.-Taiwan Relationship: Overview of Policy Issues

Contents
Overview: Policy Interests and Issues ............................................................................................. 1
Historical Background ............................................................................................................... 3
Bipartisan “One China” Policy .................................................................................................. 4
Democratic Politics ................................................................................................................... 5
Major Developments in Cross-Strait Engagement........................................................................... 6
Resumed Dialogue and Reduced Tension ................................................................................. 6
Cross-Strait Agreements ............................................................................................................ 7
Continuing Challenges .............................................................................................................. 8
Issues in U.S. Policy on Taiwan ..................................................................................................... 14
Overview ................................................................................................................................. 14
International Security .............................................................................................................. 16
“International Space” and Organizations................................................................................. 23
Arms Sales and Other Security Assistance .............................................................................. 25
Visa Waiver Program (VWP) .................................................................................................. 28
Extradition Treaty .................................................................................................................... 29
Human Rights and Rule of Law .............................................................................................. 29
Democratic Elections (KMT and DPP) ................................................................................... 31
Restoring Trust and Resolving Disputes (Beef and Pork) ....................................................... 34
Economic Issues ............................................................................................................................ 36
Taiwan’s Global Trade ............................................................................................................. 37
Cross-Strait Economic Ties ..................................................................................................... 40
U.S.-Taiwan Trade and Investment Flows ............................................................................... 42
Legislation in the 113th Congress ................................................................................................... 49

Figures
Figure 1. Annual Change in Taiwan’s Real GDP and Real Exports of Goods and Services:
2005-2013 ................................................................................................................................... 38
Figure 2. Taiwan’s Trade with China as a Percent of its Total Trade: 2000 and 2013 ................... 41
Figure 3. Taiwan’s Annual Approved Outbound Investment Flows to China: 1991-2013 ............ 42
Figure 4. Comparison of U.S. Exports to China and Taiwan: 2000-2013 ..................................... 43
Figure 5. Comparison of U.S. Imports from China and Taiwan: 2000-2013 ................................. 44
Figure 6. Comparison of U.S. Export Orders Placed with Taiwan Firms and U.S.
Merchandise Imports from Taiwan: 2000-2013 ......................................................................... 45

Tables
Table 1. Taiwan’s Top Five Trading Partners: 2013....................................................................... 38
Table 2. Top Five U.S. Trade Commodities with Taiwan: 2013 .................................................... 46

Congressional Research Service

U.S.-Taiwan Relationship: Overview of Policy Issues

Contacts
Author Contact Information........................................................................................................... 50
Congressional Research Service

U.S.-Taiwan Relationship: Overview of Policy Issues

Overview: Policy Interests and Issues
The purpose and scope of this CRS report is to provide a succinct overview with analysis of the
major issues in the U.S. policy on Taiwan. Taiwan has been of significant security, economic, and
political interest to the United States. While the United States does not diplomatically recognize
Taiwan, it is an important autonomous actor in the world. Today, 22 countries including the
Vatican have diplomatic relations with Taiwan as the Republic of China (ROC).1 In what many
observers consider as a model democracy, Taiwan’s 23 million people enjoy self-governance with
free, multi-party elections. After the presidential election in 2008 that ushered in Taiwan’s second
transfer of power from one party to another, the United States congratulated Taiwan as a “beacon
of democracy.” Taiwan is a major recipient of U.S. arms sales. In 2013, Taiwan was the 12th
largest U.S. trading partner and the 7th largest export market for U.S. agricultural products.
Taiwan ranked in 20th place among top countries sending visitors to travel to the United States.
With active congressional involvement, the United States has played critical roles in Taiwan’s
economic development, political liberalization from an authoritarian dictatorship to a dynamic
democracy, self-defense against the People’s Republic of China’s (PRC’s) military threats, and
preservation of international space. Overall, U.S. policy seeks to support security, political, and
economic interests that involve peace and stability, the status quo in the Taiwan Strait, Taiwan’s
efforts to maintain international space, democracy and human rights in Taiwan, and U.S.
businesses in Taiwan. As a critical concern, the United States has interests in the ties or tension
across the Taiwan Strait, which affect international security (with potential U.S. intervention), the
U.S.-Taiwan relationship, and U.S.-PRC cooperation. The cross-strait relationship has grown
closer since the 1980s. When James Lilley arrived as the U.S. representative in Taipei in 1982, he
was one of the first officials to encourage cross-strait economic ties as the driver in a trend toward
greater peace and security.2 Indeed, closer economic engagement gradually has increased regular
contacts and reduced tension across the Taiwan Strait.
U.S. support for Taiwan has posed challenges to U.S. engagement with the PRC, though
Washington and Beijing have advanced an overall cooperative relationship since the 1970s. As
Washington has engaged with both Taipei and Beijing, long-standing issues for policy have
included how to balance U.S. relations with Taiwan and with the PRC, and also how to balance
maintaining the relationship with Taipei in its own right as opposed to approaching Taiwan as part
of Washington’s relationship with Beijing. For decades, Taipei has harbored fears about whether
Beijing’s cooperation with Washington has occurred at the expense of Taiwan’s interests. U.S.
policy seeks a cooperative relationship with a rising PRC, which opposes U.S. arms sales and
other official dealings with Taiwan as interference in its internal affairs in unifying with Taiwan
as a part of China. In an apparent contradiction, Beijing also seeks its preferred U.S. policies to
influence Taiwan. However, Taiwan considers itself a sovereign country. As Taiwan shifted from
an authoritarian political system, U.S. policy has been mindful of respecting its democracy.
After the Kuomintang (KMT) Party’s Ma Ying-jeou became president in Taiwan in May 2008, he
promptly resumed the dialogue across the Taiwan Strait after its suspension for a decade. The
PRC had accused his predecessor, the Democratic Progressive Party’s (DPP’s) Chen Shui-bian, of

1 Kiribati, Marshall Islands, Nauru, Palau, Solomon Islands, Tuvalu, Belize, the Dominican Republic, El Salvador,
Guatemala, Haiti, Honduras, Nicaragua, Panama, Paraguay, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and
Grenadines, Burkina Faso, Sao Tome and Principe, Swaziland, and Vatican. In 2007, Malawi switched diplomatic
recognition from the ROC to the PRC. On November 14, 2013, Gambia ended its diplomatic recognition of the ROC.
2 James Lilley with Jeffrey Lilley, China Hands (New York: Public Affairs, 2004).
Congressional Research Service
1

U.S.-Taiwan Relationship: Overview of Policy Issues

pushing for de jure independence of Taiwan. The resumption of the cross-strait dialogue resulted
in even closer economic engagement between Taiwan and the PRC as well as a reduction of
tension, which was welcomed by the United States. This situation afforded U.S. policy
opportunities to strengthen the U.S.-Taiwan relationship and/or shift attention to seek greater
cooperation from Beijing. President Ma Ying-jeou has sought U.S. support, including arms sales,
for Taiwan’s stronger position to sustain cross-strait talks. One view has stressed that the United
States and Taiwan needed to strengthen their relationship to pursue U.S. interests. Another
approach has stressed that the new era of cross-strait engagement allowed for improved U.S. ties
with a rising China and that Taiwan has pursued its own interests in engaging with the PRC. In
any case, Washington and Taipei have put more efforts into their respective relations with Beijing,
while contending that they have pursued a parallel, positive U.S.-Taiwan relationship.
On October 4, 2011, the House Foreign Affairs Committee held a hearing on “Why Taiwan
Matters.” Assistant Secretary of State for East Asian and Pacific Affairs Kurt Campbell testified
that the United States sought a strategic “rebalancing” (or “pivot”) of comprehensive priorities to
focus more on the Asia-Pacific region. He stated that “a critical part of that overarching strategy
is building a comprehensive, durable, and unofficial relationship between the United States and
Taiwan.” Campbell stressed that “the bedrock of that relationship is our security relationship.” He
called the TRA one of the most important acts of “legislative leadership” and foreign policy in
U.S. history. He recognized that the TRA stipulates that the United States must maintain the
capacity to resist coercion, maintain peace and stability, and provide necessary defense articles to
Taiwan. He acknowledged that the Administration must “consult actively on Capitol Hill.”
Campbell also reaffirmed that the Six Assurances as well as the TRA and three U.S.-PRC Joint
Communiques form the foundation of U.S. policy on Taiwan.
Overall, some salient issues for policy include the following:
• How might Congress exercise its roles in U.S. policy on Taiwan? How might
Congress ensure momentum in strengthening U.S.-Taiwan cooperation or ties?
• Is the Administration adhering to the TRA in making available defense articles
and defense services to enable Taiwan to maintain a sufficient self-defense
capability? How effectively is the Administration encouraging Taiwan to
strengthen its self-defense, including by increasing the defense budget?
• How effectively is the Administration encouraging Taiwan to support U.S.
interests in peace and prosperity, including in U.S. alliances and the cross-strait
relationship? Is the Administration effectively influencing Taiwan to play a
helpful, stabilizing role in maritime disputes in the East and South China Seas?
• Should the United States also support Taiwan’s observership status (if not
membership) in international organizations, such as the World Health
Organization (WHO), International Civil Aviation Organization (ICAO), and
U.N. Framework Convention on Climate Change (UNFCCC)?
• Should U.S. policy allow or encourage more senior officials from Taiwan to visit
and encourage expanded communication with Taiwan’s president?
• Should policy allow U.S. flag and general military officers to visit Taiwan?
• How should the United States support transparent, fair, and impartial rule of law,
elections, and freedom in Taiwan, while respecting Taiwan’s democracy?
• How can Washington urge Taipei to contribute more in weapons nonproliferation,
counter-piracy, foreign aid, and other areas of international security?
Congressional Research Service
2

U.S.-Taiwan Relationship: Overview of Policy Issues

• What is Taiwan’s role in the U.S. comprehensive strategy for rebalancing
priorities toward the Asia-Pacific (so-called “pivot” to the Pacific)?
• Should there be another Taiwan Policy Review after the last review in 1994?
• Should the United States press Taiwan to notify the cross-strait Economic
Cooperation Framework Agreement (ECFA) of 2010 to the World Trade
Organization (WTO) and pay more attention to benefits for U.S. companies?
• How can U.S. officials induce Taiwan to further reduce its trade and investment
barriers in order to boost bilateral commercial ties?
• With resumption of talks under the1994 U.S.-Taiwan Trade and Investment
Framework Agreement (TIFA) after they were in limbo for years due largely to
Taiwan’s restrictions on U.S. beef, what should be U.S. priorities to deepen
bilateral economic ties? Why hasn’t Taiwan removed restrictions on U.S. pork?
• Should the United States seek to negotiate a free trade agreement (FTA) or
bilateral investment agreement (BIA), and/or support Taiwan’s efforts to join
regional trade negotiations, such as the Trans-Pacific Partnership (TPP)?
• Should Taiwan’s growing economic dependence on the PRC be of concern to
U.S. and Taiwan policy makers, and if so, what is the best way for Taiwan to
further diversify its economic partners?
Historical Background
Taiwan formally calls itself the Republic of China (ROC), tracing its political lineage to the ROC
set up after the revolution in 1911 in China. The ROC does not recognize the PRC founded in
Beijing by the Communist Party of China (CPC) in 1949. The PRC claims that the ROC ceased to
exist in 1949 and that Taiwan is a province of “one China.” (The Qing Empire had incorporated
Taiwan as a full province in 1885-1895, when more settlers moved from China to the island.) The
PRC and ROC do not recognize each other or two Chinas. The ROC refers to the other side of the
strait as the “mainland.” The PRC opposes recognition of the ROC and seeks unification of
Taiwan with the mainland as a part of “one China,” without renouncing the use of force. Taiwan
has stated an intention to set aside the dispute over sovereignty. In any case, since 1949, the ROC
has governed only on Taiwan, and the PRC based in Beijing has ruled mainland China.
Previously called Formosa, Taiwan never has been ruled by the CPC or as a part of the PRC, and
until 1945, had never been ruled by the ROC. In Taiwan after World War II, October 25, 1945, or
“Retrocession Day,” marked the ROC’s claim of “recovering” Formosa from Japan. However,
upon Japan’s surrender, that was the first time that the ROC’s military forces had occupied the
island of Formosa. When the Qing Empire ceded in perpetuity Formosa to Japan under the Treaty
of Shimonoseki of 1895, the ROC was not yet in existence. Moreover, the colony’s people did not
have a say in self-determination of their status or identity. The Kuomintang (KMT), or Nationalist
Party of China, has contended that the ROC claimed Formosa at Japan’s surrender in August
1945, with no country challenging the island’s status. The ROC under KMT forces led by Chiang
Kai-shek retreated to Taiwan in 1949, when the Communist forces led by Mao Zedong took over
mainland China. Taiwan’s people have faced social, ethnic, linguistic, and political issues of
whether to identify with Taiwan or China, with two major groups of local “Taiwanese” and
“Mainlanders” (people who retreated to Taiwan with the KMT forces and their descendants). The
KMT’s imposed authoritarian rule and martial law on Taiwan, including a massacre called the
“228 Incident” of February 28, 1947, exacerbated difficulties between the groups. President Ma
said that over 29,700 victims of the “White Terror” period got compensation by July 2013.
Congressional Research Service
3

U.S.-Taiwan Relationship: Overview of Policy Issues

Bipartisan “One China” Policy
One of the first powers to support reforms and the new republic of progressive leaders in early
20th century China, the United States recognized the ROC from 1913 until the end of 1978.3 The
United States then shifted to recognize the PRC under the U.S. “one China” policy. By the early
1970s, the United States had looked to switch the diplomatic recognition to the PRC based in
Beijing while figuring out a framework to maintain the relationship with Taiwan. As a scholar on
China and member of the National Security Council staff in 1977-1980 wrote,4
Many factors produced the change in U.S. policy toward China and Taiwan in the 1970s,
some tactical, some strategic. The timing of the initial step was unquestionably related to
the Vietnam War and the Sino-Soviet dispute. The second and third steps were facilitated
by and partly a response to the Soviet expansion. But these were transitory
considerations. From a longer-term perspective, America’s China policy of the 1950s and
1960s could not be sustained. It was based on American acknowledgment of an absurd
claim. Taiwan was not, as it asserted, the government of mainland China. At the same
time, China’s position was unrealistic. The People’s Republic was not the government of
Taiwan. In fact, the two governments ruled different parts of Chinese territory, each
asserting that it was the rightful authority for all of China, each denying the legitimacy of
the other.
The United States has its own “one China” policy (vs. the PRC’s “one China” principle) and
position on Taiwan’s status. Not recognizing the PRC’s claim over Taiwan nor Taiwan as a
sovereign state, U.S. policy has considered Taiwan’s status as unsettled. Since a declaration by
President Truman on June 27, 1950, during the Korean War, the United States has supported a
future determination of the island’s status in a peaceful manner. The United States did not state a
stance on the sovereign status of Taiwan in the three U.S.-PRC Joint Communiqués of 1972,
1979, and 1982. The United States simply “acknowledged” the “one China” position of both sides
of the Taiwan Strait. Washington has not promised to end arms sales to Taiwan for its self-
defense, although the Mutual Defense Treaty of 1954 terminated on December 31, 1979. U.S.
policy does not support or oppose Taiwan’s independence; U.S. policy takes a neutral position of
“non-support” for Taiwan’s independence. U.S. policy leaves the Taiwan question to be resolved
by the people on both sides of the strait: a “peaceful resolution,” with the assent of Taiwan’s
people in a democratic manner, and without unilateral changes. In short, U.S. policy focuses on
the process of resolution of the Taiwan question, not any set outcome.
The United States has maintained a non-diplomatic relationship with Taiwan after recognition of
the PRC in 1979. The State Department claims an “unofficial” U.S. relationship with Taiwan,
despite official contacts that include arms sales. Congress passed a law that did not describe the
relationship as official or unofficial. The Taiwan Relations Act (TRA) of April 10, 1979, P.L.
96-8, has governed policy in the absence of a diplomatic relationship or a defense treaty. The
TRA stipulates the expectation that the future of Taiwan “will be determined” by peaceful means.
The TRA specifies that it is policy, inter alia, to consider any non-peaceful means to determine
Taiwan’s future “a threat” to the peace and security of the Western Pacific and of “grave concern”
to the United States; “to provide Taiwan with arms of a defensive character”; and “to maintain the
capacity of the United States to resist any resort to force or other forms of coercion” jeopardizing
the security, or social or economic system of Taiwan’s people. The TRA provides a congressional
role in determining security assistance “necessary to enable Taiwan to maintain a sufficient self-

3 Jonathan Spence, The Search for Modern China (New York: W. W. Norton & Company, 1990).
4 Michel Oksenberg, “Taiwan, Tibet, and Hong Kong in Sino-American Relations,” in Living with China, edited by
Ezra Vogel (New York: W. W. Norton & Company, 1997).
Congressional Research Service
4

U.S.-Taiwan Relationship: Overview of Policy Issues

defense capability.” The TRA set up the American Institute in Taiwan (AIT) to carry out the day-
to-day matters of the relationship in order to sustain U.S. interests after the de-recognition of the
ROC. Since 1979, the TRA has had bipartisan support in guiding policy with a firm foundation
and flexible framework for the maintenance of cooperation with Taiwan.
In addition to the three Joint communiqués and the TRA, there is a fifth key statement that guides
U.S. policy on Taiwan. President Reagan offered “Six Assurances” to Taipei on July 14, 1982,
that in negotiating the third Joint Communiqué with the PRC, the United States: (1) has not
agreed to set a date for ending arms sales to Taiwan; (2) has not agreed to hold prior consultations
with the PRC on arms sales to Taiwan; (3) will not play any mediation role between Taipei and
Beijing; (4) has not agreed to revise the Taiwan Relations Act; (5) has not altered its position
regarding sovereignty over Taiwan; and (6) will not exert pressure on Taiwan to negotiate with
the PRC. (Also see CRS Report RL30341, China/Taiwan: Evolution of the “One China” Policy—
Key Statements from Washington, Beijing, and Taipei
, by Shirley A. Kan.)
Democratic Politics
Since those years when the United States dealt with the KMT authoritarian government in Taipei,
the relationship has grown both more robust and more complex with Taiwan’s democratization
and shared values about freedom. The United States supported Taiwan’s political liberalization
from an authoritarian dictatorship to a dynamic democracy. Democratization and electoral politics
have allowed the people a greater say in Taiwan’s identity (as part of China or a separate entity).
In 1986, the KMT did not crack down against the formation of Taiwan’s second major party, the
Democratic Progressive Party (DPP), which has leaned toward Taiwan’s independence. The KMT
then lifted Martial Law in 1987. In 1999, the DPP passed a Resolution on Taiwan’s Future. It
declared, inter alia, that after the elections for the national legislature in 1992, direct presidential
election in 1996, and constitutional reform to abolish the provincial government, Taiwan became
a democratic and independent country. The Resolution stated that Taiwan is not a part of the PRC
and that Taiwan’s formal national title is “Republic of China.” This situation is the “status quo.”
At times, the PRC has reacted unfavorably to Taiwan’s democratic politics and implications for
sovereignty, particularly since its first democratic, direct presidential election in March 1996. The
PRC’s People’s Liberation Army (PLA) “test-fired” missiles into sea areas close to Taiwan, which
provoked the Taiwan Strait Crisis of 1995-1996. President Clinton deployed two aircraft carrier
battle groups near Taiwan in March 1996. The PRC threatened Taiwan after President Lee Teng-
hui characterized the cross-strait relationship as “special state-to-state ties” on July 9, 1999. On
March 18, 2000, Chen Shui-bian of the DPP won the presidential election. Chen’s DPP
administration brought Taiwan’s first democratic transfer of power from one party to another,
after 55 years of KMT rule. In recognition of Taiwan’s democracy, President Clinton declared in
2000 another condition that the resolution of the Taiwan question must be peaceful as well as
with the “assent” of Taiwan’s people. In 2003, President Bush expressed “opposition” to any
unilateral decision to change the “status quo.” On the TRA’s 25th anniversary, Representative
James Leach said at a hearing of the House International Relations Committee on April 21, 2004,
that Taiwan has the unique situation in which it can have de facto self-determination only if it
does not attempt to be recognized with de jure sovereignty. He urged Taiwan’s people to
recognize that they have greater security in “political ambiguity.”
Cross-strait tension rose again when the PRC accused President Chen (2000-2008) of promoting
Taiwan’s de jure independence (e.g., with a referendum on Taiwan’s membership in the U.N.
during the presidential election on March 22, 2008). While opposing such referendums, President
Bush positioned two aircraft carriers near Taiwan, as the largely symbolic referendums were still
targets of the PRC’s belligerent condemnation. The referendums failed to be valid. The victory of
Congressional Research Service
5

U.S.-Taiwan Relationship: Overview of Policy Issues

the KMT’s Ma Ying-jeou ushered in Taiwan’s second democratic transfer of power from one
party to another. Bush congratulated Taiwan as a “beacon of democracy.” Some have stressed
Taiwan as a model democracy in a Chinese cultural context. (Also see CRS Report RL34441,
Security Implications of Taiwan’s Presidential Election of March 2008, by Shirley Kan.)
The KMT’s March 2008 presidential victory was preceded on January 12, 2008, by a sweeping
victory in which it swamped the DPP in elections for the Legislative Yuan (LY). Having won the
presidency as well in March, the KMT assumed solid control of the government in May 2008.
The 2008 legislative elections were the first held under new electoral rules adopted in 2005 under
an amendment to Taiwan’s constitution. The rules cut in half the size of the LY to 113 members
from its former size of 225 and increased the term of office from three years to four years. The
rules also instituted a new single-member district system employing two ballots for voters, similar
to systems used in Germany and Japan: one to be cast for a candidate and one to be cast for a
political party. As demonstrated by the electoral results, the new system favored larger, well-
organized parties and put smaller parties at a disadvantage. Two smaller opposition parties have
been the People’s First Party (PFP), initially allied with the KMT as “Blue” parties, and the
Taiwan Solidarity Union (TSU), siding with the DPP as “Green” parties. Compared to the KMT,
the DPP and TSU have been more Taiwan-centric in their perspectives and wary of the PRC.
Major Developments in Cross-Strait Engagement
Ties or tension across the Taiwan Strait affect international security (with potential U.S.
intervention). Congressional oversight has been concerned with support for U.S. interests,
particularly respect for Taiwan’s democracy. Since their first direct talks in 1992, Taiwan and the
PRC have negotiated through quasi-official organizations: the Strait Exchange Foundation
(SEF)
in Taipei and the Association for Relations Across the Taiwan Strait (ARATS) in
Beijing. In discussing practical issues in initial contact, the two sides agreed to disagree on the
meaning of “one China” with the verbal formulation of “One China, Different Interpretations.” To
Taipei, “China” is the ROC. To Beijing, “China” is the PRC. However, years later, the CPC and
KMT shifted to contend that they reached a “1992 Consensus.” The DPP has disputed that there
was a “consensus” and has argued that any understanding was reached between two political
parties without a democratic mandate. The two sides of the Taiwan Strait ambiguously talk about
their “cross-strait” (rather than “domestic” or “international”) relationship.
Resumed Dialogue and Reduced Tension
In the two months between his election and his inauguration on May 20, 2008, President Ma
spoke of his intentions to begin normalizing cross-strait ties in a “cross-strait common market,” to
establish direct air links with the PRC, and to ease other restrictions on cross-strait contacts. In his
inaugural address, President Ma announced his “Three Noes”: “no unification, no independence,
and no use of force” to maintain the “status quo” and set aside the sovereignty dispute. He called
for a “diplomatic truce” with the PRC and pledged to stop using “dollar diplomacy” in a zero-sum
game to win or preserve diplomatic recognition around the world.5 After his inauguration,
President Ma moved to improve cross-strait engagement, building on foundations laid by the

5 “Dollar diplomacy” (or “checkbook diplomacy”) refers to both Taiwan and the PRC competing for diplomatic
relations by promising to and investing huge sums in countries that may be wavering in their diplomatic allegiances.
Congressional Research Service
6

U.S.-Taiwan Relationship: Overview of Policy Issues

previous President Chen.6 KMT Chairman Wu Poh-hsiung met with CPC General Secretary Hu
Jintao on May 28, 2008, the highest-level encounter between the two governments after 1949.7
Along with Washington’s actions to maintain the relationship with Taipei, it has pursued closer
engagement and reduced tension across the Taiwan Strait. Although the PRC objects to U.S.
security assistance to Taiwan as harming cross-strait “peaceful development,” economic
integration and other engagement between Taiwan and the PRC have intensified. Taipei contends
that U.S. support provides it with confidence and strength to engage with Beijing.
Cross-Strait Agreements
In June 2008, KMT President Ma Ying-jeou and the PRC leadership resumed the cross-strait
dialogue (after a decade) and pursued closer engagement, beyond seeking détente. President Ma
announced a priority of economic talks over political negotiations with Beijing. Taiwan’s reality
involved the PRC as Taiwan’s largest trading partner by 2003 and as many as 2 million of its
citizens already working and living in the PRC by 2008. By the end of 2009, Taiwan’s companies
had invested about $150 billion in over 77,000 projects in the past 20 years there.8
Since 2008, Taiwan has announced 10 rounds of SEF-ARATS talks along with the signing of 21
cross-strait economic or functional agreements. Those agreements included the Economic
Cooperation Framework Agreement (ECFA) to lower tariffs or relax access for 539 products and
services from Taiwan. Though politically controversial, President Ma promoted the ECFA amid
the opposition DPP’s protests and negotiated it within months, from January 2010 until it was
signed in June 2010. A range of government officials and their counterparts developed routine
contacts across the strait, including through phone calls. In May 2010, the two sides opened the
first quasi-official agencies (as tourism offices) in Beijing and Taipei. Two dramatic changes cited
by Taiwan’s people and foreign businesspeople have been direct flights across the strait and
Taiwan’s increased dependence on tourists from the PRC. From mid-2008, when Taiwan allowed
PRC tour groups, until the end of 2011, 3 million PRC tourists visited Taiwan. In June 2011,
Taiwan announced deals that accepted individual PRC tourists and increased direct flights from
370 to 560 a week. Taiwan announced that passenger flights expanded to 670 a week in August
2013 and to 828 a week in March 2014. In 2013, PRC visitors (including those from Hong Kong
and Macau) accounted for 50.6% of about 8 million visitors to Taiwan.9
Starting in 2009, Taiwan looked to conclude an agreement on investment protection for Taiwan’s
business people, but negotiations were difficult over issues that involved dispute resolution
(whether to have an international mechanism). After postponing an investment protection
agreement expected in June 2012, the two sides announced in August two agreements on
investment protection (including some allowance for arbitration) and customs cooperation. At the
9th round of talks on June 21, 2013, the two sides signed the 19th agreement (on trade in services).
In addition to the quasi-official SEF-ARATS meetings, the officials in charge of cross-strait
affairs held their first formal meeting since 1949 on February 11, 2014. Taipei’s Mainland Affairs

6 Among other initiatives during the Chen Administration, in January 2005, Taiwan and the PRC launched the first
non-stop holiday direct charter flights flown in 55 years across the strait. These were expanded in 2006 with an
agreement to allow up to 168 direct annual round-trip charter passenger flights between the PRC and Taiwan.
7 On April 29, 2005, when the KMT was out of power, KMT Chairman Lien Chan met with CPC General Secretary Hu
Jintao, the first time the leaders of the KMT and CPC had met since World War II.
8 Kathrin Hille, “Straitened Times,” Financial Times, March 26, 2008; CNA, Taipei, December 23, 2009.
9 CNA, Taipei, January 4, 2012; March 15, 2014.
Congressional Research Service
7

U.S.-Taiwan Relationship: Overview of Policy Issues

Council (MAC) Minister Wang Yu-chi met with Beijing’s Taiwan Affairs Office (TAO) Director
Zhang Zhijun in Nanjing, the capital of the ROC authorities before they retreated to Taipei in
1949. The MAC and TAO agreed to start direct communication. Before the meeting, Taipei’s LY
passed a resolution to prohibit Wang from signing any agreement or compromising Taiwan’s
sovereignty. There was no recognition of each other’s governments. Official PRC media called
Wang “Taiwan’s MAC official.” The MAC called Zhang “the Mainland’s TAO Director.”
Continuing Challenges
Agreements
Despite the announcements of those agreements, the two sides did not sign an expected
agreement on taxation in 2009, in a dispute over the PRC’s proposal to tax income from stock
trading. At the 7th round in October 2011, the two sides also announced a “consensus” (not
agreement) on industrial cooperation. After failing to reach an agreement between banking
regulators in April 2011, the two sides announced a “consensus” in November. Still, the Taiwan
side believed it pragmatically negotiated benefits for its banks. Also, at the end of August 2012,
Taiwan and the PRC signed a memorandum of understanding (MOU) on currency clearing.
Taiwan continues to face challenges in protecting its citizens from detentions in the PRC
(including secret detentions in PRC “black jails”). From June 18, 2012, just before the investment
protection agreement was expected, until August 11, the PRC’s Ministry of State Security (MSS)
detained Chung Ting-pang (Bruce Chung), a visitor from Taiwan, for allegedly sabotaging
national and public security in activities associated with Falun Gong (a banned group in the
PRC). Representative Dana Rohrabacher wrote a letter on July 10 to urge President Ma to speak
out strongly against Chung’s detention. (Later, on December 18, Chung testified at a hearing
chaired by Representative Christopher Smith and Senator Sherrod Brown of the Congressional-
Executive Commission on China (CECC). Chung discussed interrogations about his activities and
about other Falun Gong practitioners in Taiwan. He also commented that the Ma Administration
was relatively passive in securing his release.) Taiwan said it got a separate “consensus” in
August on protecting the safety of Taiwan’s business people. However, questions remained about
protections for visitors not doing business, not detained by the police but the MSS, held in
security-related cases, detained in secret, and denied prompt, private, and repeated visits by
relatives, officials, and lawyers (not just notifications of detentions to relatives). Other questions
concerned Taiwan’s enforcement of PRC promises and securing the release of other detained
citizens. New York University (NYU) legal scholar, Jerome Cohen, co-authored a critique.10
The pace has slowed in signing cross-strait agreements since 2008. The initial pace of signing
multiple agreements a year was not sustained. While there were two rounds of talks in each year
of 2008, 2009, and 2010, the 7th round took place in 2011, the 8th in 2012, the 9th in 2013, and the
10th in 2014. Signed on February 27, 2014, the 20th and 21st agreements (on meteorology and
earthquakes) were the first cross-strait agreements that Taiwan’s officials reviewed for national
security impacts. Taiwan said that the agreements would cover public, not secret or militarily-
sensitive, information, so it was unclear why Taiwan would not simply issue the data openly and
needed a bilateral deal. The quasi-official SEF and ARATS signed these agreements, despite the
first formal meeting on February 11 between officials of Taipei’s MAC and Beijing’s TAO.

10 Jerome Cohen and Yu-Jie Chen, “For Taiwanese, the Mainland Remains a Dangerous Place,” South China Morning
Post
, Hong Kong, September 5, 2012; Author’s interview, December 2012.
Congressional Research Service
8

U.S.-Taiwan Relationship: Overview of Policy Issues

Though the Agreement on Trade in Services was signed at the 9th round of talks in June 2013, it
has not been concluded. Some legislators and activists have protested that the Ma Administration
did not fully brief the LY and allow time for debate about the agreement, did not show sufficient
transparency in the talks, did not adequately consult in advance with the many affected industries,
did not present assessments of positive and negative impacts or national security implications,
and did not respond to public concerns (particularly of young people worried about relocation of
firms and jobs to the PRC and expanding economic dependence on and influence of the PRC).
After the agreement was signed, President Ma argued on June 28 that it would help in Taiwan’s
economic liberalization, involve Taiwan in regional trade talks, and advance cross-strait ties.11
Both KMT and DPP legislators called for the LY’s detailed section-by-section review of the
agreement and agreed on a series of 16 hearings from September 2013 to March 2014. However,
starting on March 12, 2014, the LY’s meetings about the agreement on trade in services triggered
a more heated debate and protests. Ruling KMT and opposition DPP legislators fought over
procedural disputes. On March 17, a KMT legislator said that committees have reviewed the
agreement, but DPP legislators insisted on completing the review before a floor vote. At night on
March 18, about 2,000-2,500 college students and other young activists (in what people in Taiwan
called the “Sunflower Movement”) started to protest how the LY reviewed the agreement by
occupying the LY. On March 20, student leaders (in a group called Black Island-Nation Youth
Front set up in September 2013 and denied attendance at the LY’s hearings) shifted their demands
against the Ma Administration to call for a rejection of the agreement and suspension of cross-
strait negotiations until the LY passes a law on oversight of agreements with the PRC. According
to foreign and domestic accounts, news media, photos, and videos, the protest escalated when
hundreds of activists (reportedly not directed by the student leaders) broke into the Executive
Yuan (Cabinet)’s office building at night on March 23. Overnight, riot police armed with batons,
shields, and water cannons cleared the EY’s compound of protesters. Officials called the move a
necessary response to an illegal occupation of government offices, but critics called the action an
excessive use of force, including against journalists and a lawmaker. Police, protestors, and others
were hurt, including a TSU legislator who intervened between them. On March 24, the State
Department noted that the agreement is for Taiwan to decide, peacefully and civilly. The TAO in
Beijing said on March 26 that the agreement is mutually beneficial and that no one wants to see
“peaceful development” disturbed. On March 30, about 116,000 to 400,000 protestors chanted
“Reject the Trade Agreement, Defend Democracy” in the streets in front of the Presidential
Office. The LY’s President (“Speaker” and political rival in the KMT of President Ma), Wang Jin-
pyng, pledged on April 6 to oversee the passage of an oversight law on cross-strait agreements
before he convenes more inter-party talks on the review of the Agreement on Trade in Services.
After Wang’s promise, the activists agreed to end the occupation of the LY on April 10.
Some in Taiwan were concerned that the delay in concluding the cross-strait trade agreement
would harm Taiwan’s effort to join the TPP talks. But the State Department’s U.S. Senior Official
for Asia-Pacific Economic Cooperation (APEC) Robert Wang said in Taipei in April that, “when
we look at Taiwan’s membership in the TPP, we will be asking Taiwan what areas you are willing
to open up on its own, unrelated to which areas Taiwan opens to China. That’s another issue.”12
PRC leader Xi Jinping said that Beijing would obtain in-depth understanding of the “real
requirements” of Taiwan’s people, especially at the grassroots, and care for the disadvantaged

11 Central News Agency, May 27, June 14, June 19, June 25, June 28; Taipei Times, May 28, June 22, June 26, 2013.
12 Robert Wang quoted in Taipei Times, April 22, 2014.
Congressional Research Service
9

U.S.-Taiwan Relationship: Overview of Policy Issues

groups in society.13 In June, Xi sent Zhang Zhijun in the first visit by a TAO Director to Taiwan,
and Zhang even met with Mayor Chen Chu of the DPP in her southern city of Kaohsiung.
U.S. and Other Foreign Companies
The United States has welcomed the reduction in tension brought by economic and people-to-
people engagement across the Taiwan Strait. Aside from increased stability and direct flights,
however, it has been less clear how the cross-strait agreements, especially ECFA, have benefitted
U.S. and other foreign firms. Deputy Assistant Secretary of State David Shear said in July 2010
that “if ECFA is to be a truly successful arrangement, firms from the United States and other
countries must also be able to benefit.” Taiwan announced that ECFA entered into force on
September 12, 2010. However, some were concerned that Taiwan has not notified ECFA to the
WTO, as required of its members. Taiwan’s officials have claimed that there was a notification,
but Taiwan made only an early announcement. Moreover, even as Taipei quickly negotiated
ECFA with Beijing from January to June 2010, Taipei did not devote a similar level of attention
to resolving the dispute with Washington over beef (see discussion below). Further, in mid-2011,
the American Chamber of Commerce (AmCham) in Taipei noted that 41.7% of Taiwan’s exports
went to the PRC (including Hong Kong) and warned Taiwan against the risks of over-reliance on
one market. AmCham urged Taiwan to pursue balanced relationships that include stronger ties
with other countries, particularly the United States as part of a national security agenda. Asked in
2014 about the effect of ECFA on their business, 41% of that AmCham’s members which
answered its survey said that the effect was neutral, 40% saw some positive effect, 4% saw very
positive effect, 9% did not know, and the remaining 6% reported some or very negative effect.14
In addition, some observers pointed out that Taiwan could increase substantive visits to the
United States by its Minister of Economic Affairs. Cross-strait flights raised an issue of whether
they have helped or harmed U.S. and other foreign airlines, aside from Taiwan and PRC airlines.
In September 2012, AmCham published an article, lamenting that the shipping links set up across
the strait in 2008 have done little to help Taiwan realize its aspiration of becoming a shipping
hub, since the arrangement excluded foreign carriers from cross-strait shipping.
Taiwan has tried to use ECFA as a springboard for bilateral and multilateral economic
agreements. Taiwan also has faced challenges in joining multilateral trade talks (such as the TPP),
although it has the option of unilateral liberalization of trade and investment rules. On July 10,
2013, Taiwan and New Zealand signed a bilateral agreement. Taiwan touted the value of the
agreement, because New Zealand is one of the countries in the TPP.15 Taiwan later signed the
Agreement between Singapore and Taiwan on Economic Partnership (ASTEP) on November 7.
National Security
Questions also have arisen about Taiwan’s reviews of technology transfers to the PRC and any
national security implications of increasing PRC investments in Taiwan, including how Taiwan’s
review of PRC investments compares with the U.S. security review by the Committee on Foreign
Investment in the United States (CFIUS) and how Taiwan’s Ministry of Economic Affairs
(MOEA) is cooperating with the PRC’s Ministry of Industry and Information Technology

13 Xinhua, May 7, 2014, reported Xi’s remarks to James Soong, Chairman of Taiwan’s People’s First Party (PFP).
14 AmCham Taipei, “Business Climate Survey,” Taiwan Business Topics, February 2014.
15 The Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu
on Economic Cooperation (ANZTEC). Later in July 2013, Japan joined the TPP talks as the 12th member, along with
Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam.
Congressional Research Service
10

U.S.-Taiwan Relationship: Overview of Policy Issues

(MIIT).16 The MIIT is part of the PRC’s defense industrial structure. In November 2013, as
President Ma sought the LY’s approval of the cross-strait agreement on trade in services signed in
June, the Investment Commission of the MOEA announced stricter rules for investments by PRC
companies in Taiwan that threaten security or are sensitive.
Further, despite cross-strait engagement, concerns remain about the PLA’s challenges to Taiwan.
At the hearing of the House Foreign Affairs Committee on October 4, 2011, Acting Assistant
Secretary of Defense Peter Lavoy expressed the U.S. concern that a Taiwan that is vulnerable,
isolated, and under threat would not be in a position to discuss its future with the PRC and might
invite the very aggression U.S. policy seeks to deter. He warned that if the PLA were to attack, it
would be able to rapidly degrade Taiwan’s ability to resist. Lavoy testified that the Defense
Department’s report to Congress on Taiwan’s air power concluded that Taiwan’s defense cannot
match the PLA one-for-one. He reiterated the Pentagon’s view that Taiwan needs innovative and
asymmetric approaches, not simply limited numbers of advanced weapons systems.
On March 5, 2013, the Pacific Command (PACOM)’s Commander, Admiral Samuel Locklear,
testified to the House Armed Services Committee that the cross-strait relationship was stable and
tensions were at historic lows due to economic integration and people-to-people contact.
However, he warned that the PLA continued a robust military buildup against Taiwan that
contradicted the PRC’s stated “peaceful development” of ties with Taiwan. He reported that many
of the PLA’s developments appeared to be intended for use in a possible conflict with Taiwan
(including ballistic and cruise missiles, patrol boats, mines, electronic warfare, and cyber threats).
At a hearing of the Senate Armed Services Committee on February 11, 2014, Defense
Intelligence Agency (DIA) Director Michael Flynn testified that the primary driver of the PLA’s
evolving force structure, weapons development, planning, and training remained the preparation
for conflict against Taiwan with possible U.S. intervention. The Defense Secretary reported to
Congress in June 2014 that the PLA’s primary mission remained focused on a potential
contingency in the Taiwan Strait and that this focus has continued despite Taiwan’s re-election in
2012 of President Ma. The Pentagon reported that, despite closer cross-strait ties, the PLA has
continued to develop and deploy capabilities for action against Taiwan. The Defense Department
warned that PRC leaders stress the objective of reaching critical economic and military
benchmarks by 2020, which include attaining the capability to fight and win potential regional
conflicts, including those related to Taiwan. The PLA’s Second Artillery (missile force) has
deployed more than 1,000 short-range ballistic missiles (SRBMs) across from Taiwan and also
has long-range surface-to-air missiles (SAMs) and land-attack cruise missiles (LACMs). The
PLA held the MISSION ACTION 2013 joint exercise across from Taiwan that covered
amphibious landing operations. However, the PLA Navy lacks the amphibious lift capacity to
conduct a large-scale invasion of Taiwan.17
PRC Political Pressure
Observers might watch to see whether President Ma ensures greater transparency about cross-
strait negotiations and agreements for Taiwan domestically, the United States and other countries,
and international groups. Since 2005, the CPC and KMT have proposed a “peace agreement” and
military confidence building measures (CBMs). In campaigning for re-election in October 2011,
Ma raised the controversial idea of a cross-strait peace accord. Beijing took the results of

16 In Taipei in August 2013, a vice minister of Taiwan’s MOEA and a vice minister of the PRC’s MIIT reportedly
attended the “2013 Conference on Cross-Strait High-Tech Industrial Investment, Cooperation, and Procurement.”
17 Secretary of Defense, “Military and Security Developments Involving the PRC, 2014,” June 5, 2014.
Congressional Research Service
11

U.S.-Taiwan Relationship: Overview of Policy Issues

Taiwan’s elections in January 2012 as validation of the “peaceful development” approach. On that
basis, Beijing could continue patient engagement focused first on economics and refrain from
pressuring Ma, given cross-party criticism of his leadership and his low approval ratings.
Further into Ma’s second term, however, Beijing could increase pressure on Taiwan, in preparing
for if not pressing for political and military negotiations. In March 2012, two months before Ma’s
second inauguration, KMT Honorary Chairman Wu Poh-hsiung met in Beijing with CPC
General-Secretary Hu Jintao, who called for actions to build “political trust” with the insistence
that “the mainland and Taiwan belong to one China.” On his part, the KMT’s Wu stressed the
concept of “one country, two areas.” The opposition DPP criticized the “one country, two areas”
formulation, stressing that Taiwan is a sovereign country and does not belong to the PRC. A
month before Ma’s inaugural address, Beijing’s Taiwan Affairs Office (TAO) Director Wang Yi
visited Washington in April, where he met with Deputy Secretary of State William Burns. Wang
indicated Beijing’s expectation of future political talks with Taipei.18
In his second inaugural address on May 20, 2012, President Ma did not repeat either of those
phrases. Ma apparently assured Beijing about his cross-strait policy but asserted limits in
accommodating on sovereignty. While Ma upheld the “1992 Consensus” (explicitly defined as
“One China, Different Interpretations”), he more explicitly and formally added that “one ROC,
two areas” defines the two sides of the Taiwan Strait. Ma proposed that the two sides practice
“mutual non-recognition of sovereignty and mutual non-denial of governing authority,” because
the ROC’s sovereignty covers Taiwan and the mainland, but the ROC governs only the islands of
Taiwan, Penghu, Kinmen, and Matsu. However, Ma reiterated the principle in the first inaugural
address of maintaining the “status quo” of what he called “no unification, no independence, and
no use of force.” He also stressed democracy, human rights, rule of law, and civil society. While
Ma noted that national security is the key to the ROC’s “survival,” he articulated an approach that
relied on cross-strait engagement, diplomacy for international space, and defense. On his defense
policy, Ma did not explicitly cite the PLA as the threat but called for continued U.S. arms sales in
order to sustain the cross-strait engagement. While the English version of his speech called for a
“strong national defense” to deter external threats, the original text in Chinese referred to the
“national defense forces.” At a conference four days later, President Ma invoked the model of
West Germany and East Germany on a distinction between sovereignty and jurisdiction.19
It was unclear if Ma’s message was coordinated as part of parallel statements that involved
control of Wu’s meeting with Hu, a counter to Hu’s position, or a compromise. On May 30, when
asked about Ma’s “One ROC, Two Areas” formulation, the CPC TAO responded that it was not
surprising and was consistent with the view that both sides of the strait belong to one China
(rather than a “state-to-state relationship”) and beneficial to the peaceful development of the
cross-strait ties. However, the TAO rejected use of the model of the two Germanys.
Beijing’s patience could be tested further by the sustained separate identity in Taiwan. Despite the
pronouncements of a “one China” by leaders in Taipei and Beijing and closer cross-strait ties,
Taiwan’s people retain a strong Taiwan-centric identity after over a century of mostly separation
from mainland China. Still, Taiwan’s people pragmatically have pursued prosperity, security, and
their democratic way of life and self-governance. Moderate voters generally have supported
economic ties to the PRC amid political separation. In a June 2014 poll in Taiwan, 59% of those
surveyed desired the status quo (indefinitely or with a later decision on unification or

18 Xinhua, Beijing, and CNA, Taipei, March 22; Taipei Times, April 14, 2012.
19 In February 2014, President Ma again cited the German model and referred to the Basic Treaty between West
Germany and East Germany. That treaty of 1972 recognized special ties between two German States in one nation.
Congressional Research Service
12

U.S.-Taiwan Relationship: Overview of Policy Issues

independence), 18% called for the status quo followed by independence, 6% want independence
as soon as possible, 9% favored the status quo followed by unification, only 1.4% called for
unification soon, and the remaining 7% voiced no opinion. The results showed the same low
support for urgent unification, compared with results back in August 2008 (shortly after Ma
became president), when 1.5% desired unification as soon as possible.20
At the 18th National Congress of the CPC in Beijing in November 2012, outgoing CPC General
Secretary Hu Jintao delivered a report that was drafted by a group led by incoming CPC General
Secretary Xi Jinping. The report called for strengthening political, economic, cultural, and social
cross-strait ties to achieve eventual “peaceful reunification.” While stressing political ties first
and without new initiatives, the report indicated that top-level authoritative policy would continue
to call for the “1992 Consensus,” military CBMs, and a peace agreement.
On his part, Taiwan President Ma said in his New Year day address for 2013 that he will
cooperate with Xi Jinping on the basis of the “1992 Consensus,” but Ma clarified that each side of
the strait retains its own interpretation of what “one China” means. Ma said that his policy would
seek to expand all aspects of cross-strait ties while stressing economic and people-to-people ties.
Ma said that Taiwan will seek to loosen further the restrictions on investments, students, and
individual travelers from the mainland, including through amendment of the “Act Governing
Relations between the People of the Taiwan Area and the Mainland Area.” Moving on to a
political matter, Ma said that the two sides would establish reciprocal, representative offices.
In addition, President Ma has to deal with a political propensity in his own party to move even
closer to the PRC. In February 2013, KMT Honorary Chairman Lien Chan met in Beijing with Xi
Jinping. Furthermore, Lien visited the Beijing Aerospace Control Center, though the PLA controls
the PRC’s space program. Ma’s office stressed that he did not give Lien any message to convey.
Starting in April 2013, negotiations for setting up the “representative offices” reportedly raised
issues (in the KMT and opposition parties) about sovereignty and national flags, legal immunity
and inviolability, equal and reciprocal rights, repeated and official visits to (not just notifications
of) detained citizens (including Taiwan’s intelligence agents in China), travel permits (visas),
non-interference in Taiwan’s elections, security, and political talks. Before Taiwan completed
talks over the representative offices, the Ma Administration asked the LY to approve the authority
in June, but KMT, DPP, PFP, and TSU lawmakers balked at granting a “blank check.” According
to Taiwan officials, Taiwan has about 1,500 citizens who were detained or imprisoned in the PRC.
In June, President and KMT Chairman Ma again sent KMT Honorary Chairman Wu Poh-hsiung
to Beijing to meet with CPC General-Secretary Xi Jinping and maintain momentum in cross-strait
engagement. After adding the phrase of “one country, two areas” the previous year, Wu added this
time that the ties are under the “one China framework,” another phrase different from the vague
“1992 Consensus.” Wu conveyed Ma’s message that “representative offices” would not be
diplomatic offices since cross-strait ties are not “state-to-state” under the ROC’s constitution. The
DPP criticized the KMT’s use of “one China framework” as harming Taiwan’s sovereignty. The
KMT’s use of “one China framework” seemed to complicate efforts for forging a domestic
consensus. The nuanced shift came as the DPP shifted to be willing to discuss the “1992
Consensus.” In July, the DPP’s China Affairs Committee talked about the “1992 Consensus.”
In October 2013, CPC General Secretary Xi Jinping seemed to raise pressure on Ma Ying-jeou to
agree to political talks. At the APEC leaders’ summit in Bali, Xi told Ma’s representative, former
vice president Vincent Siew, that the long-term political differences across the strait should be

20 Surveys conducted by the Election Study Center at the National Chengchi University in Taipei, Taiwan.
Congressional Research Service
13

U.S.-Taiwan Relationship: Overview of Policy Issues

resolved gradually and that they should not be passed from one generation to another. In an
interview with the Washington Post on October 24, Ma defended Taiwan’s approach and denied
avoiding political issues. He said that Taiwan deals with political issues when the time is ripe.
Issues in U.S. Policy on Taiwan
Overview
The Administration and Congress have considered various options to strengthen cooperation with
Taiwan. In 2011, Taiwan’s political campaigning constrained U.S. influence on some priorities,
particularly opening Taiwan’s market to U.S. beef and pork. There was expectation that after the
elections in January 2012, Taiwan would pay greater attention to the relationship with the United
States. Both Washington and Taipei describe the relationship as generally a positive one of an
economic and security partnership based on shared values. On the U.S. side, the Legislative and
Executive Branches took actions to strengthen cooperation and ties. The House Foreign Affairs
Committee held hearings on “Why Taiwan Matters” on June 16 and October 4, 2011.
In September 2011, the Obama Administration met with visiting delegations from Taiwan’s
presidential candidates, led by DPP candidate Tsai Ing-wen and the key advisor in KMT President
Ma’s campaign (King Pu-tsung). However, the Administration promptly gave negative remarks to
the Financial Times, saying that Tsai raised doubts about continuing cross-strait “stability,”
despite professing U.S. neutrality in Taiwan’s democratic elections.21 The Administration then
notified Congress on September 21 of three major arms sales programs with a total value of $5.9
billion, including upgrades for Taiwan’s existing F-16A/B fighters. The Administration also
increased senior visits to Taiwan, sending Assistant Secretary of Commerce Suresh Kumar in
September and then U.S. Agency for International Development (USAID) Administrator Rajiv
Shah and Deputy Secretary of Energy Dan Poneman in December 2011. After not mentioning
Taiwan in an article in Foreign Policy on “America’s Pacific Century” in October 2011, Secretary
of State Hillary Clinton added the next month that the United States has a strong relationship with
Taiwan as an “important security and economic partner.” As expected for months, on December
22, the State Department nominated Taiwan as a candidate for the Visa Waiver Program (VWP).
The Obama Administration has argued that its efforts to intensify and expand engagement with
the PRC have not been at the expense of stronger cooperation with Taiwan. Washington officials
contend that they have pursued parallel relationships with Beijing and Taipei. Nonetheless, policy
issues have included whether the Administration has ambitious objectives to achieve in engaging
with Taipei, has timed arms sales and certain other actions out of concern about the potential
reaction from Beijing, strengthened ties with Taiwan in the months before the elections in January
2012 to favor President Ma of the KMT, has been effective in encouraging Taiwan to invest more
in defense, or has included Taiwan in the strategic “rebalance” to Asia.
On Taiwan’s side, President Ma “transited” in the United States, where he sometimes met with
Members of Congress and joined public activities: in Los Angeles, Austin, and San Francisco on
his way to and from Paraguay and the Dominican Republic in 2008; in San Francisco and
Honolulu on his way to and from Panama and Nicaragua in 2009; in San Francisco and Los
Angeles on his way to and from Honduras and the Dominican Republic in 2010; in New York and
Los Angeles on his way to and from Paraguay, Haiti, Saint Kitts and Nevis, Saint Lucia, and Saint

21 Anna Fifield, Robin Kwong, and Kathrin Hille, “U.S. Concerned About Taiwan Candidate,” Financial Times,
September 15, 2011. The unnamed U.S. official raised doubts about Tsai but did not cite any specific comment.
Congressional Research Service
14

U.S.-Taiwan Relationship: Overview of Policy Issues

Vincent and the Grenadines in August 2013; in Los Angeles in January 2014; and Honolulu and
San Francisco in June-July 2014. Ma asserted that he rebuilt U.S.-Taiwan trust by not raising
cross-strait tension. With the political season over in January 2012, Ma said he placed priority on
cooperation with the United States. However, some observers stressed that Taiwan needed to
restore some trust lost in the relationship and reciprocate U.S. efforts to strengthen it. Although
Ma has served also as the Chairman of the KMT, he faced a challenge (some called a “crisis”) for
years to lead his administration and party to resolve the disputes over U.S. beef and pork.
On the occasion of President Ma’s second inauguration on May 20, 2012, Representative Ros-
Lehtinen led a congressional delegation to visit Taiwan. In meetings with the Codel and the
delegation led by former White House chief of staff William Daley that represented the Obama
Administration, President Ma said that Taiwan seeks to join the TPP (though in eight years). In
his New Year’s Day address in 2014, however, President Ma pressed urgently for Taiwan to
promote liberalization and avoid its marginalization in regional economic integration. He called
for action in 2014 by the Cabinet’s Task Force on International Economic and Trade Strategy.
On the strategic “rebalance” toward the Asia-Pacific, issues have concerned whether U.S. strategy
considers Taiwan’s security role narrowly in the Taiwan Strait or broadly in the western Pacific,
and what Taiwan has contributed. After not mentioning Taiwan in an article on a U.S. “pivot” to
the Pacific in Foreign Policy on “America’s Pacific Century” in October 2011, Secretary of State
Clinton gave a speech on the same subject the next month in Honolulu and added that the United
States has a strong relationship with Taiwan as an “important security and economic partner.” At
the start of 2012, President Obama and Defense Secretary Leon Panetta issued new Defense
Strategic Guidance on how to maintain U.S. military superiority in the face of budget cuts and to
“rebalance” priorities, posture, and presence to stress more attention to Asia as well as the Middle
East. An issue arose about Taiwan’s role in the U.S. comprehensive strategy of rebalancing more
diplomatic, defense, and economic attention to Asia. At a conference of defense ministers in
Singapore in June 2012, Defense Secretary Panetta discussed the refocus to Asia and mentioned
Taiwan by saying that the United States strongly supports the efforts of both the PRC and Taiwan
in their engagement. He added that “we have an enduring interest in peace and stability across the
Taiwan Strait.” Taiwan’s Deputy Defense Minister Andrew Yang said he discussed Taiwan’s role
in the rebalancing strategy with U.S. officials in August and with Deputy Secretary of Defense
Ashton Carter on October 2, 2012. Meanwhile, Assistant Secretary of State for Economic and
Business Affairs Jose Fernandez visited Taipei in August 2012. He delivered a speech that
discussed economic exchanges with Taiwan in the context of the U.S. rebalance to the region.22
For years, the United States and Taiwan sought to resume trade talks under the Trade and
Investment Framework Agreement (TIFA), or TIFA talks. However, Taiwan’s restrictions on U.S.
beef raised concerns. TIFA talks resumed in March 2013, for the first time since July 2007. Since
then, Chairmen Ed Royce and Robert Menendez of the House Foreign Affairs and Senate Foreign
Relations Committees, and other Members, have supported a bilateral investment agreement
(BIA). Saying that he was “optimistic” about U.S.-Taiwan cooperation, Deputy Assistant
Secretary of State Kin Moy also noted a potential BIA in a speech on October 3. He said that
“Taiwan remains a close partner with whom we engage in a full range of substantive interactions,
including trade negotiations, scientific and technological cooperation, environmental protection,
academic and cultural exchanges, delegation visits, and security cooperation.”23 In late October,

22 Hillary Rodham Clinton, “America’s Pacific Century,” East-West Center, Honolulu, Hawaii, November 10, 2011;
Defense Department, “Remarks by Secretary Panetta at the Shangri-La Dialogue in Singapore,” June 2, 2012; Author’s
consultation, August 2012; Andrew Yang’s interview with Defense News, published on November 12, 2012.
23 Kin Moy, “Trends in the U.S.-Taiwan Relationship,” Carnegie Endowment for International Peace, October 3, 2013.
Congressional Research Service
15

U.S.-Taiwan Relationship: Overview of Policy Issues

Taiwan’s executives visited Washington, DC, for President Obama’s first Select USA Investment
Summit. On November 20, former vice president Vincent Siew spoke at the Brookings Institution
and sought U.S. support for Taiwan to join the TPP. He led a delegation to the United States of
about 20 business executives and a deputy minister of economic affairs to discuss trade and
investment with Members of Congress, Administration officials, and U.S. private industry.
At a hearing on March 14, 2014, of the House Foreign Affairs Committee to mark the 35th
anniversary of the enactment of the TRA, Chairman Royce said that the United States is not doing
enough in arms sales for Taiwan’s self-defense to meet the spirit of the TRA. In other actions to
reaffirm the TRA, Members attended a congressional reception in the Capitol on April 2. On
April 3, the Senate Foreign Relations Subcommittee on East Asian and Pacific Affairs held a
hearing on the TRA. In response to Senator Marco Rubio, Assistant Secretary of State for East
Asian and Pacific Affairs Daniel Russel did not clearly reaffirm the Six Assurances. After the
hearing, Russel clarified to reporters that the Administration remained committed to the Six
Assurances as well as the TRA and three Joint Communiques.24 On April 7, the House agreed (by
voice vote) to pass H.R. 3470, which combines H.Res. 494 (to affirm the TRA) and the Naval
Vessel Transfer and Arms Export Control Amendments Act (to authorize the transfer by sale of up
to four excess U.S. Navy Perry-class frigates to Taiwan, among other stipulations). On April 9, 52
Senators, led by Senators Menendez and Inhofe, sent a letter to President Obama to mark the
TRA and note Taiwan’s aspiration for economic integration, such as joining the TPP talks.
For years, an issue was whether to resume visits by Cabinet-rank officials. After the United States
ended recognition of the ROC, such officials visited Taiwan in 1992, 1994, 1996, 1998, and 2000.
In December 2013, the Administrator of the Environmental Protection Agency (EPA), Gina
McCarthy, visited the PRC and also was to visit Taiwan. She postponed her visit to Taipei.
McCarthy visited Taiwan on April 13-15, 2014, resuming Cabinet-rank visits after 14 years.25 On
the 20th anniversary of the Taiwan Policy Review of 1994, Representative Ed Royce, Chairman of
the House Foreign Affairs Committee, led a total of 29 Members to send a letter, on September
23, 2014, to Secretary of State John Kerry, calling for expanding engagement with Taiwan.
In November, Principal Deputy Assistant Secretary of State for Economic and Business Affairs
Kurt Tong visited Taiwan. He stated that the United States welcomes Taiwan’s interest in joining
the TPP at a future date. Still, he urged Taiwan to continue to improve its competitiveness through
aggressive “unilateral liberalization” to address issues in trade and investment.26
International Security
The United States has watched Taiwan’s contribution to international development and security.
The United States could work with Taiwan to increase cooperation in international security.
Taiwan could boost its defense and foreign aid spending, counter cyber threats, and improve
counter-espionage amid cases in Taiwan of alleged spying for Beijing. Taiwan has the option to
increase military or civilian missions in humanitarian assistance and disaster relief (HA/DR).
In response to Haiti’s earthquake in January 2010, Taiwan’s Air Force delivered relief supplies on
a C-130 transport plane, which received approval for refueling and repair at U.S. bases. After

24 House Foreign Affairs Committee, “The Promise of the Taiwan Relations Act,” March 14; Senate Foreign Relations
Subcommittee on East Asian and Pacific Affairs, “Evaluation U.S. Policy on Taiwan on the 35th Anniversary of the
Taiwan Relations Act (TRA),” April 3; “U.S. Offers Reassurances on Commitment to Taiwan,” CNA, April 4, 2014.
25 Taiwan News, December 11, 2013; Author’s consultation; and AIT, news release, April 13, 2014.
26 Kurt Tong, Remarks at Asian Venture Capital Journal’s Taiwan Forum, Taipei, November 20, 2014.
Congressional Research Service
16

U.S.-Taiwan Relationship: Overview of Policy Issues

Japan’s catastrophic earthquake, tsunami, and nuclear disaster in March 2011, President Ma led
Taiwan to be the largest donor of official and private aid that totaled $224 million (including $25
million from the government),27 though Taiwan did not offer military and coast guard assistance
to Japan. The USAID Administrator’s visit in 2011 highlighted Taiwan’s role as an aid donor.
Still, Taiwan’s foreign aid amounted to $380 million in 2010 and in 2011, accounting for 0.1% of
gross national income (compared to the international average of 0.5%). In September 2012, in
Taipei, President Ma spoke at a conference on international aid, touting Taiwan’s development aid
but promising to maintain the aid budget (not to raise it). However, Taiwan’s 2013 foreign aid
reportedly dropped by almost 20% (to about $366 million). After a typhoon devastated the
Philippines on November 8, 2013, Taiwan’s government donated $200,000 and used Air Force C-
130 aircraft and a Navy landing ship-tank (LST) to deliver private and official supplies. In the
Middle East, starting in 2013, Taiwan provided shelters and other supplies for refugees in Jordan,
in part to support international efforts against the Islamic State. Taiwan also donated protective
clothing and cash to support medical efforts to treat Ebola in western Africa. In November 2014,
AIT Director Christopher Marut held a ceremony to accept Taiwan’s donations to treat Ebola.28
The United States has gained counterterrorism cooperation at ports through Taiwan’s agreements
in 2005 and 2006 to participate in the Container Security Initiative (CSI) (to screen and inspect
cargo before shipping to U.S. ports) and the Megaports Initiative (to detect and interdict nuclear
and other radioactive materials in cargo). The U.S. Department of Energy and Taiwan’s Ministry
of Finance and Directorate of Customs completed the installation of radiation detection
equipment at the southern port of Kaohsiung in February 2011. Visiting Taipei in December 2011,
Deputy Secretary of Energy Poneman personally applauded the milestone reached after five years
of effort. He remarked that Taiwan has worked with the U.S. National Nuclear Security
Administration (NNSA) to strengthen nuclear security at ports to detect nuclear smuggling.
The United States also has sought Taiwan’s cooperation in nuclear and missile nonproliferation
efforts especially concerning Iran and North Korea, reportedly involving Taiwan’s companies.
For example, in March 2009, the Shanghai-based Roc-Master Manufacture and Supply Company
reportedly ordered 108 pressure gauges that could be used in centrifuges to enrich uranium for
transfer to Iran from an agent in Taiwan (Heli-Ocean Technology Company) for Inficon Holding,
the manufacturer in Switzerland. In July 2010, Taiwan reportedly raided Ho Li Enterprises which
received orders since March 2007 from Dandong Fang Lian Trading Company in Dandong, PRC,
which was allegedly associated with North Korea’s military, for two dual-use, high-technology
machine tools that ended up in North Korea earlier in 2010. In August 2012, the United States
reportedly asked a Taiwan shipping company not to allow its ship to transfer suspected weapons-
related cargo in Malaysia that North Korea shipped via China bound for Burma (Myanmar).
Japan then seized the cargo. In October 2012, a U.S. court sentenced a Taiwan woman to two
years in prison for using her companies in Taiwan to procure embargoed technology for Iran.29 In
May 2013, an U.S. Attorney’s Office in Illinois announced the arrests in Estonia and the United
States of two citizens of Taiwan, Alex Tsai and his son, Gary Tsai, for using their Taiwan-based
companies to export U.S.-origin goods and machinery that could be used by North Korea to
produce weapons of mass destruction. Documents reported that in June 2008, Alex Tsai had been
indicted in Taiwan for illegally forging invoices and shipping restricted materials to North Korea,
and he was convicted later that year. Still, he could travel internationally. In January 2009, the

27 “Taiwan’s Japan Relief: Following the Money Trail,” Kyodo, Tokyo, March 10, 2014.
28 Ammun News, October 10, 2013; Author’s consultation; CNA, October 4, 9, 20, 22, and November 25, 2014; AIT,
Remarks by AIT Director Christopher Marut, Ebola Response Donation Ceremony, Taiwan, November 25, 2014.
29 Taipei Times, October 26, 2012; Asahi, Tokyo, November 24, 2012; Wall Street Journal, November 28, 2012.
Congressional Research Service
17

U.S.-Taiwan Relationship: Overview of Policy Issues

Department of the Treasury designated Alex Tsai and his two companies for supporting a North
Korean company involved in weapons proliferation. The Treasury Department urged all
governments to cut off this channel for North Korean procurement. The Department of the
Treasury then imposed sanctions against Taiwan’s Trans Multi Mechanics Company and its
general manager, Chang Wen-Fu, for procurement of dual-use machinery for North Korea and
links to Alex Tsai. The sanctions were effective on May 10 pursuant to Executive Order 13382,
“Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters.”30
The United States enacted the Comprehensive Iran Sanctions, Accountability, and Divestment Act
(CISADA) of 2010 (P.L. 111-195) on July 1, 2010, which followed the U.N. Security Council
Resolution 1929 of June against Iran’s nuclear program. Like others, Taiwan also is expected to
comply with U.S. sanctions on Iran for nuclear proliferation in Section 1245 of the National
Defense Authorization Act (NDAA) for FY2012 (P.L. 112-81). Taiwan has not announced its own
sanctions against dealings with Iran’s oil and gas industry, though petroleum refiner CPC
Corporation Taiwan is a state-owned enterprise. Taiwan cut some imports of Iran’s crude oil.
On June 11, 2012, the Secretary of State announced that Taiwan and six other countries
“significantly” reduced crude oil imports from Iran and would not be subject to the NDAA’s
sanctions for a period of 180 days. On December 7, 2012, the Secretary of State again decided to
exempt financial institutions in Taiwan (and other countries) from the NDAA’s sanctions for 180
days, based on further reductions in oil imports from Iran. On June 5 and November 29, 2013, the
Secretary of State again exempted Taiwan (and other countries) from sanctions under the NDAA
for FY2012. Major Taiwan shipping companies, Evergreen and Yang Ming, reportedly stopped
dealing with Iran by 2013.31 However, in November 2012, Taiwan’s Dragon Aromatics
petrochemical company (operating in the PRC) bought its first cargo of Iranian condensate
(natural gas in liquid form) from the PRC’s Zhuhai Zhenrong oil company (under U.S. sanctions
for transfers of gasoline to Iran). In December 2013, after the United States and other countries
negotiated an agreement with Iran to restrict its nuclear program, Zhuhai Zhenrong reportedly
started negotiations with Iran for a new contract for condensate that could raise oil imports and
would be delivered to the Dragon Aromatics petrochemical plant in Fujian province, China.32
In 2013, Taiwan increased the volume of crude oil imported from Iran by 8.9%, importing $806
million worth of crude oil. Iran’s place rose from the eighth-largest source of Taiwan’s imported
crude oil in 2012 to the seventh-largest source in 2013, according to Global Trade Atlas. In the
first three months of 2014, Taiwan reported no imports of crude oil from Iran.
On December 20, 2013, the United States and Taiwan, through representatives of the American
Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office (TECRO),
signed a new agreement on cooperation in civil nuclear energy to replace an agreement that was
first signed in 1972, was amended in 1974, and was due to expire in June 2014. On January 7,
2014, President Obama transmitted to Congress the proposed agreement on peaceful uses of
nuclear energy under Section 123 of the Atomic Energy Act of 1954. President Obama stated that
the agreement would advance U.S. interests in nonproliferation and foreign policy. He reported,
inter alia, that in the last two decades, Taiwan showed a reliable record on nonproliferation, that

30 Treasury Department, “Treasury Targets Taiwanese Proliferators,” January 16, 2009; U.S. District Court, Northern
Illinois, Criminal Complaints for Alex Tsai, October 23, 2012, and Gary Tsai, April 19, 2013; U.S. Attorney’s Office,
Northern District of Illinois, “Taiwanese Father and Son Arrested for Allegedly Violating U.S. Laws to Prevent
Proliferation of Weapons of Mass Destruction,” May 6, 2013; Treasury Department, “Treasury Sanctions Taiwan
Proliferators Linked to North Korea,” May 10, 2013; Federal Register, May 29, 2013.
31 Reuters, July 1, 2013.
32 Reuters, November 13, 2012; December 31, 2013.
Congressional Research Service
18

U.S.-Taiwan Relationship: Overview of Policy Issues

Taiwan has stated its adherence to the Nuclear Nonproliferation Treaty (NPT) as a non-nuclear
weapon state, and that Taiwan has followed the standards of the International Atomic Energy
Agency (IAEA). The President stated his readiness to start consultations with the Senate Foreign
Relations Committee and House Foreign Affairs Committee for 30 days of continuous session
review under Section 123b and 60 days of continuous session review under Section 123d.
Taiwan could increase counter-piracy security for and/or restrict its ships to reduce the burden on
international anti-piracy naval operations in the Gulf of Aden. A bilateral matter involved a U.S.
Navy ship and the death of the captain (Wu Lai-yu) of one of Taiwan’s fishing boats in a NATO
anti-piracy operation off Somalia on May 10, 2011. On July 23, the U.S. government provided a
report from the U.S. Fifth Fleet of the Naval Forces Central Command based in Bahrain on the
frigate USS Stephen W. Groves’ (SWG) interdiction of the Taiwan-flagged fishing boat that had
been hijacked in March 2010 and then used as a pirate mother-ship along with pirate skiffs to
attack other ships for more than a year off the Horn of Africa. The U.S. Navy operated under the
NATO-led Combined Task Force 508 to conduct an operation on May 10 against the mother-ship
to disrupt further attacks. After compelling the pirates to surrender and boarding the ship, the
Navy’s crew found Wu deceased in his cabin. An investigation found that ammunition fired from
the U.S. naval ship during the operation “inadvertently” killed him and three pirates. The naval
crew then buried the captain at sea, laid to rest in his ship, which was sunk to prevent it from
becoming a hazard to other ships. The United States expressed “regret” that the ship and its
captain were lost in the protection of shipping against piracy and sent condolences to Wu’s
family. The U.S. Navy maintained that it conducted the counter-piracy operation “in accordance
with existing rules of engagement and in compliance with international law.” However, Taiwan
persisted in protests, including a call from the Foreign Minister for U.S. compensation to Wu’s
family, which demanded $3 million. Taiwan’s government could have been trying to deflect
political criticism and demands for compensation from Wu’s family, since the government,
including the navy, apparently took few if any steps to rescue the boat’s captives while they were
held for over a year. Somali pirates captured another fishing ship from Taiwan in December 2010.
A PLA Navy frigate sailing off Somalia took credit for the release of the ship’s crew in July 2012,
though Taiwan’s Foreign Ministry attributed their release to a ransom and international assistance.
In August 2013, the LY amended a law to allow private armed guards on Taiwan’s ships. The
PLA Navy again claimed to escort a cargo ship from Taiwan in the Gulf of Aden on October 1.
Concerning maritime disputes in East Asia, there is an issue of whether Taiwan serves as a
helpful, stabilizing U.S. security partner. Taiwan has asserted itself as the ROC with sovereign
claims and has sought international attention and inclusion in bilateral or multilateral discussions.
The disputes in the South China Sea involve overlapping claims by Brunei, Malaysia, PRC,
Philippines (a U.S. ally), Taiwan, and Vietnam. In the East China Sea, PRC and Taiwan claims
conflict with those of Japan (another U.S. ally). U.S. concerns involve possible conflict between
the PRC and Japan over their competing claims to the Senkaku Islands (called Diaoyu Islands by
the PRC), which could bring U.S. involvement under the U.S.-Japan defense treaty. Taiwan,
asserting itself as the ROC, also claims the islands as Diaoyutai. On June 27, 2012, Assistant
Secretary of State Kurt Campbell confirmed at a public forum that the State Department has
discussed with Taiwan U.S. concerns about whether it would work with the PRC in the South
China Sea and that Taiwan assured that it would be careful. Another issue concerns any cross-
strait coordination also in the East China Sea. Taipei’s officials have insisted on a position of no
cooperation with the PRC. Nevertheless, even if not with explicit coordination, the parallel
actions of Taiwan have added pressure against Japan, a U.S. ally. Moreover, there were concerns
that the PRC and Taiwan took actions that militarized or escalated tensions. At another event on
December 4, Campbell said U.S. officials underscored the expectation that Taiwan not take steps
to provoke misunderstandings or tensions over the Senkaku Islands.
Congressional Research Service
19

U.S.-Taiwan Relationship: Overview of Policy Issues

President Ma has sought support for his “East China Sea Peace Initiative,” announced on August
5, 2012, that reiterated the ROC’s claim over the Senkaku (Diaoyutai) Islands and called for joint
development of resources and a code of conduct to address tension peacefully. The next month,
President Ma called for parallel bilateral talks (Taipei-Tokyo, Taipei-Beijing, and Beijing-Tokyo)
that might advance to trilateral talks. In his National Day address on October 10, Ma added that
his proposed principles also would apply in the South China Sea. There, Taiwan claims the Pratas
Islands, Paracel Islands, Macclesfield Bank, and Spratly Islands, occupying since 1956 the largest
one of the Spratly Islands (Itu Aba, or Taiping Island). Since 2000, Taiwan has stationed coast
guard instead of military personnel on the island. Still, the military has supplied weapons to and
trained the coast guard. In April 2013, Taiwan held a live-fire drill with some mortars and grenade
launchers on the island. In August, Taiwan announced a budget of $112 million for the coast
guard to build a new pier and extend a runway in 2014-2016 to support coast guard or military
ships and aircraft. The PRC’s U-shape, nine-dash line (marked as a “national border”) on its maps
of the South China Sea is a legacy of the ROC’s maps from the 1940s. An issue is whether Taipei
would withdraw or clarify the controversial line in a way consistent with international law.
Taiwan gave mixed messages. On September 25, the very day that the PRC and Japan held
diplomatic exchanges to try to cool tensions as the United States urged, Taiwan deployed 12
Coast Guard ships to escort about 60 fishing boats into the Senkaku Islands’ territorial waters.
Reportedly, Japan’s Coast Guard ships fired water cannons at Taiwan’s fishing boats in the
territorial waters, but Taiwan’s Coast Guard ships fired water cannons toward Japan’s official
ships. The ships maneuvered in proximity, raising the risk of accidental collisions or
endangerment of lives and property. However, while the media focused on the coast guard,
Taiwan also deployed military assets. According to Taiwan’s military news media, the military
deployed two Knox-class frigates, one Perry-class frigate, F-16 fighters, Mirage fighters, E2-K
Hawkeye airborne early warning aircraft, and S-70C ship-borne helicopters (a civilian version of
the UH-60 Black Hawk). The United States sold to Taiwan such weapon systems (except for the
Mirage fighters sold by France) for Taiwan’s self-defense against the PRC. The next day,
President Ma visited military units and praised the actions of the boats sailing close to the islands.
Ma said that Japan “misappropriated” the islands for 117 years and never returned them.
Congress passed the FY2013 NDAA (enacted on January 2, 2013, as P.L. 112-239) with Section
1286 (based on an amendment by Senator Jim Webb) to express the sense of the Congress
concerning the Senkaku Islands. Congress declared that the peaceful settlement of disputes in the
East China Sea requires the exercise of self-restraint by all parties in activities that would
complicate or escalate disputes and destabilize the region. The language, inter alia, stressed that
while the United States takes no position on the ultimate sovereignty of the Senkaku Islands, the
United States acknowledges the administration of Japan over the islands. Further, the legislation
reaffirmed the U.S. commitment to Japan under Article V of the Treaty of Mutual Cooperation
and Security that addressed an armed attack in the territories under Japan’s administration. On
January 18, Secretary of State Clinton added U.S. opposition to any unilateral actions that would
seek to undermine Japan’s administration and urged all parties to prevent incidents.
On January 24, 2013, Taiwan sent four Coast Guard ships to “escort” a boat close to the Senkaku
Islands, though it sailed with protestors and a TV reporter (not fishermen). Japan’s Coast Guard
responded. Taiwan’s military said that it strengthened air and naval patrols in the area. Taiwan’s
Coast Guard also warned the PRC’s maritime surveillance ships to leave the area, likely
concerned about political embarrassment if the PRC claimed to “protect” Taiwan’s ships. Still,
Taiwan already has faced the PRC’s claim of “protecting” Taiwan’s ships in the Gulf of Aden.
Nonetheless, Taiwan and Japan placed priority on concluding a long-awaited agreement over
fishing rights near the Senkaku Islands. Negotiations started in 1996. Taiwan and Japan held their
Congressional Research Service
20

U.S.-Taiwan Relationship: Overview of Policy Issues

16th round of talks in February 2009. On April 10, 2013, they held their 17th round of formal talks
and signed a bilateral agreement that defined an expanded area for joint fishing rights. The
agreement did not address the islands’ 12-nm territorial sea and set up a commission to
institutionalize discussions over disputes. The agreement was not unique but seemed to be a
model of tension-reduction. President Ma credited his “East China Sea Peace Initiative” for the
agreement and said that it did not prejudice either side’s claims to sovereignty over the islands.
The opposition DPP Chairman Su Tseng-Chang called the agreement an accomplishment. Japan
reportedly was concerned about facing Taiwan-PRC unity amid heightened tensions. On April 23,
AIT Chairman Ray Burghardt positively said that the agreement was handled well by both
Taiwan and Japan. In 2014, Secretary of State John Kerry positively said that Japan and Taiwan
showed that it is possible to promote stability despite conflicting claims.33
Aside from Japan, Taiwan faced increased tension with another democratic neighbor. On May 9,
2013, the Coast Guard of the Philippines (another U.S. treaty ally) shot at a Taiwan fishing boat
(Guang Da Xing 28), resulting in the death of a Taiwan fisherman (Hong Shi-cheng), in the
Luzon Strait between Taiwan and the Philippines. Taiwan’s initial diplomatic reaction called for
an investigation and arrests, and expressed grave concerns. However, the PRC quickly and
harshly “condemned” the “barbaric act.” This intervention likely placed pressure on Taiwan’s
leaders, who are said to fear political embarrassment if the PRC send ships to “protect” Taiwan’s
citizens or demand direct interactions with Manila under a “one China” policy. President Ma also
faced stubbornly low approval ratings and a bid for re-election as the KMT Chairman on July 20.
The State Department reacted calmly the next day by welcoming the Philippines’ pledge to hold a
full and transparent investigation along with Taiwan and by urging all sides to ensure maritime
safety and refrain from actions that could escalate tensions and undermine a diplomatic or
peaceful resolution. (Similarly, in May 2010, Taiwan had urged restraint by both South Korea and
North Korea in not escalating tension, when South Korea issued findings that its naval ship
(Cheonan) was sunk and 46 sailors were killed by North Korea two months earlier.) President Ma
initially said that Taiwan’s Coast Guard (rather than the Navy) covered the interests of fishermen.
Then on May 11, President Ma held a meeting of the National Security Council (NSC) and issued
four demands of Manila: an official apology, compensation for losses, investigation and
punishment, and negotiations over an agreement on fishing rights. Ma also issued an ultimatum
that if the Philippines failed to meet the demands in 72 hours, by midnight on May 15, Taiwan
would impose three sanctions: freezing the processing of applications of Filipino workers,
recalling Taiwan’s envoy, and requesting that Manila’s envoy return to help resolve the dispute.
On May 12 in Manila, Deputy Presidential Spokesperson, Abigail Valte, said that the Philippines’
representative in Taipei, Antonio Basilio, visited the victim’s family and “offered his apologies on
behalf of the Philippine government.” She also said that “as the Philippine Coast Guard has
stated, we express our heartfelt sorrow on the unfortunate situation that occurred during one of
the anti-illegal fishing patrols conducted by a Philippine fishery law enforcement vessel (MCS
3001) within the maritime jurisdiction (waters off the Batanes group of islands) of the Philippines
on the morning of May 9, which tragically resulted in the death of a fisherman from one of the
fishing vessels reportedly poaching in the area.” However, Taiwan protested that Valte’s statement
did not contain a formal, government-to-government apology.
Meanwhile, by May 12, Taiwan increased Coast Guard patrols and sent the Navy’s Lafayette-
class and Knox-class frigates to “protect fishermen” between the island and the Philippines. The
next day, Taiwan’s Ministry of National Defense (MND) announced that it will send a Kidd-class

33 John Kerry, “U.S. Vision for Asia-Pacific Engagement,” Honolulu, Hawaii, August 13, 2014.
Congressional Research Service
21

U.S.-Taiwan Relationship: Overview of Policy Issues

destroyer and Perry-class frigate to join the Coast Guard in drills south of Taiwan on May 16. The
Navy also said it would extend its patrol area by about 100 miles southward to the waters near the
Batanes islands of the Philippines. The State Department, on May 13, expressed regret for the
“tragic death” of the Taiwan fisherman and urged all parties to refrain from provocative actions.
Reflecting the public’s indignant nationalistic anger in the LY, Taiwan legislators across party
lines supported Ma’s demands. There was concern about violent targeting of Filipinos in Taiwan.
On May 15, President Ma held another NSC meeting, said that the Philippines failed to meet his
demands by the deadline, and ordered the implementation of the three sanctions. A Deputy
Minister of Justice said that an initial investigation by local prosecutors in Pingtung found 45
bullet holes in the boat’s cabin where the crew sought cover and indicated the “deliberate killing”
of the fisherman. Philippines President Benigno Aquino sent a “personal representative,” Amadeo
Perez, to Taiwan to apologize to the fisherman’s family and Taiwan’s people. On the night of May
15, Taiwan announced eight more sanctions (for a total of 11 measures): suspensions of normal
travel (with an alert), high-level exchanges, economic exchanges, agricultural or fisheries
cooperation, technical cooperation, talks on aviation, and visa-free treatment; and a military-coast
guard drill. The State Department expressed concern about the increase in tensions between two
neighboring democracies and U.S. partners. Taipei rejected Manila’s apology as not formal,
“nongovernmental,” and insincere. On May 16, Taiwan proceeded with the Navy and Air Force
exercise, sending a Kidd-class destroyer, a Lafayette-class frigate (with S-70C helicopters), two
Mirage 2000 fighters, Indigenous Defense Fighters, and E-2K early warning aircraft. Naval ships
sailed south of 20 degrees north latitude, the traditional line of patrol by the Coast Guard, and
entered waters around the Batanes Islands. Taiwan’s military said it did not use live ammunition.
Even as the investigations were ongoing, President Ma declared on May 17 that the shooting was
“cold-blooded murder.” PRC official media, including CCTV news programs, used the tension
and Ma’s rhetoric to condemn the Philippines and called for cross-strait actions in support of
Taiwan’s sanctions. Hackers from Taiwan and the Philippines reportedly exchanged cyber
disruptions of government websites. Taiwan’s officials called for calm treatment of Filipinos in
Taiwan, while Taiwan’s sanctions targeted Filipino workers and officials discouraged private,
people-to-people ties, including volunteers going to help in the Philippines.
On May 19, Taiwan’s Ministry of Justice reported that the fishing boat had 45 bullet holes. Based
on their Agreement on Mutual Legal Assistance in Criminal Matters, Taiwan and the Philippines
agreed to conduct “parallel investigations,” after the Philippines rejected a “joint investigation” as
violating its sovereignty. Respective investigators were in Taipei and Manila on May 27-31.
Taiwan’s investigators returned to Manila for talks on June 6-7. Reportedly, issues included the
precise location and jurisdiction of the incident (reportedly about 40 miles east of the Philippines’
northern Balintang Island), and specific charges against the Coast Guard officers.
On May 28, President Ma participated in an annual computerized military war game that focused
on crisis-management in scenarios in the East and South China Seas (not the Taiwan Strait). Ma
also announced on June 11 that the Navy and the Coast Guard will increase patrols in the South
China Sea and that “protecting fishermen” will be another major mission of Taiwan’s military.
Concerning talks on a fisheries agreement, Taiwan and the Philippines held their first preparatory
meeting in Manila on June 14, and both sides, inter alia, agreed to avoid the use of force in
patrols. In addition to their agreement on mutual legal assistance, there is another precedent for a
bilateral agreement. In 2005, the Minister and Secretary of Agriculture of Taipei and Manila,
through representatives, signed a Memorandum of Understanding to promote cooperation in
agriculture and fisheries, including helping to prevent poaching on the waters of both sides. (The
two sides later held their first formal talks in October 2013 and agreed to set up a hotline.)
Congressional Research Service
22

U.S.-Taiwan Relationship: Overview of Policy Issues

On August 7, the Philippines reported on its investigation that recommended charges of homicide
against eight Coast Guard officers and charges of obstruction of justice against four others.
Taiwan issued its report, saying that local prosecutors in Pingtung also charged the eight officers
with homicide. The Philippines’ President sent an envoy to Taiwan to convey an apology and
offer of compensation to the fisherman’s family. The next day, Taiwan lifted its sanctions.34
Meanwhile, the Senate passed S.Res. 167 (Menendez) on July 29, 2013. The resolution, inter
alia
, stated that the United States has a clear interest in encouraging and supporting nations to
work collaboratively and diplomatically to resolve disputes in the Asia-Pacific maritime domains
without coercion, without intimidation, without threats, and without the use of force. It noted that
the fisheries agreement between Japan and Taiwan could be a model for other agreements. It
urged all parties to exercise self-restraint to avoid undermining stability or escalating disputes.
“International Space” and Organizations
Taipei is a full member in some international organizations to which the PRC also belongs, such
as the Asian Development Bank (ADB) and the WTO. Still, Taiwan has sought “international
space” amid continued constraints from the PRC. Taiwan has been a full member of the APEC
forum. For the second time since initiating APEC summits in Seattle in 1993, the United States
hosted an APEC summit in 2011 in Honolulu. However, Taiwan’s president has not been able to
attend any of the APEC summits. The PRC has continued to block Taiwan’s participation at
international meetings or organizations. On November 14, 2013, Gambia ended its diplomatic
recognition of the ROC, surprising the Ma Administration, which defended its “diplomatic truce”
with the PRC (whereby Taipei and Beijing suspended vying for diplomatic relationships in a
zero-sum game). The PRC insisted that it had no prior contact with Gambia and that it would
work with Taiwan on their cross-strait ties.
The Clinton Administration’s 1994 Taiwan Policy Review promised to support Taiwan’s
membership in organizations where statehood is not a prerequisite and to support opportunities
for Taiwan’s voice to be heard in organizations where its membership is not possible. The focus
of congressional action for many years was on Taiwan’s international participation at the World
Health Organization (WHO) and the annual meetings in Geneva of its governing body, the World
Health Assembly (WHA). On April 21 and May 6, 2004, the House and Senate passed H.R. 4019
and S. 2092 in support of Taiwan’s efforts to gain observer status in the WHO and to make it an
annual requirement to have an unclassified report from the Secretary of State on the U.S. plan to
help obtain that status for Taiwan. One implication of this legislative change was the end of
annual congressional statements and votes on this issue. In signing S. 2092 into law (P.L. 108-
235) on June 14, 2004, President Bush stated that the United States fully supported the
participation of Taiwan in the work of the WHO, including observer status.

34 Author’s observations, and numerous official and news reports including Taipei Economic and Cultural Office
(TECO) and the Manila Economic and Cultural Office (MECO), Memorandum of Understanding on Agricultural and
Fishery Cooperation, September 30, 2005; Taiwan Ministry of Foreign Affairs (MOFA), May 9; Xinhua, May 9; PRC
Ministry of Foreign Affairs, May 10; CNA, May 10; South China Morning Post, May 11; President Ma’s office, May
11; Taiwan MOFA, May 11; GMA News, May 12; Taiwan MOFA, May 12; CNA, May 12; CNA, May 13; Taipei
Times
, May 14; Taipei Times, May 15; President Ma’s office, May 15; CNA, May 15; GMA News, May 15; CNA, May
15; CNA, May 16; Taiwan, “Non-Paper,” May 16; Taiwan’s MAC, May 16; China Post, May 17; CNA, May 17;
Philstar, May 18; Global Times, article and editorial, May 18-19; CNA, May 19; Philstar, May 20; Bloomberg, May
21; Taiwan MOFA, May 22; Philstar, May 27; CNA, May 27; CNA, May 28; Taipei Times, May 29; Taiwan News,
May 31; Inquirer, May 31; CNA, June 6; GMA News, June 6; Taipei Times, June 12; CNA, June 15, 2013; Philstar,
August 7, CNA, August 7, Taiwan’s MOFA, Taiwan Today, August 7, Philstar, August 8, and CNA, August 8, 2013.
Congressional Research Service
23

U.S.-Taiwan Relationship: Overview of Policy Issues

President Ma decided to be more flexible than his DPP predecessor in pressing Taiwan’s bid to
rejoin the United Nations (U.N.), which it left in 1971 (as the ROC). On August 14, 2008, Taiwan
submitted instead a letter (via some countries with which Taiwan has diplomatic relations) to
allow Taiwan to “participate meaningfully” in U.N. specialized agencies.35
Only after Ma Ying-jeou was inaugurated as President in May 2008 did the WHO in January
2009 include Taiwan in the International Health Regulations (IHR). At the WHA in May 2009,
Taiwan’s Minister of Health participated, as an observer, for the first time since the ROC lost
membership in the U.N. However, there have been concerns that the invitation had required the
PRC’s approval, came through a WHO-PRC memorandum of understanding (MOU), and was ad
hoc (not routine for every year or only for a KMT President). Indeed, in its required report
submitted to Congress in April 2010, the State Department reported that the WHO invited Taiwan
to attend the 2009 WHA after the PRC “agreed to Taiwan’s participation.” Moreover, in May
2011, a secret WHO Memorandum (dated September 14, 2010) came to light in Taiwan, showing
that the WHO had an “arrangement with China” to implement the IHR for the “Taiwan Province
of China” (instead of “Chinese Taipei”). At the WHA on May 17, 2011, Secretary of Health and
Human Services Kathleen Sebelius protested to the WHO, saying that no organization of the U.N.
has a right to unilaterally determine the position of Taiwan.36
In its April 2014 report to Congress on Taiwan in the WHO, the State Department stressed that
the unresolved problem of nomenclature continued to hamper Taiwan’s effective implementation
of the IHR and that the WHO’s communication with Taiwan via the WHO Legal Counsel is
inconvenient and limiting. The WHO first clears its messages (meant for Taiwan) with Beijing,
resulting in delays. The report said that the United States is concerned about the WHO’s
restrictions on Taiwan’s meaningful participation in the WHO’s technical bodies, which remains
unsatisfactory. The State Department stated that the inconsistent and arbitrary constraints on
Taiwan’s participation in the WHO limit Taiwan’s ability to deal with health emergencies.
Deputy Assistant Secretary of State David Shear stated in March 2010 that “the United States is a
strong, consistent supporter of Taiwan’s meaningful participation in international organizations.”
He also stated that “Taiwan should be able to participate in organizations where it cannot be a
member, such as the World Health Organization, the International Civil Aviation Organization,
and other important international bodies whose activities have a direct impact on the people of
Taiwan.” Taiwan has sought status as an observer in the International Civil Aviation Organization
(ICAO) and U.N. Framework Convention on Climate Change (UNFCCC). Taiwan’s airlines
(China Airlines, Eva Air, and TransAsia Airways) are members of the International Air Transport
Association (IATA). Taiwan’s Flight Safety Foundation provides indirect communication between
domestic aviation authorities and airlines and the ICAO based in Montreal. In 2011, Taiwan
joined the Civil Air Navigation Services Organization (CANSO), which is an observer in ICAO.
Many believe that Taiwan’s direct communication with ICAO would enhance international
aviation security and safety. In July 2013, President Ma said that over 1.3 million flights pass
through Taiwan’s controlled airspace each year. Taiwan’s challenges include justifying the
practical gains, offering contributions at technical meetings, and gaining PRC support.

35 United Nations General Assembly, A/63/194, “Need to Examine the Fundamental Rights of the 23 Million People of
the Republic of China (Taiwan) to Participate Meaningfully in the Activities of the United Nations Specialized
Agencies,” dated August 22, 2008.
36 The interpretation of Taiwan as a “province of China” is contrary to the U.N.’s own General Assembly Resolution
2758 of 1971, which “restored” the legal rights of the PRC in the U.N. and expelled “the representatives of Chiang Kai-
shek” but did not mention Taiwan.
Congressional Research Service
24

U.S.-Taiwan Relationship: Overview of Policy Issues

While the State Department initially stopped short of publicly supporting Taiwan’s observer
status in ICAO, Congress has supported this stance in passing legislation since 2010. On June 18
and 19, 2013, the House and Senate, respectively, passed H.R. 1151 (Royce) and S. 579
(Menendez), to direct the Secretary of State to develop a strategy to obtain observer status for
Taiwan at ICAO. The House passed H.R. 1151 (by 424-0), after Representatives Royce,
Faleomavaega, Ros-Lehtinen, and Green spoke in favor. The Senate passed H.R. 1151 (by
unanimous consent) on June 27. President Obama signed the bill into law (P.L. 113-17) on July
12, supporting Taiwan’s participation at ICAO. On August 28, the State Department submitted a
report as required by Section 1(c) of the legislation. The State Department told Congress of U.S.
support for “observer status” for Taiwan in all of the meetings of ICAO. The report pointed to the
ICAO Council, which meets regularly, in contrast to the ICAO Assembly, which meets triennially.
The State Department noted that U.S. support for Taiwan is consistent with the “one China”
policy and the TRA. On September 13, AIT welcomed the ICAO Council’s President’s invitation
to Taiwan’s civil aviation officials to participate at the 2013 ICAO Assembly as his “guests.”
However, Taiwan did not become an “observer” at the ICAO Council or Assembly, and the
invitation seemed ad hoc (for that meeting). On September 20, Chairman Royce of the Foreign
Affairs Committee wrote a letter to the ICAO’s Secretary General to express concerns that ICAO
denied direct accreditation to Taiwan’s reporters. (They later had to join Taiwan’s delegation.)
Reportedly based on an idea proposed by the PRC and announced by its Civil Aviation
Administration, Taiwan attended the ICAO Assembly as a “guest” from September 24 to October
4 in Montreal, Canada. The State Department issued a statement on September 24 to welcome
ICAO’s invitation to Taiwan and attributed the development to “international cooperation” and
the support of ICAO and its members, rather than China’s role. At a hearing of the Senate Foreign
Relations Committee on February 4, 2014, in answer to Senator John Barrasso, the nominee to be
ambassador to ICAO supported Taiwan’s observer status in the ICAO Council.37
Aside from various bilateral or multilateral negotiations that can be protracted and unpredictable,
some analysts have argued that Taiwan could take unilateral steps to expand its international
space and enhance its security. Taiwan could adjust its policies to be an attractive commercial
center. U.S. businesses have stressed that Taiwan could be a prime location for investments.38
Arms Sales and Other Security Assistance
The Defense Department has reported to Congress in annual reports on the PLA that the balance
of forces across the Taiwan Strait has continued to shift to the PRC’s favor. Moreover, the
Secretary’s report of March 2009 told Congress that it was no longer the case that Taiwan’s Air
Force enjoyed dominance of the airspace over the strait. Since 2001, Taiwan has discussed the
acquisition of diesel-electric submarines. Since 2006, Taiwan has been unsuccessful in trying to
submit a formal request to procure new F-16C/D fighters. One policy issue concerns whether
President Obama denied or delayed arms sales out of concern about military exchanges and other
aspects of the overall relationship with the PRC. The Administration maintains that it adheres to
the TRA. While the PRC has not warned Taiwan of consequences in continuing to seek U.S.
weapons, the PRC has claimed to “suspend” many military meetings with the United States.
President Obama notified Congress on January 29, 2010, of major arms sales to Taiwan: five
programs with a total value of $6.4 billion. Again submitting notifications on one day, President
Obama proposed on September 21, 2011, three major arms sales programs with a total value of

37 Michael Lawson also testified that ICAO is the only forum that sets global standards for international civil aviation.
38 Dan Blumenthal, Rupert Hammond-Chambers, Michael Mazza, Gary Schmitt, and Derek Scissors, “Taiwan, Inc.,”
AEI, October 2012; and American Chamber of Commerce (AmCham) in Taipei, “Taiwan White Paper,” June 2013.
Congressional Research Service
25

U.S.-Taiwan Relationship: Overview of Policy Issues

$5.9 billion, including upgrades for Taiwan’s existing F-16A/B fighters. Like Bush, President
Obama has not notified Congress of the submarine design program (the only one pending from
decisions in 2001) and has not accepted Taiwan’s formal request for new F-16C/D fighters.
The United States has concerns that Taiwan under President Ma has not given sufficient priority
to investing in defense. On October 3, 2013, Deputy Assistant Secretary of State Kin Moy urged
Taiwan to increase its defense budget to a level commensurate with its security challenges.
Taiwan cut its defense budget in 2009, 2010, and 2011 until an increase in 2012. The 2013 budget
was a small drop from that in 2012. Taiwan’s 2014 defense budget faced a small cut (at US$10.4
billion) and makes up 2.0% of GDP. President Ma has failed to reach a bipartisan KMT-DPP goal
of raising defense budgets to 3% of GDP, even as Taiwan’s military shifts from conscripts to
professional personnel. Concerns increased about whether Taiwan’s military is hollowing out,
partly due to problems in recruitment and retention while shifting to a volunteer force by 2015
with insufficient investment and commitment by the leadership. On July 20, 2013, about 30,000
demonstrators protested at the MND, after the death of a corporal on July 4 reportedly from
heatstroke and abuse while in detention. The incident triggered another protest on August 3 by an
estimated 100,000-250,000 people against the government’s handling of this and other cases. By
July, MND reached only 15% of its recruitment goal for the year (4,290 out of 28,531 recruits).39
In September, MND delayed full conversion to a volunteer force for two years, or by 2017.
In the 113th Congress, Senator John Cornyn, who urged the Administration to approve a sale of F-
16C/D fighters to Taiwan, issued a statement on February 8, 2013, at the Heritage Foundation. He
said that the fighters have become increasingly important and also highly symbolic for Taiwan as
it has faced China’s aggressive military modernization and belligerent attitude. However, he
noted his disappointment that Taiwan seemed to have backed off its pursuit of new F-16 fighters.
On February 26, Senator Daniel Coats introduced S. 12, the Naval Vessel Transfer Act of 2013, to
authorize the transfer of excess U.S. Navy Perry-class frigates to Taiwan, Mexico, and Thailand.
Representative Robert Andrews wrote a letter, dated June 4, to Defense Secretary Chuck Hagel,
asking about possible U.S. support for Taiwan’s indigenous submarine program. The Defense
Department’s response acknowledged that the United States has reviewed with no decision since
2008 Taiwan’s request for a submarine design (without clarity on the status) and noted that
Taiwan has not requested technical assistance for its own submarine program.40 When asked at a
hearing of the House Foreign Affairs Committee on March 14, 2014, about any defense systems
that Taiwan has requested but the United States has not decided to offer, Deputy Assistant
Secretary of State Kin Moy testified that he is not aware of such systems.
The House, on June 14, 2013, passed H.R. 1960 (McKeon), the NDAA for FY2014, with Section
1265 that would have directed the President to sell 66 new F-16C/D fighters. The Senate Armed
Services Committee’s report of June 20 for the NDAA, S. 1197, extended the deadline to July 15,
2013, for the Defense Department to brief Congress on Taiwan’s air power and directed the
department to submit a classified report on Taiwan’s air force by December 1. (The conference
report for the NDAA for FY2013 required the briefing on Taiwan’s air force by April 15, and it
took place on July 17.) On December 10, the House-Senate agreement that reported on the
FY2014 NDAA did not include Section 1265 but called on the President to continue to take steps
to enable Taiwan’s air force to contribute to a “sufficient” self-defense capability. On January 3,
2014, the Pentagon submitted the classified report on Taiwan’s air force.

39 Taiwan News, July 20; CNA, July 21, 2013; CNA, August 20, 2013.
40 Representative Robert Andrews, letter to Secretary of Defense Chuck Hagel, June 4, 2013; and Under Secretary of
Defense James Miller, letter to Representative Andrews, June 23, 2013.
Congressional Research Service
26

U.S.-Taiwan Relationship: Overview of Policy Issues

On August 1, the House Foreign Affairs Committee approved H.R. 419 (Ros-Lehtinen), the
Taiwan Policy Act of 2013. The bill, inter alia, would seek to strengthen Taiwan’s defense by
authorizing a number of arms sales, acceptance of Taiwan’s letter of request for F-16C/D fighters,
and a sale of Perry-class frigates as Excess Defense Articles (EDA).
Representative Michael McCaul sent a letter to Defense Secretary Hagel on September 5, 2013,
asking about adherence to the TRA and Six Assurances, given a claim by the PLA’s Director of
the Foreign Affairs Office that visiting PRC Defense Minister Chang Wanquan and Secretary
Hagel discussed a “working group” on arms sales to Taiwan. (Hagel did not say there would be
such a working group in the press conference.) The next month, Under Secretary of Defense for
Policy James Miller replied that the United States does not consult with China before deciding on
arms sales to Taiwan and did not agree to do so when Hagel met with Chang. Miller noted
adherence to the TRA but did not explicitly cite the Six Assurances.
On October 21, Representative Randy Forbes led eight Members to send a letter to Secretary
Hagel, urging him to invite Taiwan’s military to participate in RIMPAC 2014 near Hawaii, after
the United States invited the PLA Navy to participate at that multinational maritime exercise.41
Miller replied on November 16 that the U.S. military has included Taiwan in an exercise in
Hawaii to deal with hurricanes (called MAKANI PAHILI) and decided to work with Taiwan’s
military at events other than RIMPAC (asserting no link to the invitation to the PLA). The Senate
Foreign Relations Committee reported S. 1683 (Menendez) on November 14, a bill to authorize
the President to transfer excess U.S. Navy Perry-class frigates to Taiwan (by sale), Mexico,
Thailand, and Pakistan, and for other purposes. On November 20, the House Foreign Affairs
Committee approved H.R. 3470 (Royce) which, inter alia, would authorize the transfers of the
frigates to Taiwan (by sale), Mexico, and Thailand. On November 21, Senator Menendez attached
the language to authorize transfers of frigates as a subsection called “Naval Vessel Transfer and
Security Enhancement Act of 2013” as an amendment on embassy security intended to amend the
FY2014 NDAA, S. 1197. Also, Senator Coats submitted language intended to amend S. 1197, to
authorize the President to transfer excess Perry-class frigates to Mexico, Thailand, and Taiwan.
On November 14, Senator Coats submitted an amendment intended to be proposed by him to S.
1197 to state that Taiwan should be invited to RIMPAC 2014 to help its proficiency in HA/DR.
The FY2014 NDAA (P.L. 113-66) did not include language on Taiwan. On April 7, 2014, the
House agreed by voice vote to pass H.R. 3470, which incorporated H.Res. 494 and renamed the
Taiwan Relations Act Affirmation and Naval Vessel Transfer Act of 2014.
Taiwan expressed concern about whether the cost of its F-16A/B fighter upgrade program would
increase after the U.S. Air Force decided not to request funds in its FY2015 budget for the
Combat Avionics Programmed Extension Suite (CAPES) program to upgrade U.S. F-16 fighters.
Deputy Assistant Secretary of State Kin Moy testified to Congress on March 14, 2014, that a
decision on the U.S. CAPES program would not have a significant impact on Taiwan’s F-16
upgrade program and that funding for Taiwan’s F-16 upgrades are covered by the U.S.-Taiwan
agreement on Taiwan’s upgrade program.42
Representatives Forbes and Colleen Hanabusa introduced on April 28 the Asia-Pacific Region
Priority Act, H.R. 4495, with Section 204 to require a report by April 1, 2016, from the Defense
Secretary on the posture and readiness of Taiwan’s maritime capabilities and to express the sense
of Congress that the U.S. Navy should invite Taiwan to participate in RIMPAC. The reporting

41 Letter signed by Representatives Randy Forbes, Mike McIntyre, Rob Wittman, Madeleine Bordallo, Steve Chabot,
Eni Faleomavaega, Michael McCaul, and Robert Brady, to Secretary of Defense Charles Hagel, October 21, 2013.
42 House Foreign Affairs Committee, Hearing on “The Promise of the Taiwan Relations Act,” March 14, 2014.
Congressional Research Service
27

U.S.-Taiwan Relationship: Overview of Policy Issues

requirement was incorporated as Section 1236 of H.R. 4435, FY2015 NDAA, which the House
passed on May 22. Also, Section 1240A states that the President shall sell no fewer than 66 F-
16C/D fighters to Taiwan. Representative Forbes introduced language in the House Armed
Services Committee’s report on H.R. 4435 (from the mark-up by the Subcommittee on Strategic
Forces) to direct the Missile Defense Agency to report by October 1, 2014, on any benefits and
associated costs and security requirements of integrating Taiwan’s early warning radar with other
U.S. missile defense and sensor systems to improve U.S. missile defense capabilities.
The Senate Armed Services Committee introduced on June 2 its bill for the FY2015 NDAA, S.
2410
(Levin), with Section 1212 to express the sense of the Senate that both the PRC and Taiwan
should have the opportunity to participate in the HA/DR parts of RIMPAC and other exercises.
On June 26, Senator Coats submitted amendments intended to be proposed to S. 2410 to
authorize Taiwan to fly C-130 transport aircraft to and from Guam, and to authorize the Navy to
transfer excess vessels to Taiwan. Senator Menendez submitted an amendment, on July 24,
intended to be proposed to S. 2410 on embassy security, foreign assistance, and arms exports,
including authority to transfer excess Perry-class frigates to Mexico (by grant) and Taiwan (by
sale). On September 18, Senator Rubio submitted an amendment intended for S. 2410 to
authorize the transfer of Perry-class frigates to Mexico, Thailand, and Taiwan. (Also see CRS
Report RL30957, Taiwan: Major U.S. Arms Sales Since 1990, by Shirley A. Kan.)
Visa Waiver Program (VWP)
Taiwan sought inclusion in the U.S. Visa Waiver Program (VWP), which eliminates some visa
requirements for qualified countries, allowing their citizens to make temporary visits without first
obtaining a visa. VWP countries must meet certain criteria, such as offering reciprocal privileges
to U.S. citizens, having machine-readable passports, and having a low non-immigrant refusal rate.
The Ma Administration has stressed visa waiver status as a benefit for Taiwan’s travelers, a
symbol of support for his policies, and a step to support Taiwan’s international stature. Mariko
Silver, Acting Assistant Secretary of Homeland Security for International Policy, visited Taiwan
in April 2010 and welcomed Taiwan’s adoption of e-passports and looked to Taiwan’s resolution
of technical security and a new requirement for in-person applications for passports to prevent
fraud. The refusal rate for Taiwan’s applicants of U.S. non-immigrant visas was at 2.2% in 2010,
better than the 3% standard for the VWP. In late 2010, Taiwan announced that it would sign three
relevant agreements with the United States to exchange information on stolen or counterfeit
passports, on terrorists, and on combating crime. To prevent fraud, Taiwan started on July 1,
2011, a new system to require first-time applicants for passports to apply in person. One
implication of Taiwan’s gaining visa waiver status was that approximately $15 million would be
needed to offset visa processing fees lost per year to AIT (starting in FY2013). On December 22,
2011, the State Department announced the nomination of Taiwan as a candidate for the VWP. The
Department of Homeland Security then reviewed Taiwan’s candidacy, including through a visit to
Taiwan in March 2012 (vs. the higher-profile announcement of candidacy). Once Taiwan was
included in the VWP, only Taiwan’s e-passports became eligible. Another issue for resolution
concerned Taiwan’s category of passports issued to “ROC compatriots” whom Taiwan has not
accepted for repatriation or given the right of residency (with questions about their true
citizenship). On October 2, 2012, the Secretary of Homeland Security designated Taiwan in the
VWP, effective on November 1. Taiwan’s citizens may travel to the United States for business or
tourism for up to 90 days without a visa. Taiwan became the 37th country to join the VWP. In
2013, about 385,000 visitors from Taiwan contributed $1.4 billion to the U.S. economy. After the
Congressional Research Service
28

U.S.-Taiwan Relationship: Overview of Policy Issues

United States included Taiwan in the VWP, visits by Taiwan’s travelers or tourists to the United
States increased by 33% from 2012 to 2013. Taiwan was the 20th largest source of visitors.43
Other options could include Taiwan’s inclusion in the Department of Homeland Security’s
Trusted Traveler and Trusted Trader programs. The Department’s Deputy Assistant Secretary
Mark Koumans visited Taipei in December 2012. In his speech on supply chain security,
Koumans said that increased security can help facilitate (rather than impede) travel and trade.
Extradition Treaty
Taiwan asked for an extradition treaty or agreement, and negotiations started in 2010, involving
the Departments of Justice and State. Taiwan reportedly sought about 70 fugitives suspected of
being in the United States. In August 2013, President Ma Ying-jeou visited Saint Kitts and Nevis
and witnessed the signing of an extradition treaty (the ROC’s 11th such treaty). Taiwan had
proposed an extradition treaty with the United States as early as 1979. In December 1992, the
Senate Governmental Affairs Subcommittee on Investigations recommended negotiation of an
extradition agreement with Taiwan as soon as possible. A precedent for congressional
consideration could be the U.S.-Hong Kong extradition agreement.44 Aside from an extradition
treaty or agreement, another option could be authorizing statute passed by Congress. (Also see
CRS Report 98-958, Extradition To and From the United States: Overview of the Law and Recent
Treaties
, by Michael John Garcia and Charles Doyle.)
Human Rights and Rule of Law
The TRA reaffirmed that the preservation and enhancement of the human rights of all of Taiwan’s
people are U.S. objectives. President Ma has contended that he has valued democracy, freedom,
and human rights. However, in early November 2008, Taiwan’s police allegedly used heavy-
handed measures against protestors in providing security for an official from Beijing, ARATS
Chairman Chen Yunlin. Freedom House called for an independent investigation. Taiwan sent
officials to Washington to defend the police, acknowledging a U.S. role. Concerned observers say
that Taiwan under the KMT has not done enough to promote those values in the PRC or judicial
reforms in Taiwan. Some have questioned whether the Ma Administration has downplayed
democracy promotion by the Taiwan Foundation for Democracy (TFD) and has been less
welcoming to those attacked by Beijing, such as political dissidents, Tibetan leader Dalai Lama,
Uighur leader Rebiya Kadeer, and Falun Gong practitioners.
Trials of former President Chen Shui-bian (who has been sentenced to prison for 20 years in
ongoing cases for corruption but also found not guilty of other charges) heightened scrutiny of
pre-indictment and pre-trial detentions, prosecutorial leaks, other misconduct, transparency of
judicial procedures, and prisoners’ freedom of speech. On November 12, 2008, which happened
to be the day that ex-President Chen was first detained on charges of corruption, AIT Director
Stephen Young expressed the U.S. expectation that Taiwan’s judicial process be “transparent, fair,
and impartial.” Jerome Cohen, a legal scholar at NYU’s School of Law who was Ma’s professor
at Harvard, has written critiques of Taiwan’s judicial system as well as commended Ma’s signing

43 Data from the Department of Commerce, International Trade Administration, National Travel and Tourism Office.
44 Senate Governmental Affairs Subcommittee on Investigations, a report on “The New International Criminal and
Asian Organized Crime,” S. Prt. 102-129, December 1992; Senate Foreign Relations Committee, report on the “U.S.-
Hong Kong Extradition Treaty,” Exec. Rept. 105-2, August 19, 1997; Senate Foreign Relations Committee, report on
the “Agreement with Hong Kong on the Transfer of Sentenced Persons,” Exec. Rept. 105-24, October 14, 1998.
Congressional Research Service
29

U.S.-Taiwan Relationship: Overview of Policy Issues

of the instruments of ratification of the International Covenant on Civil and Political Rights and
International Covenant on Economic, Social, and Cultural Rights. He wrote that the prosecution
of former President Chen was not a political vendetta by the KMT but showed that no one is
above the law in Taiwan. Still, Cohen criticized judicial officials for a skit on “Law Day” in 2009
that mocked the detained Chen and restraints on Chen’s ability to defend himself. In a meeting
with Professor Cohen in May 2010, President Ma said that judicial officials took actions to reduce
human rights concerns about Taiwan’s detention system.45 In his second inaugural address in May
2012, Ma acknowledged the continued need for judicial reform.
A number of U.S. and foreign former officials, activists, and academics have written several open
letters to President Ma to express concerns that Taiwan’s judiciary lacked political independence
or objectivity. A letter of April 11, 2011, in the Taipei Times asked whether legal charges against
17 former DPP officials of the Chen Administration for allegedly failing to return about 36,000
documents were “politically motivated” in coming out three years after the transition in 2008 and
during electoral campaigns. On June 30, 2011, prosecutors indicted Lee Teng-hui, who was
president from 1988 to 2000, for allegedly diverting $7.8 million in diplomatic funds for the
establishment of the Taiwan Research Institute in the 1990s. Some foreign observers questioned
whether the legal action was timed to affect Lee’s support for the DPP in the elections in January
2012 and noted the lack of prompt follow-up.46 The first hearing on Lee’s case was on June 22,
2012, but he could not attend until another hearing on August 10. On November 15, 2013, the
Taipei District Court acquitted former president Lee of embezzlement. In contrast, a high-profile
case against a ruling KMT politician, Lin Yi-shih, raised controversy, when the Taipei District
Court, on April 30, 2013, found him not guilty of corruption and sentenced him to seven years in
prison. Lin was charged with using his positions as a legislator and then Secretary-General of the
Executive Yuan (Cabinet) to demand payments for contracts with a state-owned corporation. The
Control Yuan (the government branch responsible for accountability) impeached Lin in June.47
In March-April 2012, some Members in Congress (including Representatives Steve Chabot, Dan
Lungren, and Ed Royce) raised concerns about Chen’s prison conditions and health. In July,
Representatives Robert Andrews and Lungren submitted a report by medical professors at the
University of California at Davis to the Tom Lantos Human Rights Commission, raising
questions about the conditions of ex-President Chen in prison (confined in a small cell) and
calling for his medical parole.48 Chen’s conditions in prison reportedly improved in June.
However, starting in September 2012, Chen’s medical condition deteriorated, requiring extended
guarded stays in hospitals. Taiwan’s Ministry of Justice denied that political bias influenced
Chen’s medical care. In October, Representative Howard Berman wrote to President Ma, calling
for Chen’s release from prison on humanitarian grounds. Also, Senator Sherrod Brown wrote to
the AIT Director in Taipei, asking him to visit Chen. Jerome Cohen met with Chen at a hospital in
Taipei in December, showing concern about this medical treatment while declining to call for
Chen’s medical parole. In January 2013, Representative Steve Chabot added his support for
Chen’s medical parole. Representative Andrews wrote a letter on March 1 to Secretary of State
John Kerry, strongly urging his department to take a stance on the treatment of Chen. Two weeks
later, the State Department responded that AIT did raise concerns about Chen’s health with

45 Jerome Cohen’s articles published in South China Morning Post, Hong Kong, May 28, 2009, June 11, 2009,
September 17, 2009, October 15, 2009, January 20, 2010; and Apple Daily, October 9, 2009.
46 For example, see another open letter to President Ma Ying-jeou in the Taipei Times on August 2, 2011.
47 Taiwan News, May 1, 2013; Taipei Times, May 1, 2013; Central News Agency, June 11, 2013.
48 U.S. Citizen Medical Team (Joseph Lin, Ken Yoneda, and Charles Whitcomb), “The Effects of Incarceration on the
Mental and Physical Health of Former President Chen Shui-bian of Taiwan,” July 12, 2012.
Congressional Research Service
30

U.S.-Taiwan Relationship: Overview of Policy Issues

Taiwan’s officials. On April 19, the Justice Ministry suddenly moved Chen from the Veterans
General Hospital in Taipei to Taichung Prison’s Pei-Te Hospital (in the central city of Taichung),
with a special area for Chen with a garden. The Justice Ministry argued that it treated Chen
legally and appropriately as a prisoner, medical patient, and former head of state. The DPP
continued to call for Chen’s medical parole. On May 2 in Taiwan, accompanied by AIT officials,
Representatives Chabot and Eni Faleomavaega (of the House Foreign Affairs Subcommittee on
Asia and the Pacific) visited Chen at Taichung Prison’s hospital. Mr. Chabot said he offered his
personal view about Chen’s human rights. Visitors who saw Chen said his health declined.49
On February 27, 2014, the State Department issued its worldwide human rights reports for 2013,
reporting that Chen attempted to hang himself in April and June 2013 at the Taichung Prison, but
the Ministry of Justice initially denied the suicide attempt in April. The report pointed out that
Taiwan’s principal human rights problems focused on exploitation of migrant workers by fishing
firms, exploitation of domestic workers by brokerage agencies, and official corruption (including
in the judicial system). The State Department also reported that the right to strike was highly
regulated and that there was evidence of forced labor and violations of maximum working hours.
Concerning human rights in the PRC, in November 2012, Taiwan’s Foreign Ministry denied a
visa to the Tibetan Dalai Lama to attend a conference in Taipei. Opposition DPP lawmakers
criticized the decision that simply cited “bad timing.” Taiwan did not issue a policy statement. In
contrast, the State Department confirmed on November 30 that the Assistant Secretary for Human
Rights Affairs met with relatives of Tibetans who self-immolated in the Tibetan area. The U.S.
Special Coordinator for Tibetan Issues then issued a statement on December 5. The United States
expressed concern about violence and increasing self-immolations in the Tibetan areas, called on
the PRC government to address policies, including use of force, that exacerbated the tensions,
expressed hope that the self-immolations will end, urged the PRC to allow reporters, diplomats,
and other observers to the Tibetan areas, and called on the PRC to talk with the Dalai Lama
without preconditions. Taiwan last allowed the Tibetan leader and Nobel Peace Prize winner to
visit in 2009, in the wake of a major typhoon. Congress and President Bush had awarded in the
U.S. Capitol the Congressional Gold Medal to the Dalai Lama in October 2007.
Taiwan allowed a visit by PRC activist Chen Guangcheng, who arrived in Taipei on June 24,
2013. The well-known blind human rights activist fled detention in the PRC to the American
Embassy, which negotiated his release in May 2012 for a one-year fellowship at NYU. Chen said
that Taiwan presented a model in fighting for democracy. However, President Ma declined to
meet with Chen, though Jerome Cohen accompanied him and his visit lasted 18 days.
Democratic Elections (KMT and DPP)
The United States has watched Taiwan’s elections, because of their critical implications for U.S.
interests in democracy and security. Congressional oversight has covered an issue of whether the
Administration has kept a neutral stance with respect to Taiwan’s political parties. Taiwan held
elections on January 14, 2012, with the first combined presidential and legislative elections on a
single day. Beijing seemed to favor incumbent President Ma Ying-jeou. KMT President Ma won
re-election with 51.6% of the votes, a victory of 6 percentage points over DPP Chairwoman Tsai
Ing-wen, who won 45.6% of the votes. Voter turnout was lower than in previous elections but still
considered high (74% out of 18 million eligible voters). Out of 113 seats in the Legislative Yuan
(LY), the KMT won the majority with 64 (down from 72 seats), and the DPP won 40 seats (up

49 Chabot quoted in “U.S. Politicians Concerned About A-Bian,” Taipei Times, May 4, 2013; Taiwan Communique,
November/December 2013, pro-DPP newsletter from the Formosan Association for Public Affairs (FAPA).
Congressional Research Service
31

U.S.-Taiwan Relationship: Overview of Policy Issues

from 32). Minor parties and an independent won the remaining 9 seats. The State Department
congratulated Taiwan for a free and fair election. On August 2, 2012, Senator Lisa Murkowski
introduced S.Res. 542 to express the sense of the Senate that the United States should continue to
support democracy and human rights in Taiwan after the elections. The bill noted a report by a
group of international observers that found the elections were “mostly free but only partly fair.”50
Some observers attributed the DPP’s loss to Tsai’s lack of clarity and certainty about how she
would sustain the status quo and a stable cross-strait relationship. She tried to balance appeals to
the pro-independence base and to moderate voters who supported continued cross-strait economic
engagement. While Tsai proposed a “Taiwan Consensus,” the KMT touted “peaceful
development” under the KMT-CPC’s “1992 Consensus.” Instead of a clearer stance on the ECFA
signed in June 2010 amid a dwindling number of DPP-led protestors, Tsai said vaguely that she
would use “democratic procedures” to continue the policy.51 In October 2011, Tsai said “Taiwan
is the ROC, the ROC is Taiwan.” Tsai focused on income inequality, but Taiwan’s economic
conditions have been tied to the PRC’s economy. Rather than keeping distance from Taiwan’s
electoral politics, on December 16, 2011, CPC Politburo Standing Committee Member Jia
Qinglin warned that cross-strait talks would not continue without accepting the “1992
Consensus.” Taiwan’s major businesses with interests in the PRC parroted the “1992 Consensus.”
The DPP also attributed its loss to U.S. actions seen as favoring the KMT’s Ma. As a close U.S.
observer told the Washington Post after the election, “the administration liked the fact that
tensions had been reduced across the Taiwan Strait … and rewarded Ma.”52 While it was difficult
to determine the impact of various factors, a poll taken after the elections indicated that the most
cited concerns of voters were the economy, income gap, cross-strait ties, and social welfare.53
The DPP continues as a viable party in Taiwan’s electoral politics, with observers watching for
potential party unity and rejuvenation in leadership. After Chen Shui-bian’s eight years in office,
the DPP had suffered a significant loss in the presidential election in 2008. Nonetheless, the DPP
under Chairwoman Tsai Ing-wen rebuilt its strength and won a number of local and legislative
elections in 2009-2011. The DPP then lost to the KMT in the presidential election in 2012 but
with a smaller margin than that in 2008, and the DPP gained seats in the LY. Tsai stepped down as
the chair. Some observers have concerns about the DPP in future elections and any reversal of the
warming trend in cross-strait ties. Others have confidence about the DPP’s evolution as a party
that provides democratic checks and balance and about the voters’ choices on their status. While
the KMT stresses the ROC’s legacy that includes “one China,” the DPP pursues Taiwan-centric
policies based on a legacy of fighting for freedom and a stated priority of ties to democratic
countries like the United States and Japan. In contrast to the KMT’s touting of the “1992
Consensus,” the DPP says that cross-strait talks cannot be simply KMT-CPC deals.
President Ma did not hold a formal meeting the DPP’s chairman until a meeting with Su Tseng-
chang in April 2014. Nonetheless, both the KMT and DPP could continue to use ambiguity,
including the “1992 Consensus.” The parties could forge a greater domestic consensus about the
ROC’s name and constitution, Taiwan’s ties to the United States, Japan, the PRC, and other
countries, and protecting the way of life in Taiwan’s democratic, security, and economic interests.
No matter which party rules, Taiwan faces challenges from the PRC. The DPP and KMT could

50 On September 19, 2012, Senator Murkowski submitted to the Congressional Record the summary of the report of the
International Election Observers Mission, written by Woodrow Clark and Frank Murkowski.
51 Tsai Ing-wen’s interview with Apple Daily, Taipei, September 20, 2010.
52 Andrew Higgins, “Taiwan’s Pro-China Chief Reelected,” Washington Post, January 15, 2012, quoting Douglas Paal.
53 Chung-kuo Shih-pao [China Times], Taipei, January 16, 2012.
Congressional Research Service
32

U.S.-Taiwan Relationship: Overview of Policy Issues

clarify their approaches toward the United States and toward the PRC. One question is how the
DPP and KMT might reconcile their interpretations of the ROC Constitution, though both parties
have governed using its foundation for legitimacy and laws. The DPP and KMT use the ROC
national name, flag, and anthem. The DPP’s 1999 Resolution on Taiwan’s Future stated that
Taiwan’s constitutional name is the ROC and has jurisdiction over the islands of Taiwan, Penghu,
Kinmen, and Matsu. The KMT’s view, as Ma insisted in his second inaugural address in 2012, is
that the ROC’s sovereign territory also includes “the mainland,” but the ROC governs only
Taiwan, Penghu, Kinmen, and Matsu (small islands). In June 2014, both the KMT and DPP
stressed that Taiwan’s future is to be decided by its 23 million people, not all Chinese people.
Looking toward the presidential election in 2016, different DPP leaders have proposed ideas.
After winning the election to be the DPP’s chairman on May 27, 2012, former premier Su Tseng-
chang (at age 64) announced restoration of the DPP’s Department of “China Affairs,” among
various departments. While such a move took cross-strait policy out of “international” policy, the
approach differed from the KMT and CPC’s use of “mainland China.” Not until later (in August)
did Su set up a Department on Defense Policy. On October 4-8, former premier Frank Hsieh
became the most senior member of the DPP to visit the PRC, though on a private visit. He met
with senior officials in the PRC State Council, ARATS, and TAO. Hsieh proposed a
“constitutional consensus” (“two constitutions with different interpretations”) for the “status
quo,” instead of talking about the “1992 Consensus” (“one China with different interpretations”).
Hsieh urged the DPP to accept the ROC constitution. In November, DPP Chairman Su named
himself as the convener of the higher-level Committee on China Affairs (later set up in May 2013
with members that included Hsieh).
The DPP has reviewed its position on the PRC to reassure the United States, the PRC, other
countries, and Taiwan’s voters about the party’s intention to continue cross-strait engagement,
strengthen Taiwan’s defense, and not declare Taiwan’s de jure independence. On the eve of his
visit to the United States in June 2013, Chairman Su issued a DPP paper on defense policy. It
stressed strengthening defense against the PRC, raising the defense budget to 3% of GDP, and
cooperating with all democracies. But the DPP supported the KMT on a “military presence” in
the dispute with the Philippines, a U.S. ally, over the shooting of a Taiwan fisherman in May. Su’s
message was that Taiwan is a sovereign country that does not belong to the PRC, but he also said
that seeking independence was unnecessary and that the country’s name under the constitution is
“Republic of China.” He said that this is Taiwan’s “status quo” and what he called the “Taiwan
Consensus.” Su said that Taiwan’s relationship with the United States is the most important and
needs to be strengthened.54 A DPP legislator, Ker Chien-ming, proposed another idea on
December 26, 2013, calling for a “freeze” on the DPP’s 1991 platform on independence that
called for a “Republic of Taiwan.” On January 9, 2014, Su issued the DPP’s report on the review
of the policy on China, which reaffirmed the 1999 Resolution on Taiwan’s Future. The DPP
signaled support for continuing cross-strait economic agreements and expressed “goodwill” by
welcoming PRC spouses, students, and visitors. The DPP expressed its priorities for Taiwan’s ties
with fellow democracies, peaceful and positive interactions across the strait, and regional peace
and stability (rather than relying on the relationship with the PRC).55
On March 13, 2014, the opposition DPP released its opinion poll, showing that more of Taiwan’s
people generally favor the KMT’s approach than the DPP’s approach toward the PRC. The poll
showed that for overall policies on the PRC, 41% of participants in the poll identified with the

54 DPP, press release on Su’s remarks in New York, June 10; Su’s speech at Brookings Institution, June 13, 2013.
55 DPP, China Affairs Department, “2014 China Policy Review: Summary Report,” January 9, 2014.
Congressional Research Service
33

U.S.-Taiwan Relationship: Overview of Policy Issues

KMT’s approach, while 35% identified with the DPP’s approach. At the same time, about 69% of
those surveyed said that their most important concern in a presidential election was the handling
of the economy, while about 16% pointed to ethics, 4% pointed to domestic affairs, 4% pointed to
dealing with the PRC, and 2% pointed to unification with the PRC v. independence of Taiwan.
In May, the DPP again elected Tsai Ing-wen as the Chairperson, indicating that she likely would
be the opposition party’s presidential candidate again in 2016. In a speech on July 1, she stressed
the priority of peace and stability for Taiwan and the region. Still, the DPP is expected to clarify
its stance on how to deal with Beijing, though most voters (69%) care more about the economy.56
Restoring Trust and Resolving Disputes (Beef and Pork)
Taiwan has another window for greater attention to governance, between the local elections on
November 29, 2014, and the presidential and legislative elections in early 2016. Taiwan’s politics
have constrained U.S. influence on some priorities, particularly to relax Taiwan’s restrictions on
U.S. beef and pork. Taiwan banned U.S. beef in 2003 and 2005 out of concern about bovine
spongiform encephalopathy (BSE), or mad cow disease. In 2006, Taiwan lifted the ban but
imposed restrictions on U.S. beef. U.S. concerns include whether Taiwan abides by science-based
rules of the WTO and World Organization for Animal Health (OIE), of which Taiwan is a
member, even as Taiwan seeks U.S. support for its participation in international organizations.
In April 2009, President Ma gave a speech directed at the Obama Administration, including a
promise to open Taiwan’s market to U.S. agricultural exports, alluding to the U.S. request
conveyed to him since his inauguration day in May 2008 that Taiwan lift restrictions on U.S. beef.
In October 2009, President Ma agreed to conclude two years of negotiations on an agreement to
relax Taiwan’s restrictions on imports of U.S. beef over Taiwan’s concern about mad cow disease.
The United States maintains that U.S. beef is safe. Under the U.S.-Taiwan agreement signed on
October 22, 2009, Taiwan would have allowed bone-in beef, ground beef, and cow parts under 30
months of age without specified risk materials (skulls, spines, brains, etc.). However, both the
ruling KMT and opposition DPP complained. In what the Ma Administration admitted as a
“crisis,” Taiwan raised tension with the Obama Administration and Congress over beef. Taiwan’s
Legislative Yuan (LY) passed in January 2010 a bill to ban ground beef, parts, and risky materials
from areas with mad cow disease in the past 10 years. The U.S. Trade Representative (USTR) and
Members of Congress expressed concerns about Taiwan’s political, unscientific restrictions and
questions of safety concerning U.S. beef, unilateral abrogation of an agreement, and violations of
key principles in international trade that harmed U.S. agricultural exports. However, some U.S.
businesses questioned the freezing of TIFA talks due to one category of exports, and some
observers noted that trade talks continued with the PRC in spite of many disputes.
Taiwan then raised another dispute over beef, right before an attempted resumption of TIFA talks
expected in late January 2011. On January 15, Taiwan ordered the removal from sale of U.S. beef
with a drug to promote leanness called ractopamine, although the United States maintains that the
additive is safe. On February 17, the chairmen and ranking Members of the Senate Finance
Committee and House Ways and Means Committee (Senators Max Baucus and Orrin Hatch, and
Representatives Dave Camp and Sander Levin) wrote a letter to President Ma to express concern
that U.S. beef exports to Taiwan stopped effectively, to urge a correction, and to seek confidence
to resume the TIFA talks. On July 13, 2011, AIT expressed disappointment in Taiwan’s apparently
“political” decision to keep the ban by citing the lack of agreement at an international

56 Liu Shih-chung (of a pro-DPP think tank), “DPP Should Temper Expectations,” Taipei Times, August 17, 2014.
Congressional Research Service
34

U.S.-Taiwan Relationship: Overview of Policy Issues

commission on acceptable, maximum residue levels (MRLs) for ractopamine. Representative
Royce delivered a speech on November 12, in which he lamented that only with Taiwan (not
South Korea and Japan) has the Administration suspended overall economic talks over the
“narrow, politically-charged” dispute about beef.
With an expectation that President Ma would resolve the dispute after the January 2012 elections,
AmCham in Taipei urged Ma to put an end to the dispute before it “further damages” the
relationship with the United States. In February and March, AIT issued Fact Sheets about the
safety of U.S. beef and ractopamine, which also pointed out that Taiwan itself has established
MRLs for over 100 veterinary compounds. The Department of Commerce postponed the visit of
Under Secretary Francisco Sanchez scheduled for March 4-6, amid protests, recalls of U.S. beef,
and DPP and KMT proposals in the LY to stipulate zero-tolerance for ractopamine. President Ma
held “national security” meetings over this “crisis.” The Ma Administration then issued four
conditions for beef: safe levels of ractopamine, separate allowances for beef and pork (amid
objections from hog farmers), labeling of meats, and no imports of organs. To counter the
domestic political pressure, Ma argued that a resolution was needed for U.S.-Taiwan ties and
Taiwan’s international integration to avoid marginalization.
On March 6, 2012, Senator Chuck Grassley issued a press release stating that he was encouraged
by Taiwan’s announcement that it would allow some beef imports containing ractopamine. But he
added that there was no scientific reason for Taiwan to set residual levels of a certain additive for
beef but not pork.57 On March 15, 68 Members of Congress led by Representatives Denny
Rehberg and Ron Kind sent a letter to the Secretary of Agriculture and the USTR, objecting to
Taiwan’s protectionist trade restrictions on U.S. pork and beef. They wrote that “further toleration
of Taiwan’s unnecessary restrictions sets a dangerous precedent for the mistreatment of U.S.
products and undermines our efforts to establish objective, internationally-recognized science-
based standards for U.S. exports.”58 Then, on April 24, the Department of Agriculture found a
cow with mad cow disease, stating that it posed no risk. In the LY, some lawmakers of the ruling
KMT voted down attempts by lawmakers of opposition parties led by the DPP to ban U.S. beef
(including on April 27 and May 4, 11, and 18). A committee in the LY defeated on May 7 the
Cabinet’s proposal to allow beef with safe levels of ractopamine, leaving a potential vote in the
full LY. Meanwhile, Taiwan sent agricultural officials who arrived on May 6 in Washington and
then set up meetings with U.S. officials, associations, and beef processing sites. The officials
visited several states over 23 days and found U.S. beef to be safe.
AmCham in Taipei complained that the dispute over beef had become “heavily politicized” but
commended President Ma for doing the right thing in working on a resolution. Although the
Speaker of the LY, Wang Jin-pyng of the KMT, negotiated an agreement between the KMT and
DPP to extend the LY’s session for two weeks until June 15, 2012, in part to vote on the
Cabinet’s, or Executive Yuan’s (EY’s), amendment to the Act Governing Food Safety, the LY did
not vote by then. As KMT Chairman, Ma met with the LY’s KMT Caucus on June 7 to forge
party unity behind his proposal. Starting on June 11, DPP, TSU, and PFP opposition lawmakers
occupied the Speaker’s podium in the LY’s chamber to prevent a vote all week, targeting what
some called the “U.S. beef bill” as detrimental to food safety. The DPP’s new chairman, Su
Tseng-chang, visited the DPP legislators and supported their stance. Some DPP politicians
claimed that they were not opposing U.S. beef yet denounced “toxic” or “poisonous” beef.

57 Senator Chuck Grassley, “Taiwan Decision on U.S. Beef Imports Should Apply to Pork,” March 6, 2012.
58 Representative Denny Rehberg, “Rehberg Leads Ongoing Fight Against Unfair Trade Restrictions by Taiwan on
U.S. Pork and Beef,” March 15, 2012.
Congressional Research Service
35

U.S.-Taiwan Relationship: Overview of Policy Issues

On July 5, Representatives Edward Royce and Gerald Connolly led 10 Members of Congress to
write to President Obama to urge a resumption of the TIFA talks, while “Taiwan must take steps
to open its market to U.S. agriculture exports.”59 On the same day, the international Codex
Alimentarius Commission voted in Rome to adopt MRLs for ractopamine in beef and pork. The
DPP cited that development to announce support for international standards and sought to rebuild
trust with the United States. However, at a special session of the LY on July 25, all legislators in
the DPP Caucus voted against the bill to end the ban on ractopamine in beef. In passing the KMT-
supported bill (63-46), 40 DPP, 3 PFP, and 3 TSU legislators voted against it. While the DPP
stopped obstructing the legislative process, its vote continued to raise questions about its political
leadership and principles (professed to be in concert with Washington), when the elections were
over in January and Taiwan’s people commonly expressed satisfaction with U.S. products. The
DPP defended its stance as part of supporting its own version of the legislation, which included
language on differentiating between treatment of beef and pork, while resolving the dispute.
After the postponement of his visit in March, Under Secretary of Commerce Sanchez visited
Taipei in late October 2012. He highlighted the start on November 1 of the VWP for Taiwan’s
travelers to facilitate their visits to the United States for tourism and business. Sanchez welcomed
the news that U.S. beef was again available, a step to strengthen confidence in Taiwan as a
responsible trading partner. However, Taiwan has maintained a ban on ractopamine for pork. At a
hearing of the Senate Finance Committee on March 19, 2013, Senator Grassley expressed
concern that Taiwan has continued to “discriminate against pork” with an “unjustifiable barrier”
despite an expectation of a resolution after Taiwan’s political elections (in January 2012).

U.S. Beef and Pork Exports to Taiwan
Taiwan is a significant export market for U.S. beef. According to the U.S. Meat Export Federation, the value of U.S.
beef exports to Taiwan increased from $42 million in 2005 to $215 million in 2010. The value dropped to $199
million in 2011 and fell further to $128 million in 2012.60 But, in 2013, exports rose to $254 million, nearly double the
value over the previous year, and more than the total value of U.S. beef exports to the 28 nations of the European
Union.61 However, during the first two months of 2014, the value of U.S. beef exports to Taiwan fel by 24% over the
same period in 2013. U.S. pork exports rose from $33 million in 2005 to $38 million in 2010. They fell to $25 million
in 2011 and to $22 million in 2012. They rose to $26 million in 2013, making Taiwan the 13th largest U.S. pork export
market.62 During the first two months of 2014, U.S. pork exports to Taiwan declined by 52% over the previous year.

Economic Issues63
With a population of only 23 million people, Taiwan has evolved to become a highly developed,
dynamic, and globally competitive economy. Taiwan’s gross domestic product (GDP) on a
purchasing power parity (PPP) basis was $929 billion, making Taiwan the world’s 18th largest

59 Letter to Barack Obama from Representatives Edward Royce, Gerald Connolly, Donald Manzullo, Howard Berman,
Gary Ackerman, Steve Chabot, Walter Jones, James Moran, Renee Ellmers, and Mike Kelly, July 5, 2012.
60 U.S. Meat Export Federation, Statistics, available at http://www.usmef.org.
61 In terms of weight, U.S. beef exports to Taiwan fell from 38,681 metric tons in 2010 to 35,443 metric tons in 2011,
to 19,365 metric tons in 2012. In 2013, those exports rose to 32,045. However during the first two months of 2014,
U.S. beef exports to Taiwan were down 29% over the same period in 2013.
62 U.S. pork exports in metric tons during these periods were 20,242, 21,366, 14,693, 9,829, and 11,999, respectively.
63 Written by Wayne M. Morrison, Specialist in Asian Trade and Finance.
Congressional Research Service
36

U.S.-Taiwan Relationship: Overview of Policy Issues

economy (after Australia). Taiwan’s per capita GDP on a PPP basis (a common measurement of
living standards) was $39,700, larger than that of Japan and South Korea, and about three-
quarters the size of U.S. living standards.64
Taiwan is a major innovator and producer of information and communications technology (ICT),
broadly defined as computer hardware and software; telecommunications; and other knowledge-
based industries. According to the Taiwan government, Taiwan’s companies are the world’s
second-largest producers of ICT goods, although 83.3% of Taiwan ICT products are produced
outside Taiwan—mainly in the PRC. Numerous surveys have identified Taiwan as a major leader
in global technology. For example:
• A BusinessWeek survey of the 100 best performing global ICT companies in 2009
listed 10 Taiwan firms, four of which were among the world’s top 10 ICT firms.65
• The World Bank’s 2014 Index of Doing Business, which attempts to measure
business regulations and their enforcements in 189 economies ranked Taiwan 16th
in terms of the ease of doing business there.66
• According to the World Bank’s Knowledge Economy Index (KEI), which
attempts to measure and rank a country’s ability to generate, adopt, and diffuse
knowledge, Taiwan ranked 13th out of 145 economies in 2012.67
• According to the World Economic Forum’s (WEF), Global Competitiveness
Report 2013-2014, Taiwan ranked 12th out of 148 economies.68
• The World Economic Forum’s (WEF) Global Information Technology Report for
2013 ranked Taiwan 10th out of 144 economies in terms of preparedness to
leverage ICT advances for measures the preparedness of an economy to use ICT
to boost competitiveness and well-being.69
• The Heritage Foundation’s 2014 Index of Economic Freedom ranked Taiwan as
the 17th out of 178 economies.70
Taiwan’s Global Trade
Taiwan’s economy is highly dependent on trade. In 2013, Taiwan’s exports of goods and services
were equal to 72% of GDP. As indicated in Figure 1, Taiwan’s GDP growth is strongly linked to
export growth. From 2005 to 2012, net exports (exports minus imports) were the largest
contributor to Taiwan’s annual GDP growth. The global economic slowdown that began around
2008 caused Taiwan’s economy to slow considerably. From 2005 to 2007, Taiwan’s real GDP
growth averaged 5.4%. Real GDP growth slowed to 0.7% in 2008 and fell by 1.8% in 2009. Real
GDP growth surged by 10.8% in 2010, but over the past three years, it has averaged only 2.6%.
Taiwan’s 2013 merchandise exports were $305 billion, making it the world’s 20th-largest exporter
(after India), while its imports totaled $270 billion, making it the world’s18th-largest importer

64 Economist Intelligence Unit.
65 Bloomberg Businessweek, The InfoTech 100, 2009, http://www.businessweek.com/interactive_reports/
it100_2009.html.
66 See http://www.doingbusiness.org/data/exploreeconomies/taiwan-china/.
67 The World Bank, The Knowledge Economy Index, 2012, at http://info.worldbank.org/etools/kam2/KAM_page5.asp.
68 See http://www.weforum.org/reports/global-competitiveness-report-2013-2014.
69 See http://www.weforum.org/reports/global-information-technology-report-2013.
70 The index can be found at http://www.heritage.org/index/ranking.
Congressional Research Service
37


U.S.-Taiwan Relationship: Overview of Policy Issues

(after Spain). Taiwan has seen its share of global merchandise exports fall from 2.3% in 2000 to
1.6% in 2013.71 The proliferation of bilateral and regional free trade agreements (FTAs), which
some argue have excluded Taiwan partly due to political reasons, have raised concerns by many
Taiwan policy makers that Taiwan’s economy (particularly industries dependent on foreign trade)
increasingly could become marginalized and less globally competitive, which could undermine
future economic growth and living standards (discussed in more detail below).
Figure 1. Annual Change in Taiwan’s Real GDP and Real Exports of Goods and
Services: 2005-2013
(percentage)

Source: Economist Intelligence Unit.

Table 1. Taiwan’s Top Five Trading Partners: 2013
($ billions)
Total
Exports
Imports
Trade Balance
World
573.3 305.4 270.0 35.6
China

124.4 81.8 42.6 39.2
Japan
62.4 19.2 43.2 -24.0
United
States
57.8 32.6 25.2 7.4
Hong
Kong
41.1 39.4 1.7 37.7
Singapore
28.1 19.5 8.5 11.0
Sources: Taiwan Bureau of Foreign Trade.
Note: Data may not add up due to rounding.

71 Taiwan’s ranking as a global exporter fell from 14th in 2000 to 20th in 2013.
Congressional Research Service
38

U.S.-Taiwan Relationship: Overview of Policy Issues

Taiwan has tried to expand trade, amid concerns about the proliferation of regional and bilateral
FTAs that exclude Taiwan, especially among Taiwan’s major trading partners and competitors.
Taiwan’s officials have warned that the exclusion of Taiwan from such FTAs could weaken the
competitiveness of Taiwan firms, diminishing trade and economic growth.72 Until very recently,
Taiwan had FTAs with only Panama, Nicaragua, El Salvador, Guatemala, and Honduras, which,
together account for only a minor share of Taiwan’s total trade. In contrast, South Korea, a major
competitor for many Taiwan exporters, has FTAs in effect with the United States, the 28 members
of the European Union, the 10 members of the Association of Southeast Asian Nations (ASEAN),
Peru, India, the European Free Trade Association (EFTA), Singapore, and Chile. South Korea has
concluded FTAs with Turkey and Columbia and is negotiating with 11 other countries and
regions.73 Until recently, Taiwan’s efforts to negotiate FTAs with its major trading partners have
proven unsuccessful, largely because of political opposition by China.74
In an effort to boost economic ties with China in order to take advantage of its rapidly growing
economy, and to improve the chances of Taiwan entering into FTAs with other countries,75 the Ma
Administration has sought to liberalize cross-strait trade and investment barriers. This effort
included the lifting of restrictions on direct trade, transportation, and postal links.76 In 2010, the
two sides signed the ECFA, an FTA that seeks to significantly liberalize trade and investment
barriers over time. The agreement is expected to hasten the pace of cross-strait economic
integration and boost economic growth on both sides.77 The agreement included an “early
harvest” provision to eliminate tariffs on various products within three years.78 As part of the
ECFA process, the two sides reached an agreement in June 2013 to liberalize trade in services.
Press reports indicate that, since the signing of the ECFA, China has backed away somewhat from
opposition to Taiwan seeking trade agreements with other countries, which Taiwan calls
“economic cooperation agreements” (ECAs).79 On July 10, 2013, Taiwan reached an ECA with
New Zealand, and signed the Agreement between Singapore and Taiwan on Economic

72 For example, countries with FTAs often reduce most or all of their tariff levels to zero. Since Taiwan is not partner to
of the FTA its products will be assessed the non-FTA tariffs, which could put them at a competitive disadvantage.
73 Republic of Korea, Ministry of Foreign Affairs and Trade, FTA Status of ROK, at http://www.mofat.go.kr/ENG/
policy/fta/status/overview/index.jsp?menu=m_20_80_10.
74 In the past, PRC officials have argued that only “sovereign nations” can enter into FTAs, which, they claim, Taiwan
is not because it is “part of China.” However, WTO rules allow its members to negotiate FTAs. Taiwan is a member of
the WTO under the title: “the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu (Chinese Taipei).”
Press reports indicate that China sought to pressure other countries to not enter into FTA negotiations with Taiwan.
75 Another concern to Taiwan policy makers was China’s FTA agreements with ASEAN, which is considered the
world’s largest FTA in terms of population, and third largest in terms of trade flows and GDP. The China-ASEAN Free
Trade Area went into effect on January 1, 2010. Taiwan officials sought an ECFA with China to ensure that Taiwan’s
exports to China remained competitive vis-a-vis ASEAN exports to China.
76 Until recently, most trade, transportation, and postal links with China occurred indirectly, mainly via Hong Kong.
These constituted significant added time and money costs to cross-strait economic ties.
77 During the debate over the ECFA, the Taiwan government argued that the agreement would greatly benefit Taiwan’s
economy, estimating that it would boost GDP by 1.7% and exports by 5.0%, and expand employment by 263,000.
Taiwan opponents of the EFCA contended that the agreement would lead to further hollowing out of Taiwan’s
manufacturing industries, while other warned the agreement would make Taiwan overly-dependent on China’s
economy, which would give China leverage over Taiwan.
78 China agreed to eliminate 539 items and Taiwan agreed to eliminate tariffs on 267 items.
79 Taiwan’s Ministry of Economic Affairs defines an ECA as “an agreement signed by two or more economies for
promotion of trade activities and economic integration with each other by reducing tariffs and fees, as well as by
eliminating other trade barriers for goods and services.”
Congressional Research Service
39

U.S.-Taiwan Relationship: Overview of Policy Issues

Partnership (ASTEP) on November 7, 2013. Taiwan also has pursued exploratory talks with the
European Union, the Philippines, India, Indonesia, and Israel about the possibility of an ECA.80
Taiwan has expressed interest in a FTA/ECA with the United States for the past several years.
Some analysts have urged Taiwan to pursue other agreements with the United States, such as a
bilateral investment agreement (BIA), which could boost both trade and investment.81 In addition,
Taiwan is seeking to join various proposed regional FTAs, including the Trans-Pacific Partnership
(TPP) that would include the United States; and the Regional Comprehensive Economic
Partnership (RCEP), which would include 16 Asian-Pacific countries.82
Cross-Strait Economic Ties
The importance of the PRC as a trading partner for Taiwan is significant and has been growing
rapidly (see Figure 2).83 Taiwan’s total trade with China grew from $31.3 billion in 2000 to
$124.4 billion in 2013 (a 297% increase). The PRC is Taiwan’s largest trading partner (followed
by Japan and the United States),84 its largest export market, and its second-largest source of
imports (after Japan).85 According to Taiwan’s Mainland Affairs Council (MAC), Taiwan’s
exports to China as a share of total exports rose from 3.2% in 1985 to 28.5% in 2013 (this
increases to 39.7% if exports to Hong Kong are included), while Taiwan’s imports from China as
a share of total imports rose from 0.6% to 15.8% (16.4% if Hong Kong is included).86 Taiwan has
enjoyed large annual merchandise trade surpluses with the PRC (it was $39.2 billion in 2013).87

80 Taiwan Ministry of Economic Affairs, Overview of Taiwan’s Progress on FTA/ECA, October 24, 2012, at
http://www.moea.gov.tw/Mns/otn_e/content/SubMenu.aspx?menu_id=6199.
81 Taiwan signed an investment agreement with Japan in 2011.
82 The RCEP would include the ASEAN countries, China, Japan, South Korea, India, Australia, and New Zealand.
83 In 2001, Taiwan decided to relax restrictions on Taiwan’s investments in the PRC and to sharply reduce the number
of PRC products subject to import bans in order to boost Taiwan’s economy (which was in recession), as well as to take
advantage of new economic opportunities that were expected to occur following the PRC’s accession to the World
Trade Organization (WTO) in December 2001. Taiwan joined the WTO in January 2002.
84 In 2013, the United States was Taiwan’s third-largest export market and third-largest source of imports.
85 China replaced the United States as Taiwan’s largest export market in 2002 and has remained so through 2013.
86 Taiwan’s exports to, and imports from, China in 2013 were $81.8 billion and $42.6 billion, respectively.
87 PRC data indicate that its trade deficit with Taiwan in 2013 was the largest incurred with any of its trading partners.
Congressional Research Service
40


U.S.-Taiwan Relationship: Overview of Policy Issues

Figure 2. Taiwan’s Trade with China as a Percent of its Total Trade: 2000 and 2013
(percentage)

Source: Taiwan’s Mainland Affairs Council.
Note: Data excludes trade with Hong Kong.
Taiwan is a major source of foreign direct investment (FDI) flows to the PRC, although the exact
level remains unknown. According to the Taiwan Investment Commission, Taiwan’s approved
FDI flows to China grew from $2.6 billion in 2000 to 13.1 billion in 2011, but declined during the
next two years (totaling $8.7 billion in 2013) (see Figure 3). The stock of Taiwan’s approved FDI
to China from 1991 to 2013 was $133.7 billion, 80% of which is in manufacturing. The top five
sectors of Taiwan’s cumulative FDI in China from 1991-2013 were electronic parts and
components manufacturing ($25.3 billion); computers, electronic, and optical products
manufacturing ($18.4 billion); electrical equipment manufacturing ($9.8 billion); wholesale and
retail trade ($7.0 billion); and finance and insurance ($6.2 billion).88
Many analysts argue that a large level of Taiwan’s investment in China is not reported to the
government. For example, many Taiwan investors are believed to invest in China through a Hong
Kong entity in order to avoid scrutiny by Taiwan’s government. Some analysts estimate the total
level of Taiwan FDI in China could be as high as $300 billion.89 More than one million Taiwan

88 Taiwan Investment Commission, Ministry of Economic Affairs, Monthly Report, December 2013, at
http://www.moeaic.gov.tw/system_external/ctlr?PRO=PublicationLoad&lang=1&id=159.
89 U.S. Department of State, 2013 Investment Climate Statement-Taiwan, February 2013, at http://www.state.gov/e/eb/
rls/othr/ics/2013/204742.htm.
Congressional Research Service
41


U.S.-Taiwan Relationship: Overview of Policy Issues

people are estimated to be residing in the PRC, and more than 70,000 Taiwan companies have
operations there.90 According to one report, in 2012, sales by Taiwan’s 100 largest corporations to
China and Hong Kong totaled $372.8 billion and $47.4 billion, respectively. Hon Hai Precision
Industry (also known as Foxconn), a major Taiwan electronics company, reportedly employs over
one million PRC workers (compared to 46,000 employees in Taiwan).91
Growing economic integration with the PRC has raised concerns by some groups in Taiwan that
Taiwan will become increasing dependent on China for its economic growth, that the movement
of manufacturing firms from Taiwan to China will accelerate, and that PRC-invested firms in
Taiwan (many of which are state-owned) could end up dominating certain industries in Taiwan.
Such concerns may have contributed to the protests that occurred in Taiwan in March-April 2014
over the Cross-Strait Trade in Services Agreement that was under consideration in the LY.
Figure 3. Taiwan’s Annual Approved Outbound Investment Flows to China: 1991-2013
($ billions)

Source: Taiwan Investment Commission.
Notes: Taiwan’s data reflect only FDI to China that was approved by the government. They likely do not include
FDI in China by Taiwan investors that did not seek or obtain government approval and may have invested in
China through other countries or territories, such as Hong Kong.
U.S.-Taiwan Trade and Investment Flows
U.S. trade data appear to indicate that the relative importance of Taiwan as a U.S. trading partner
has declined over the past several years (especially relative to U.S. trade with China, as indicated
in Figure 4 and Figure 5). For example:
• Total U.S. trade with Taiwan in 2013 was $63.6 billion, making Taiwan the 12th
largest U.S. trading partner—down from 6th in 1989.

90 American Institute in Taiwan, Taiwan Economic and Political Background Note, February 8, 2012.
91 Wall Street Journal, Hon Hai Beefs Up Hiring In Taiwan, March 10, 2014.
Congressional Research Service
42


U.S.-Taiwan Relationship: Overview of Policy Issues

• U.S. imports from Taiwan were $37.9 billion, making Taiwan the 12th-largest
source of U.S. imports—down from 5th in 1989.
• U.S. exports to Taiwan were $24.7 billion, making Taiwan the 16th-largest U.S.
export market—down from 9th in 1989.
• From 2004-2013, U.S. exports to Taiwan grew by 18.0%, compared a 93.4%
increase in total U.S. exports, while U.S. imports from Taiwan increased by
9.5%, compared to a 54.2% rise for total U.S. imports.
• From 2003 to 2012, U.S. exports to, and imports from, Taiwan grew by 41.1%
and 22.1%, respectively, compared to the growth of total U.S. exports and
imports during this period of 113.7% and 80.7%, respectively.
Figure 4. Comparison of U.S. Exports to China and Taiwan: 2000-2013
($ billions)

Source: USITC Dataweb.
Congressional Research Service
43


U.S.-Taiwan Relationship: Overview of Policy Issues

Figure 5. Comparison of U.S. Imports from China and Taiwan: 2000-2013
($ billions)

Source: U.S. International Trade Commission.
Role of Supply Chains
U.S. data on trade with Taiwan likely understate the importance of Taiwan to the U.S. economy
because of the role of global supply chains. To illustrate, Taiwan’s manufacturers and traders
report data on the amount of export orders they receive from various countries. These data
indicate that annual orders for products from U.S. buyers are much larger than the reported level
of annual U.S. imports from Taiwan. For example, while U.S. imports from Taiwan in 2013 were
$37.9 billion, U.S. entities placed export orders with Taiwan firms in that year worth $107.2
billion. This was nearly three times greater than the U.S.-reported level of imports from Taiwan.
The gap between U.S. imports from Taiwan and U.S. export orders to Taiwan firms has widened
considerably over the past 10 years.
Congressional Research Service
44

U.S.-Taiwan Relationship: Overview of Policy Issues

Figure 6. Comparison of U.S. Export Orders Placed with Taiwan Firms and U.S.
Merchandise Imports from Taiwan: 2000-2013
($ billions)
120
100
80
60
40
20
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
U.S. Imports
U.S. Exports Orders

Source: Taiwan export order data are from the Taiwan Ministry of Economic Affairs. Data on U.S. imports are
from the U.S. International Trade Commission.
Notes: Exports for a given year reflect orders received by Taiwan firms throughout the year. The year a
product was ordered and the year the product arrived in the country where the order originated might differ.
A significant amount of Taiwan’s ICT hardware products that are assembled in China are
exported. U.S. trade data indicate that computer products and parts are the single largest category
of U.S. imports from China. Thus, it is likely that a large share of U.S. imports of computers and
computer parts from China originate from Taiwan-invested firms in China. In many cases, U.S.
ICT firms place orders for products with Taiwan’s firms, which manufacture the products in
China, then ship them to the United States, where U.S. firms sell the products under their own
brand names. According to Taiwan’s Ministry of Economic Affairs (MOEA), U.S. firms such as
Apple, Dell, Verizon, and HP are among the major global purchasers of ICT products made by
Taiwan firms (primarily Hon Hai/Foxconn). For example, many of Apple’s products (such as
iPads, iPhones, and iPods), which are developed and engineered in the United States, are
assembled by Taiwan’s firms in China (using imported parts). The final products are exported
globally, including to the United States. According to the Taiwan government, overseas
production accounted for 13.3% of Taiwan export orders in 2000, but by 2013, this level reached
51.5%. For Taiwan ICT firms, this ratio rose from 24.9% to 87.3%.92
The disparity between the data on Taiwan’s export orders and U.S. import data largely is
explained by the fact that a significant level of products designed and sold by Taiwan’s firms are
actually built elsewhere, especially in the PRC, and then shipped globally, including to the United
States. For example, from 2001 to 2008, the value of Taiwan’s information technology (IT)
hardware (such as computers) production increased from $42.8 billion to $100.0 billion.93

92 Taiwan, Ministry of Economic Affairs, Export Orders Survey.
93 According to TechTerms.com, information technology refers to anything related to computing technology, such as
networking, hardware, software, the Internet, or the people that work with these technologies.
Congressional Research Service
45

U.S.-Taiwan Relationship: Overview of Policy Issues

However, the share of that production in Taiwan during this time declined from 47.1% to 1.3%,
while the share in China increased from 36.9% to 90.6%.
Other Trade Trends
Major U.S. imports from Taiwan in 2013 included semiconductors and other electronic
components; communications equipment; computer equipment; and motor vehicle parts. Major
U.S. exports to Taiwan included industrial machinery; semiconductors and other electronic
components; basic chemicals; and aerospace products (see Table 2). In 2013, Taiwan was the
seventh-largest export market for U.S. agricultural products, valued at $3.1 billion. Major U.S.
agricultural exports to Taiwan include soybean and soybean products, wheat and wheat products,
processed foods, and beef. In addition, Taiwan is the seventh-largest foreign holder of U.S.
Treasury securities, which totaled $179 billion as of January 2014.
Table 2. Top Five U.S. Trade Commodities with Taiwan: 2013
($ millions)
Major U.S. Import Commodities from Taiwan

Semiconductors and other electronic components
6,704
Communications equipment
3,860
Computer equipment
2,273
Motor vehicle parts
2,154
Bolts, nuts, screws, rivets, washers and other turned products
1,414
Major U.S. Export Commodities to Taiwan

Industrial machinery
2,988
Semiconductors and other electronic components
2,814
Basic chemicals
2,350
Aerospace products and parts
1,800
Waste & scrap
1,398
Source: U.S. International Trade Commission DataWeb.
U.S.-Taiwan FDI Flows
According to the U.S. Bureau of Economic Affairs (BEA), the stock of U.S. FDI in Taiwan
through 2012 was $16.5 billion, while the stock of Taiwan FDI in the United States was $7.8
billion.94 Taiwan data indicate that the United States is the largest overall source of approved FDI
inflows, at $22.5 billion through 2013.
Overview of U.S.-Taiwan Commercial Ties
Issues. Economic engagement between the United States and Taiwan has been generally positive,
although there are a few issues that have proved contentious. Some issues are summarized below.

94 In comparison, the stock of U.S. FDI in China was $51.4 billion and the stock of Chinese FDI in the United States
was $10.5 billion. Data on FDI inflows into the United States are on an ultimate beneficial basis (UBO), which seeks to
reflect the actual origin of the investor.
Congressional Research Service
46

U.S.-Taiwan Relationship: Overview of Policy Issues

Sanitary and Phyto-sanitary (SPS) Issues. These have ranked among the most
contentious issues in the relationship. As noted earlier, Taiwan’s restrictions on
certain imported U.S. beef products led the United States to suspend the bilateral
TIFA talks for several years. Although Taiwan changed its regulations regarding
ractopamine in beef, it has not done so for pork.95 Some Members of Congress
have suggested that the United States should initiate a dispute settlement case
against Taiwan’s pork barriers in the WTO.96 In addition, Taiwan has rejected
agricultural shipments of U.S. cherries, apples, wheat, barley, strawberries, and
corn over SPS issues, which, the United States contends, are not justified.97
Intellectual property rights (IPR). In recent years, Taiwan has strived to
improve its protection and enforcement of IPR. Such improvements led the
USTR in January 2009 to remove Taiwan from its annual “Special 301” list of
countries whose IPR policies were of the greatest concern to the United States.98
In 2012, the USTR stated that Taiwan generally provides effective IPR protection
and enforcement, although it noted that a number of problems remain, such as
infringement of copyrighted material on the Internet and widespread commercial
photocopying of university textbooks.99 However, in February 2013, the
International Intellectual Property Alliance (IIPA), a private sector coalition
representing U.S. copyright-based industries, stated that Taiwan had “allowed
copyright piracy, particularly in the online environment, to spiral out of control.”
It added that “the enforcement situation in Taiwan has deteriorated in the past
several years to the point that, without some signs of positive change, IIPA
members will consider recommending that Taiwan again be placed back on the
Special 301 Watch List.”100 In February 2004, IIPA stated that Internet Piracy
remained the most serious IPR problem in Taiwan and that an effective
mechanism to address this issue had yet to be implemented.101
Government Procurement. In July 2009, Taiwan joined the WTO’s
Government Procurement Agreement (GPA), which gives U.S. firms (and other
members of the GPA) access to an annual procurement market estimated at $6

95 Taiwan maintains a zero tolerance policy on ractopamine in pork. As a result, only U.S. pork that is certified to be
free of ractopamine is allowed into Taiwan. According to the U.S. Department of Agriculture, Taiwan is 90% self-
sufficient in pork production and that the Taiwan government promotes domestically produced pork freshness,
traceability, and reduced carbon footprint with “local consumption from local production.” Source: USDA, Gain
Report: Taiwan Grain and Feed Annual 2013
, April 19, 2013.
96 A number of other countries also maintain restrictions on meat products containing ractopamine, including China,
Russia, and members of the European Union. See The Hill’s Congressional Blog, February 27, 2013.
97 USTR, Sanitary and Phytosanitary Measures (SPS Report), 2012, p.78.
98 Taiwan was designated a Special 301 “watch list” country, an indicator that particular problems existed in that
country with respect to IPR protection, enforcement, or market access. When Taiwan was removed from the Special
301 list, the USTR’s Office stated: Taiwan has come a long way on this issue over the last eight years. In 2001, USTR
called Taiwan a haven for pirates. Today, Taiwan has strengthened its enforcement, strengthened its laws, and
demonstrated a commitment to becoming a haven for innovation and creativity. This is a credit to the hard work done
by Taiwan as well as to our close bilateral cooperation. We hope that this progress can continue and be duplicated in
other areas of our trade relationship.” (source: USTR, Press Release, January 2009)
99 USTR, the 2012 National Trade Estimate Report on Foreign Trade Barriers (NTE), March 2012, p. 361.
100 IIPA, Taiwan, 2013 Special 301 Report on Copyright Protection and Enforcement, 2013, at http://www.iipa.com/
rbc/2013/2013SPEC301TAIWAN.PDF. The USTR annually issues a Special 301report that surveys the IPR practices
of other countries and identifies the policies of greatest concern to the United States.
101 IIPA, 2014, Special 301 Report on Copyright Protection and Enforcement, February 2014.
Congressional Research Service
47

U.S.-Taiwan Relationship: Overview of Policy Issues

billion.102 According to the USTR’s office, while Taiwan has made several
reforms to open up its government procurement market, U.S. firms have
encountered a number of problems, including issues relating to transparency,
contract terms and conditions, and licensing and liabilities.103
Investment Restrictions. Taiwan bans or limits foreign investment in various
sectors, including agricultural production, chemical manufacturing, bus
transportation, and public utilities. Restrictions exist on FDI in a number of
industries, including telecommunications, cable television broadcast services,
high-speed rail, and piped natural gas.104 According to AmCham Taipei, Taiwan
FDI inflows have “been woefully below what is common in most other major
economies in the Asia-Pacific.105
TIFA Talks. The United States and Taiwan resumed the TIFA talks in Taipei on March 10, 2013,
after a hiatus of nearly six years (previous talks were held in July 2007). The two sides released
joint statements on investment principles and ICT services, and announced new TIFA working
groups on investment and technical barriers to trade. Deputy USTR Demetrios Marantis stated:
The resumption of TIFA talks between Taiwan and the United States represents a new
stage in our economic relationship that will more fully open the lines of communication
on trade and investment. The dedication of our partners from Taiwan to achieving
positive outcomes in investment, information and communication technology services,
and other areas is a testament to President Ma’s vision for Taiwan’s economic opening
and deepening ties with regional and global partners.106
U.S. and Taiwan officials held another round of TIFA talks on April 5, 2014, although they did
not announce any major breakthroughs. The TIFA talks did not resolve the dispute over U.S.
pork. According to a press release by the USTR’s office, the United States indicated that it
welcomed the concrete steps Taiwan authorities had taken to improve trade secrets protection and
address pharmaceutical issues. It was further noted that in-depth discussions on a range of long-
standing agricultural trade issues were held and that both sides recognized the “importance of
making meaningful progress on these issues in order to deepen their overall trade ties.” Taiwan’s
commitment to boost resources to improve IPR enforcement steps to liberalize certain investment
policies were noted, as well as the need for further progress on Internet piracy, and
pharmaceutical and medical device issues.107

102 The GPA is plurilateral agreement within the WTO. Its currently has 15 members, including the United States, the
European Union, Canada, and Japan.
103 USTR, 2013 Trade Policy Agenda and 2012 Annual Report, March 1, 2013, p. 151.
104 U.S. Department of State, 2013 Investment Climate Statement—Taiwan, February 2013, at http://www.state.gov/e/
eb/rls/othr/ics/2013/204742.htm.
AmCham Taipei, 2013 White Paper, at http://www.amcham.com.tw/topics-archive/topics-archive-2013-0/vol-43-no-
06/3897-2013-taiwan-white-paper. According to the Taiwan government, approved FDI inflows in 2012 were $5.5
billion. This compares with FDI flows to South Korea of $16.3 billion.
106 USTR, Press Release, March 10, 2013, at http://www.ustr.gov/about-us/press-office/press-releases/2013/march/
amb-marantis-Taiwan-TIFA. According to the USTR, TIFA agreements “serve as a forum for the United States and
other governments to meet and discuss issues of mutual interest with the objective of improving cooperation and
enhancing opportunities for trade and investment.” Resolution of trade and investment barriers within the TIFA
framework can often serve as a path to an eventual FTA with the United States. (Source: USTR, Trade & Investment
Framework Agreements, at http://www.ustr.gov/trade-agreements/trade-investment-framework-agreements).
107 USTR, Press Release, April 5, 2004, at http://insidetrade.com/iwpfile.html?file=apr2014%2Fwto2014_0992a.pdf.
Congressional Research Service
48

U.S.-Taiwan Relationship: Overview of Policy Issues

BIA. After a resumption of TIFA talks, Taiwan has made the signing of a BIA with the United
States a priority to boost economic ties. Such an agreement could improve the investment climate
in both economies by lowering investment barriers, improving transparency, and establishing a
dispute resolution mechanism, which could subsequently increase bilateral investment and trade
flows. In September 2013, officials in the United States and Taiwan held investment talks under
the newly created TIFA investment working group. During the October 2013 APEC summit,
Secretary of State John Kerry and former Taiwan vice president Vincent Siew (Taiwan’s
representative to the APEC summit) held a sideline meeting to discuss the economic relationship.
Siew was quoted as saying: “We aim to further talks under the Taiwan-U.S. Trade and Investment
Framework Agreement and push for the signing of a bilateral investment agreement en route to
concluding a free trade pact.” He further stated that “This is part of the building blocks approach
that is paving the way for Taiwan to take part in regional trade groupings such as the Trans-
Pacific Partnership.”108 The United States also is pursuing a similar agreement with China (a
bilateral investment treaty, or BIT), while Taiwan reached a Cross-strait Investment Protection
and Promotion Agreement with the PRC in 2012 following ECFA.
Legislation in the 113th Congress
H.J.Res. 109 (Royce), to approve the proposed agreement on peaceful uses of nuclear energy.
H.R. 419 (Ros-Lehtinen), Taiwan Policy Act of 2013, to strengthen the U.S.-Taiwan relationship.
H.R. 772 (Faleomavaega), to promote peaceful and collaborative resolution of the South China
Sea dispute.
H.R. 1151 (Royce)/P.L. 113-17, to direct the Secretary of State to develop a strategy to obtain
observer status for Taiwan at the triennial International Civil Aviation Organization Assembly.
H.R. 1960 (McKeon), National Defense Authorization Act for FY2014. See P.L. 113-66.
H.R. 3470 (Royce), Taiwan Relations Act Affirmation and Naval Vessel Transfer Act of 2014. On
April 7, 2014, the House agreed by voice vote to the bill, which added H.Res. 494 as section 101.
H.R. 4435 (McKeon), NDAA for FY2015.
H.R. 4495 (Forbes), Asia-Pacific Region Priority Act.
H.Con.Res. 29 (McCaul), to express the sense of Congress that the United States should resume
normal diplomatic relations with Taiwan.
H.Con.Res. 46 (Andrews), to urge the Government of Taiwan to grant former President Chen
Shui-bian medical parole to ensure that he receives the highest level of medical attention.
H.Con.Res. 55 (Garrett), to express the sense of Congress that Taiwan and its 23,000,000 people
deserve membership in the United Nations.
H.Res. 185 (Bentivolio), Taiwan Travel Act, to declare that it should be U.S. policy to encourage
visits between the United States and Taiwan at all levels.
H.Res. 494 (Royce), to affirm the importance of the TRA (on its 35th anniversary). See H.R. 3470.

108 Taiwan Today, October 7, 2013, at http://www.taiwantoday.tw/ct.asp?xItem=210229&CtNode=436.
Congressional Research Service
49

U.S.-Taiwan Relationship: Overview of Policy Issues

H.Res. 704 (Forbes), to reaffirm the strong support of the U.S. government for freedom of
navigation and other internationally lawful uses of sea and airspace and peaceful diplomatic
resolution of outstanding territorial and maritime claims and disputes.
H.Res. 714 (Faleomavaega), to reaffirm the peaceful and collaborative resolution of maritime and
jurisdictional disputes in the South China Sea and East China Sea.
S. 12 (Coats), Naval Vessel Transfer Act of 2013, inter alia, to authorize the transfer by sale of
four excess Perry-class frigates to Taiwan.
S. 579 (Menendez), to direct the Secretary of State to develop a strategy to obtain observer status
for Taiwan at the triennial International Civil Aviation Organization Assembly.
S. 1197 (Levin), National Defense Authorization Act for FY2014. See P.L. 113-66.
S. 1683 (Menendez), to provide for the transfer of naval vessels to certain foreign recipients.
S. 2410 (Levin), NDAA for FY2015.
S.J.Res. 31 (Menendez), to approve the proposed agreement on peaceful uses of nuclear energy.
S.Res. 167 (Menendez), to reaffirm the strong U.S. support for the peaceful resolution of
territorial, sovereignty, and jurisdictional disputes in the Asia-Pacific maritime domains.
S.Res. 412 (Menendez), to reaffirm the strong U.S. support for freedom of navigation and other
lawful uses of the sea and airspace, and diplomatic resolution of territorial and maritime claims.

Author Contact Information

Shirley A. Kan
Wayne M. Morrison
Specialist in Asian Security Affairs
Specialist in Asian Trade and Finance
skan@crs.loc.gov, 7-7606
wmorrison@crs.loc.gov, 7-7767

Congressional Research Service
50