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Wednesday, July 28, 2010

China Naval Modernization: Implications for U.S. Navy Capabilities—Background and Issues for Congress


Ronald O'Rourke
Specialist in Naval Affairs


The question of how the United States should respond to China's military modernization effort, including its naval modernization effort, has emerged as a key issue in U.S. defense planning. The issue is of particular importance to the U.S. Navy, because many U.S. military programs for countering improved Chinese military forces would fall within the Navy's budget.

Decisions that Congress and the executive branch make regarding U.S. Navy programs for countering improved Chinese maritime military capabilities could affect the likelihood or possible outcome of a potential U.S.-Chinese military conflict in the Pacific over Taiwan or some other issue. Some observers consider such a conflict to be very unlikely, in part because of significant U.S.-Chinese economic linkages and the tremendous damage that such a conflict could cause on both sides. In the absence of such a conflict, however, the U.S.-Chinese military balance in the Pacific could nevertheless influence day-to-day choices made by other Pacific countries, including choices on whether to align their policies more closely with China or the United States. In this sense, decisions that Congress and the executive branch make regarding U.S. Navy programs for countering improved Chinese maritime military forces could influence the political evolution of the Pacific, which in turn could affect the ability of the United States to pursue goals relating to various policy issues, both in the Pacific and elsewhere.

China's naval modernization effort, which began in the 1990s, encompasses a broad array of weapon acquisition programs, including anti-ship ballistic missiles (ASBMs), submarines, and surface ships. China's naval modernization effort also includes reforms and improvements in areas such as maintenance and logistics, naval doctrine, personnel quality, education, training, and exercises.

DOD and other observers believe that the near-term focus of China's military modernization effort has been to develop military options for addressing the situation with Taiwan. Consistent with this goal, observers believe that China wants its military to be capable of acting as a so called anti-access force—a force that can deter U.S. intervention in a conflict involving Taiwan, or failing that, delay the arrival or reduce the effectiveness of intervening U.S. naval and air forces. Some observers believe that China's military modernization effort, including its naval modernization effort, is increasingly oriented toward pursuing additional goals, such as asserting or defending China's claims in maritime territorial disputes, protecting China's sea lines of communications, displacing U.S. influence in the Pacific, and asserting China's status as a major world power.

Placing an increased emphasis on U.S. Navy programs for countering improved Chinese maritime military capabilities in coming years could lead to one more of the following: developing and procuring highly capable ships, aircraft, and weapons for defeating Chinese anti-access systems; assigning a larger percentage of the Navy to the Pacific Fleet (and, as a result, a smaller percentage to the Atlantic Fleet); homeporting more of the Pacific Fleet's ships at forward locations such as Hawaii, Guam, and Japan; increasing training and exercises in operations relating to countering Chinese maritime anti-access forces, such as antisubmarine warfare (ASW) operations; and increasing activities for monitoring and understanding developments in China's navy, as well as activities for measuring and better understanding operating conditions in the Western Pacific
.


Date of Report: June 23, 2010
Number of Pages: 59
Order Number: RL33153
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Tuesday, July 27, 2010

U.S. Sanctions on Burma


Michael F. Martin
Specialist in Asian Affairs


Existing U.S. sanctions on Burma are based on various U.S. laws and Presidential Executive Orders. This report provides a brief history of U.S. policy towards Burma and the development of U.S. sanctions, a topical summary of those sanctions, and an examination of additional sanctions that have been considered, but not enacted, by Congress, or that could be imposed under existing law or executive orders. The report concludes with a discussion of options for Congress.

The current U.S. sanctions on Burma are the result of a general, but uneven decline in U.S. relations with Burma and its military, the Tatmadaw, since World War II. For the most part, the decline is due to what the U.S. government sees as a general disregard by the Burmese military for the human rights and civil liberties of the people of Burma.

In general, Congress has passed Burma-specific sanctions following instances of serious violation of human rights in Burma. These began following the Tatmadaw's violent suppression of popular protests in 1988, and have continued through several subsequent periods in which Congress perceived major human rights violations in Burma. The result is a web of overlapping sanctions subject to differing restrictions, waiver provisions, expiration conditions, and reporting requirements.

The United States currently imposes sanctions specifically on Burma via five laws and four presidential Executive Orders (E.O.s). These sanctions can be generally divided into several broad categories, such as visa bans, restrictions on financial services, prohibitions of Burmese imported goods, a ban on new investments in Burma, and constraints on U.S. assistance to Burma.

In addition to the targeted sanctions, Burma is currently subject to certain sanctions specified in U.S. laws based on various functional issues. In many cases, the type of assistance or relations restricted or prohibited by these provisions are also addressed under Burma-specific sanction laws. The functional issues include the use of child soldiers, drug trafficking, human trafficking, money laundering, failure to protect religious freedoms, violations of workers' rights, and threats to world peace and the security of the United States.

Past Congresses have considered a variety of additional, stricter sanctions on Burma. With a pending parliamentary election supposedly to be held in Burma, the 111th Congress may consider either the imposition of additional sanctions or the removal of some of the existing sanctions, depending on the conduct and outcome of the parliamentary election and other developments in Burma.



Date of Report: June 16, 2010
Number of Pages: 28
Order Number: R41336
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Friday, July 23, 2010

U.S.-China Counterterrorism Cooperation: Issues for U.S. Policy


Shirley A. Kan
Specialist in Asian Security Affairs


After the terrorist attacks on September 11, 2001, the United States faced a challenge in enlisting the full support of the People's Republic of China (PRC) in the counterterrorism fight against Al Qaeda. This effort raised short-term policy issues about how to elicit cooperation and how to address PRC concerns about the U.S.-led war (Operation Enduring Freedom). Longer-term issues have concerned whether counterterrorism has strategically transformed bilateral ties and whether China's support was valuable and not obtained at the expense of other U.S. interests.

The extent of U.S.-China counterterrorism cooperation has been limited, but the tone and context of counterterrorism helped to stabilize—even if it did not transform—the closer bilateral relationship pursued by President George Bush in late 2001. China's military, the People's Liberation Army (PLA), has not fought in the U.S.-led counterterrorism coalition. The Bush Administration designated the PRC-targeted "East Turkistan Islamic Movement" (ETIM) as a terrorist organization in August 2002, reportedly allowed PRC interrogators access to Uighur detainees at Guantanamo in September 2002, and held a summit in Texas in October 2002.

Since 2005, however, U.S. concerns about China's extent of cooperation in counterterrorism have increased. In September 2005, Deputy Secretary of State Robert Zoellick acknowledged that "China and the United States can do more together in the global fight against terrorism" after "a good start," in his policy speech that called on China to be a "responsible stakeholder" in the world. The summits of the Shanghai Cooperation Organization (SCO) in 2005 and 2006 raised U.S. concerns. Since the summer of 2007, U.S. officials have expressed more concern about China-origin arms that have been found in the conflict involving U.S. forces in Afghanistan, as part of the broader threat posed by Iran and its arms transfers.

Congress has oversight over the closer ties with China and a number of policy options. U.S. policy has addressed law-enforcement and intelligence ties; oppressed Uighur (Uyghur) people in western Xinjiang whom China claims to be linked to "terrorists"; detained Uighurs at Guantanamo Bay prison; Olympic security in August 2008; sanctions that ban exports of arms and security equipment; weapons nonproliferation; port security; military-to-military contacts; China's influence and support in Central Asia through the SCO; and China's arms transfers to Iran. Also, Congress has concerns about suspected PRC harassment of Uighurs and others in the United States, the President's efforts to transfer the Uighurs detained at Guantanamo, and efforts to seek China's counterterrorism cooperation (with U.S. assessments of mixed implications). The United States detained 22 Uighurs and rejected China's demand to take them while seeking a third country to accept them. In 2006, Albania accepted five of them. In June 2009, Bermuda accepted four. In November 2009, Palau accepted six. In February 2010, Switzerland accepted two Uighurs. The five Uighurs remaining in detention had been taken into custody in Pakistan. On February 26, 2010, the House passed H.R. 2701 (Reyes), with Section 351 which would require an unclassified summary of intelligence on any threats posed by the Uighurs who were detained at Guantanamo. Other relevant bills in the 111th Congress include: H.R. 2346 (P.L. 111- 32); H.Res. 417 (Baldwin); H.Res. 624 (Delahunt); H.Res. 774 (Hastings); H.Res. 953 (McGovern); H.R. 2294 (Boehner); S.Res. 155 (Brown); and S. 1054 (Inouye). The Obama Administration has proposed that China increase contributions and coordination in investments and assistance to help stabilize Pakistan and Afghanistan. With concerns about military operations in Central Asia, the United States also has concerns about dealing with China in its northwestern region of Xinjiang. On July 8, 2010, Norway arrested three men reportedly connected with the Turkistan Islamic Party (another name for ETIM) and Al Qaeda.



Date of Report: June 15, 2010
Number of Pages: 40
Order Number: RL33001
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Thursday, July 22, 2010

U.S.-Vietnam Relations in 2010: Current Issues and Implications for U.S. Policy


Mark E. Manyin
Specialist in Asian Affairs


After communist North Vietnam's victory over U.S.-backed South Vietnam in 1975, U.S.- Vietnam had minimal relations until the mid-1990s. Normal diplomatic relations were established on July 11, 1995. Since then, bilateral ties have expanded to the point where leaders on both sides describe each other as partners on a number of issues. The maturation of relations has been particularly marked since the mid-2000s, when Vietnam made a decision to upgrade the relationship; since then, overlapping strategic and economic interests have compelled the United States and Vietnam to improve ties across a wide spectrum of issues. Congress played a significant role in the normalization process and continues to influence the state of relations.

In the United States, voices favoring improved relations have included those reflecting U.S. business interests in Vietnam's reforming economy and U.S. strategic interests in expanding cooperation with a populous country—Vietnam has 88 million people—that has an ambivalent relationship with China. Others argue that improvements in bilateral relations should be conditioned upon Vietnam's authoritarian government improving its record on human rights. Vietnam is asserting itself on the regional stage; for instance, in 2010 it is the chair of the Association of Southeast Asian Nations (ASEAN). The population of more than 1 million Vietnamese-Americans, as well as legacies of the Vietnam War, also drive continued U.S. interest.

Vietnamese leaders have sought to upgrade relations with the United States in part due to the desire for continued access to the U.S. market and to worries about China's expanding influence in Southeast Asia. That said, Sino-Vietnam relations are Vietnam's most important bilateral relationship and Vietnamese leaders must tiptoe carefully along the tightrope between Washington and Beijing, such that improved relations with one capital not be perceived as a threat to the other. Also, some Vietnamese remain suspicious that the United States' long-term goal is to erode the Vietnamese Communist Party's (VCP) monopoly on power.

Economic ties are the most mature aspect of the U.S.-Vietnam bilateral relationship. The United States is Vietnam's largest export market and in 2009 was its largest source of foreign direct investment. Bilateral trade has grown more than fivefold since the United States extended "normal trade relations" (NTR) treatment to Vietnam in 2001. Increased bilateral trade also has been fostered by Vietnam's market-oriented reforms and the resulting growth in its foreigninvested and privately-owned sectors. From 1987-2007, Vietnam's annual gross domestic product (GDP) growth averaged over 7%. Since then, Vietnam's economy has been buffeted by economic difficulties that have lowered growth rates and raised inflation. Vietnam is one of the largest recipients of U.S. assistance in East Asia; since the late 2000s, annual U.S. aid typically surpasses $100 million, much of it for health-related activities. The Obama Administration is debating whether to add Vietnam to the Generalized System of Payments (GSP) program, which extends duty-free treatment to certain products that are imported from designated developing countries. The United States and Vietnam are two of eight countries negotiating a Trans-Pacific Strategic and Economic Partnership (TPP) regional free trade agreement (FTA).

Human rights are the biggest thorn in the side of the relationship. Vietnam is a one-party, authoritarian state ruled by the Vietnamese Communist Party (VCP), which appears to be following a strategy of permitting most forms of personal and religious expression while selectively repressing individuals and organizations that it deems a threat to the party's monopoly on power. Most observers argue that the government, which already had tightened restrictions on dissent and criticism since 2007, intensified its suppression in 2009 and early 2010.



Date of Report: July 12, 2010
Number of Pages: 37
Order Number: R40208
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China’s Currency: An Analysis of the Economic Issues


Wayne M. Morrison
Specialist in Asian Trade and Finance

Marc Labonte
Specialist in Macroeconomic Policy


Over the past several years, the Chinese government has maintained a policy of intervening in currency markets to limit or halt the appreciation of its currency, the renminbi (RMB) against other major currencies, especially the U.S. dollar. This policy appears to be largely intended to keep China's export industries competitive internationally and to attract FDI, which have been major factors behind China's rapid economic growth. Critics charge that this policy constitutes a form of currency manipulation that is intended to make Chinese exports cheaper, and imports into China more expensive, than they would be under a floating exchange system. Some claim that China's currency policy is a major cause of the large U.S. trade imbalance with China and the loss of numerous U.S. jobs. Many Members have urged the Obama Administration to designate China as a "currency manipulator" in order to pressure it to let the RMB appreciate, and several bills have been introduced (including H.R. 2378, S. 1254, S. 1027, and S. 3134) which seek to address China's currency policy.

The current global economic crisis has further complicated the currency issue for both China and its trading partners. From July 2005 to July 2008, the RMB was allowed to gradually appreciate against the dollar, rising by about 21% over this period. However, once the effects of the global economic crisis began to become apparent, China halted appreciation of the RMB to the dollar in an effort to limit job losses in industries dependent on trade. From July 2008 to late June 2010, China kept the exchange rate of the RMB at roughly 6.83 yuan (the base unit of the RMB) to the dollar. On June 19, 2010, the Chinese central bank stated that, based on current economic conditions, it had decided to "proceed further with reform of the RMB exchange rate regime and to enhance the RMB exchange rate flexibility." Events following the announcement demonstrate that a flexible RMB exchange rate could move both up and down over short periods of time. On June 22, the RMB appreciated by 0.43% against the dollar to 6.80 yuan over the previous day, the largest daily rise since reforms were implement in 2005, but it depreciated to 6.81 the next day.

Many economists have argued that RMB appreciation is an important factor in helping to rebalance the world economy. They have also urged China to implement policies to make consumer demand, rather than exports and fixed investment, the main sources of economic growth. Some see RMB appreciation as a way of boosting China's imports, which could contribute to a faster global economic recovery. While Chinese officials acknowledge the need to rebalance the economy, they have strongly resisted international pressure to appreciate and reform the currency, calling it "protectionism." Some attribute this policy to concerns by the Chinese government that implementing policy changes too rapidly could lead to social instability.

The U.S. federal budget deficit has increased rapidly since FY2008, causing a sharp increase in the amount of Treasury securities that must be sold. While the Obama Administration has pushed China to appreciate its currency, it has also encouraged it to continue purchasing U.S. Treasury securities. China is the largest foreign holder of U.S. Treasury securities, which totaled $900 billion as of April 2010. Some analysts contend that, although an appreciation of China's currency could help boost U.S. exports to China, it could also lessen China's need to buy U.S. Treasury securities, which could push up U.S. interest rates. It could result in higher prices of Chinese made goods for U.S. consumers, as well as for Chinese-made inputs that U.S. firms use in their production. Many economists contend that, even if China significantly appreciated its currency, the United States would still need to increase its savings and reduce domestic demand (particularly the budget deficit), and China would have to lower its savings and increase consumption, in order to reduce trade imbalances in the long-run.



Date of Report: July 13, 2010
Number of Pages: 36
Order Number: RS21625
Price: $29.95

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Wednesday, July 21, 2010

U.S.-Funded Assistance Programs in China


Thomas Lum
Specialist in Asian Affairs


This report provides legislative and policy background concerning U.S. assistance programs in the People's Republic of China (PRC). The U.S. Agency for International Development (USAID) does not have an official presence in China. The majority of congressional foreign operations appropriations for the PRC promotes the rule of law, civil society, and political development in the country. These programs constitute a key component of U.S. efforts to promote democratic change in the PRC. Other related U.S. activities include participation in official bilateral dialogues on human rights, public diplomacy programs, and open criticism of PRC policies.

During the past decade, U.S. democracy assistance to China has grown in size and breadth. Funding has grown from an annual average of $9.9 million during the 2000-2004 period, mostly for democracy assistance and aid to Tibetans, to $35.3 million during the 2005-2009 period. During the latter period, the United States supported not only democracy and Tibetan programs but also HIV/AIDS programs, educational exchanges, and expanded rule of law programs in the PRC that include environmental law and criminal justice. Between 2001 and 2010, the United States government authorized or made available nearly $275 million for foreign operations programs in China, of which $229 million was devoted to rule of law and civil society programs and to Tibetan communities.

The Department of State's Human Rights and Democracy Fund (HRDF) has been the principal means of support for U.S. rule of law and civil society activities in China. The Development Assistance (DA) account, administered by the U.S. Agency for International Development (USAID), has been a growing source of funding for rule of law programs. The U.S. Congress has played a leading role in initiating programs and determining funding levels for these objectives. Non-governmental organizations, such as the Ford Foundation, and other countries also provide substantial democracy-related assistance to the PRC.

U.S. rule of law and civil society programs have created a web of relationships among governmental and non-governmental actors and educational institutions in the United States and China. Despite growing contacts and common interests among these entities, Chinese civil society groups remain subject to PRC restrictions and periodic crackdowns on their activities. Some of these groups also have been affected by the ups and downs of the U.S.-China bilateral relationship. Some experts argue that foreign-funded rule of law and civil society efforts in China have produced limited gains due to PRC political constraints. Others contend that such programs have helped to build social foundations for political change and have bolstered reform-minded officials in the PRC government.



Date of Report: July 9, 2010
Number of Pages: 13
Order Number: RS22663
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Thursday, July 15, 2010

U.S.-Vietnam Relations in 2010: Current Issues and Implications for U.S. Policy


Mark E. Manyin
Specialist in Asian Affairs


After communist North Vietnam's victory over U.S.-backed South Vietnam in 1975, U.S.- Vietnam had minimal relations until the mid-1990s. Normal diplomatic relations were established on July 11, 1995. Since then, bilateral ties have expanded to the point where leaders on both sides describe each other as partners on a number of issues. The maturation of relations has been particularly marked since the mid-2000s, when Vietnam made a decision to upgrade the relationship; since then, overlapping strategic and economic interests have compelled the United States and Vietnam to improve ties across a wide spectrum of issues. Congress played a significant role in the normalization process and continues to influence the state of relations.

In the United States, voices favoring improved relations have included those reflecting U.S. business interests in Vietnam's reforming economy and U.S. strategic interests in expanding cooperation with a populous country—Vietnam has 88 million people—that has an ambivalent relationship with China. Others argue that improvements in bilateral relations should be conditioned upon Vietnam's authoritarian government improving its record on human rights. Vietnam is asserting itself on the regional stage; for instance, in 2010 it is the chair of the Association of Southeast Asian Nations (ASEAN). The population of more than 1 million Vietnamese-Americans, as well as legacies of the Vietnam War, also drive continued U.S. interest.

Vietnamese leaders have sought to upgrade relations with the United States in part due to the desire for continued access to the U.S. market and to worries about China's expanding influence in Southeast Asia. That said, Sino-Vietnam relations are Vietnam's most important bilateral relationship and Vietnamese leaders must tiptoe carefully along the tightrope between Washington and Beijing, such that improved relations with one capital not be perceived as a threat to the other. Also, some Vietnamese remain suspicious that the United States' long-term goal is to erode the Vietnamese Communist Party's (VCP) monopoly on power.

Economic ties are the most mature aspect of the U.S.-Vietnam bilateral relationship. The United States is Vietnam's largest export market and in 2009 was its largest source of foreign direct investment. Bilateral trade has grown more than fivefold since the United States extended "normal trade relations" (NTR) treatment to Vietnam in 2001. Increased bilateral trade also has been fostered by Vietnam's market-oriented reforms and the resulting growth in its foreign invested and privately-owned sectors. From 1987-2007, Vietnam's annual gross domestic product (GDP) growth averaged over 7%. Since then, Vietnam's economy has been buffeted by economic difficulties that have lowered growth rates and raised inflation. Vietnam is one of the largest recipients of U.S. assistance in East Asia; since the late 2000s, annual U.S. aid typically surpasses $100 million, much of it for health-related activities. The Obama Administration is debating whether to add Vietnam to the Generalized System of Payments (GSP) program, which extends duty-free treatment to certain products that are imported from designated developing countries. The United States and Vietnam are two of eight countries negotiating a Trans-Pacific Strategic and Economic Partnership (TPP) regional free trade agreement (FTA).

Human rights are the biggest thorn in the side of the relationship. Vietnam is a one-party, authoritarian state ruled by the Vietnamese Communist Party (VCP), which appears to be following a strategy of permitting most forms of personal and religious expression while selectively repressing individuals and organizations that it deems a threat to the party's monopoly on power. Most observers argue that the government, which already had tightened restrictions on dissent and criticism since 2007, intensified its suppression in 2009 and early 2010. 
.


Date of Report: July 7, 2010
Number of Pages: 37
Order Number: R40208
Price: $29.95

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Wednesday, July 14, 2010

U.S.-Australia Civilian Nuclear Cooperation: Issues for Congress


Mary Beth Nikitin
Analyst in Nonproliferation

Bruce Vaughn
Specialist in Asian Affairs


Australia and the United States have cooperated in the peaceful use of nuclear energy since the mid-1950s. The framework for this cooperation is a civilian nuclear cooperation agreement as required by section 123 of the Atomic Energy Act. President Obama transmitted the proposed text of the latest renewal agreement to Congress on May 5, 2010, along with the required Nuclear Proliferation Assessment Statement (NPAS) and his determination that the agreement promotes U.S. national security. Congress has 30 days of continuous session for consultations with the Administration, followed by an additional 60 days of continuous session to review the agreement. If not opposed by a joint resolution of disapproval or other legislation, then the agreement will be considered approved at the end of this time period.

The United States and Australia first concluded a civilian nuclear cooperation agreement in 1957. That agreement was updated in 1979. Australia sells around 36% of its $1 billion in uranium exports to the United States. The United States is also a major processor of Australian uranium sold to other countries. Australia does not currently possess any nuclear power plants, but it operates one research reactor.



Date of Report: July 7, 2010
Number of Pages: 12
Order Number: R41312
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North Korea: Back on the Terrorism List?


Mark E. Manyin
Specialist in Asian Affairs


Whether North Korea should be included on the U.S. list of terrorism-supporting countries has been a major issue in U.S.-North Korean diplomacy since 2000, particularly in connection with negotiations over North Korea's nuclear program. North Korea demanded that the Clinton and Bush Administrations remove it from the terrorism support list. On October 11, 2008, the Bush Administration removed North Korea from the terrorism list.

This move was one of the measures the Bush Administration took to implement a nuclear agreement that it negotiated with North Korea in September 2007 and finalized details of in April 2008. The agreement was reached under the format of the six party talks, which involve the United States, North Korea, South Korea, China, Japan, and Russia. The President also announced that he was immediately lifting sanctions on North Korea under the U.S. Trading with the Enemy Act. North Korea's obligations under this nuclear agreement were to allow the disabling of its plutonium facility at Yongbyon and present to the United States and other government in the six party talks a declaration of its nuclear programs. North Korea submitted its declaration in June 2008.

The removal of North Korea from the terrorism list, however, did not result in an early conclusion of the February 2007 six party nuclear agreement. The North Korean government and the Bush Administration disagreed over the content of an October 2008 agreement on verification, particularly over whether it allowed inspectors to take samples of nuclear materials from the Yongbyon installations. The other parties to the talks also had not completed the delivery of 1 million tons of heavy oil that they had promised in the February 2007 agreement. Against this backdrop, along with an apparent stroke suffered by North Korean leader Kim Jong-il, the six party process broke down.

In the months after the breakdown of the talks, North Korea took a series of actions that have led to calls for its reinstatement on the terrorism list. In April 2009, North Korea launched devices suspected of being long-range missiles. In May 2009, North Korea tested a nuclear device. In March 2010, a South Korean naval vessel, the Cheonan, sank in waters disputed by the two Koreas. Nearly 50 South Korean sailors died in the incident. A multinational investigation team led by South Korea determined that the ship was sunk by a North Korean submarine. In June 2010, the State Department determined that the Cheonan sinking was not an act of terrorism and thus by itself was an insufficient reason for placing North Korea back on the terrorism list.

Meanwhile, reports in 2009 and 2010 from French, Japanese, South Korean, and Israeli sources described North Korean programs to provide arms and training to Hezbollah in Lebanon and the Tamil Tigers in Sri Lanka, two groups on the U.S. list of international terrorist organizations. Large quantities of North Korean arms bound for Iran, intercepted in 2009, contained weapons that Iran supplies heavily to Hezbollah and Hamas. Moreover, a large body of reports describe a long-standing, collaborative relationship between North Korea and the Iranian Revolutionary Guard Corps.

This report describes the rationales for including North Korea on the terrorism list from 1987- 2008, for North Korea's delisting in 2008, and the debate in 2010 over whether to re-list North Korea. The major impact of a decision to return North Korea to the list would likely be symbolic, because removing North Korea from the list does not appear to have provided Pyongyang with direct, tangible benefits.



Date of Report: June 29, 2010
Number of Pages: 36
Order Number: RL30613
Price: $29.95

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Thursday, July 8, 2010

Taiwan: Major U.S. Arms Sales Since 1990


Shirley A. Kan
Specialist in Asian Security Affairs


This report discusses U.S. security assistance to Taiwan, or Republic of China (ROC), including policy issues for Congress and legislation. Congress has oversight of the Taiwan Relations Act (TRA), P.L. 96-8, which has governed arms sales to Taiwan since 1979, when the United States recognized the People's Republic of China (PRC) instead of the ROC. Two other relevant parts of the "one China" policy are the August 17, 1982, U.S.-PRC Joint Communique and the "Six Assurances" to Taiwan. U.S. arms sales to Taiwan have been significant. The United States also has expanded military ties with Taiwan after the PRC's missile firings in 1995-1996. However, the U.S.-ROC Mutual Defense Treaty terminated in 1979.

At the last annual U.S.-Taiwan arms sales talks on April 24, 2001, President George W. Bush approved for possible sale diesel-electric submarines, P-3 anti-submarine warfare (ASW) aircraft (linked to the submarine sale), four decommissioned U.S. Kidd-class destroyers, and other items. Bush also deferred decisions on Aegis-equipped destroyers and other items, while denying other requests. Afterward, attention turned to Taiwan, where the military, civilian officials, and legislators from competing political parties debated contentious issues about how much to spend on defense and which U.S. weapons to acquire, despite the increasing threat (including a missile buildup) from the People's Liberation Army (PLA). In 2003, the Bush Administration pointed Taiwan to three priorities for defense: command and control, missile defense, and ASW. Since then, the Pentagon has broadened its concern from Taiwan's arms purchases to its defense spending, seriousness in self-defense and protection of secrets, joint capabilities, operational readiness, critical infrastructure protection, and asymmetrical advantages. Blocked by the Kuomintang (KMT) party in the Legislative Yuan (LY) that opposed the Democratic Progressive Party (DPP)'s president (2000-2008), the Special Budget (not passed) for submarines, P-3C ASW aircraft, and PAC-3 missile defense systems was cut from $18 billion in 2004 to $9 billion (for submarines only) in 2005. In March 2006, Taiwan's defense minister requested a 2006 Supplemental Defense Budget (not passed) in part for submarine procurement, P-3Cs, and PAC-2 upgrades (not new PAC-3 missiles). In June 2007, the LY passed Taiwan's 2007 defense budget with funds for P-3C planes, PAC-2 upgrades, and F-16C/D fighters. In December 2007, the LY approved $62 million to start the sub design phase. After the KMT's Ma Ying-jeou became President in May 2008, he retained the requests but has cut the defense budgets.

Attention also turned to U.S. decisions on pending arms sales. In 2008, congressional concerns mounted about a suspected "freeze" in President Bush's notifications to Congress on arms sales. On October 3, 2008, Bush finally notified Congress. However, he submitted six of the eight pending programs (not a "package") for a combined value of $6.5 billion. Despite the concerns in 2008, President Obama repeated that cycle to wait to decide on submissions for congressional review all at one time (on January 29, 2010) five programs with a total value of $6.4 billion. Like Bush, President Obama did not notify the submarine design program (the only one pending from decisions in 2001) and has not accepted Taiwan's formal request for F-16C/D fighters (pending since 2006). After that, the Obama Administration has held up progress on three more programs. Legislation in the 111th Congress include: National Defense Authorization Act (NDAA) for FY2010, P.L. 111-84; H.Res. 733 (Gingrey); H.Con.Res. 200 (Andrews); H.R. 4102 (Ros- Lehtinen); and H.Res. 927 (Barton). Moreover, Senators Cornyn, Inhofe, and Lieberman stressed to Defense Secretary Robert Gates the NDAA's directive for an assessment of Taiwan's air defense forces, including its F-16 fighters. Submitted on February 16, the assessment found that Taiwan has diminished ability to deny the PRC air superiority. On May 12, 136 Representatives sent President Obama a letter to urge a sale of more F-16 fighters to Taiwan.



Date of Report: July 2, 2010
Number of Pages: 68
Order Number: RL30957
Price: $29.95

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Tuesday, July 6, 2010

Thailand: Background and U.S. Relations

Emma Chanlett-Avery
Specialist in Asian Affairs


U.S.-Thailand relations are of interest to Congress because of Thailand's status as a long-time military ally and a significant trade and economic partner. However, ties have been complicated by deep political and economic instability in the wake of the September 2006 coup that displaced Prime Minister Thaksin Shinawatra. After December 2007 parliamentary elections returned many of Thaksin's supporters to power, the U.S. government lifted the restrictions on aid imposed after the coup and worked to restore bilateral ties. Meanwhile, street demonstrations rocked Bangkok and two prime ministers were forced to step down because of court decisions. A new coalition headed by Prime Minister Abhisit Vejjajiva assumed power in December 2008. Bangkok temporarily stabilized, but again erupted into open conflict between the security forces and antigovernment protestors in March 2010. By May, the conflict escalated into the worst violence in Bangkok in decades. With the capital gripped by uncertainty, many questions remain on how U.S. relations will fare as Bangkok seeks some degree of stability. 

Despite differences on Burma policy and human rights issues, shared economic and security interests have long provided the basis for U.S.-Thai cooperation. Thailand contributed troops and support for U.S. military operations in both Afghanistan and Iraq and was designated as a major non-NATO ally in December 2003. Thailand's airfields and ports play a particularly important role in U.S. global military strategy, including having served as the primary hub of the relief effort following the 2004 Indian Ocean tsunami. 

Since 2006, Thai politics have been dominated by a fight between populist forces led by Thaksin (now in exile) and his opponents: a mix of conservative royalists and military figures, and other Bangkok elites. Like Thaksin, none of the successive governments has been able to stem the violence of an insurgency in the southern majority-Muslim provinces. A series of attacks by insurgents and counter-attacks by security forces has reportedly claimed around 4,000 lives since January 2004. 

With its favorable geographic location and broad-based economy, Thailand has traditionally been considered among the most likely countries to play a major leadership role in Southeast Asia and has been an aggressive advocate of increased economic integration in the region. A founding member of the Association of Southeast Asian Nations (ASEAN), Thailand maintains close ties with China and is pursuing FTAs with a number of other countries. Given its ties with the United States, Thailand's stature in the region may affect broader U.S. foreign policy objectives and prospects for further multilateral economic and security cooperation in Southeast Asia. This report will be updated periodically.



Date of Report: June 21, 2010
Number of Pages: 26
Order Number: RL32593
Price: $29.95

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U.S.-China Military Contacts: Issues for Congress

Shirley A. Kan
Specialist in Asian Security Affairs

This CRS Report discusses policy issues regarding military-to-military (mil-to-mil) contacts with the People's Republic of China (PRC) and provides a record of major contacts and crises since 1993. The United States suspended military contacts with China and imposed sanctions on arms sales in response to the Tiananmen Crackdown in 1989. In 1993, the Clinton Administration re-engaged with the top PRC leadership, including China's military, the People's Liberation Army (PLA). Renewed military exchanges with the PLA have not regained the closeness reached in the 1980s, when U.S.-PRC strategic cooperation against the Soviet Union included U.S. arms sales to China. Improvements and deteriorations in overall bilateral relations have affected military contacts, which were close in 1997-1998 and 2000, but marred by the 1995-1996 Taiwan Strait crisis, mistaken NATO bombing of a PRC embassy in 1999, the EP- 3 aircraft collision crisis in 2001, and aggressive naval confrontations (including in 2009). 

In 2001, President Bush continued the policy of engagement with China, but the Pentagon skeptically reviewed and cautiously resumed mil-to-mil contacts. Secretary of Defense Donald Rumsfeld, in 2002, resumed the Defense Consultative Talks (DCT) with the PLA (first held in 1997) and, in 2003, hosted General Cao Gangchuan, a Vice Chairman of the Central Military Commission (CMC) and Defense Minister. General Richard Myers, Chairman of the Joint Chiefs of Staff, visited China in January 2004, as the highest ranking U.S. military officer to do so since November 2000. Rumsfeld visited China in 2005, the first visit by a defense secretary since William Cohen's visit in 2000. In 2006, a CMC Vice Chairman, General Guo Boxiong, made the first visit to the United States by the highest ranking PLA commander after 1998. 

Issues for the 111th Congress include whether the Obama Administration has complied with legislation overseeing dealings with the PLA and has pursued a program of contacts with the PLA that advances a prioritized set of U.S. security interests. Oversight legislation includes the Foreign Relations Authorization Act for FY1990-FY1991 (P.L. 101-246) and National Defense Authorization Act (NDAA) for FY2000 (P.L. 106-65). Skeptics and proponents of military exchanges with the PRC have debated whether the contacts have significant value for achieving U.S. objectives and whether the contacts have contributed to the PLA's warfighting capabilities that might harm U.S. security interests. Some have argued about whether the value that U.S. officials have placed on the contacts overly extends leverage to the PLA. Officials believe talks can serve U.S. interests that include the safety of U.S. military personnel; conflict prevention and crisis management; transparency and reciprocity; tension reduction over Taiwan; weapons nonproliferation; strategic nuclear/space talks; counterterrorism; and accounting for POW/MIAs. 

Policymakers could review the approach to mil-to-mil contacts. U.S. defense officials have reported inadequate cooperation from the PLA, including denials of port visits at Hong Kong and aid to U.S. Navy ships in distress (Thanksgiving 2007). The PLA has tried to use its suspensions of exchanges while blaming U.S. "obstacles" (including arms sales to Taiwan, legal restrictions on contacts with the PLA, and the Pentagon's reports to Congress on the PLA). The PRC's harassment of U.S. surveillance ships (in 2009) and increasing assertiveness in maritime areas have shown the limits to the results of mil-to-mil talks and PLA restraint. Still, at the Strategic and Economic Dialogue in July 2009, President Obama called for military contacts to diminish disputes with China. The NDAA for FY2010 (P.L. 111-84) amended the requirement in P.L. 106- 65 for the report on PRC military power to expand the focus to security developments involving the PRC, add cooperative elements, and fold in another requirement to report on mil-to-mil contacts, including a new strategy for such contacts
.


Date of Report: June 18, 2010
Number of Pages: 64
Order Number: RL32496
Price: $29.95

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