Taiwan: Major U.S. Arms Sales Since 1990

Shirley A. Kan
Specialist in Asian Security Affairs

This report, updated as warranted, 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, there is no defense treaty with Taiwan. 

At the 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 systems to acquire, despite the increasing threat (including a missile buildup) from the People's Liberation Army (PLA), as described in the Pentagon's reports to Congress on PRC military power. In February 2003, the Administration pointed Taiwan to three priorities for defense: command and control, missile defense, and ASW. Some in the United States questioned Taiwan's seriousness about its self-defense, level of defense spending, and protection of secrets. The Pentagon broadened its focus from Taiwan's arms purchases to its regular defense budget, readiness for self-defense, and critical infrastructure protection. 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, Taiwan retained the requests but has cut the defense budget. 

Also, attention 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 eight pending arms sales as well as his refusal to accept Taiwan's request for F-16C/D fighters. On October 3, 2008, Bush finally notified Congress. However, he submitted six of the eight pending sales (not a "package") for a combined value of about $6.5 billion. The Administration did not submit for congressional review the pending programs for Black Hawk utility helicopters or the submarine design. Moreover, the sale of PAC-3 missile defense systems was broken up into two parts (with notification of one part). Other pending programs include the Osprey-class minehunters that Congress authorized for sale in P.L. 110-229 and follow-on technical support for the Posheng command and control program. Congress might further assert its legislated role in any objective determinations of Taiwan's needs (including for new fighters) and oversight of President Obama's adherence to the TRA. The Administration argues that it has been reviewing pending arms sales but did not notify Congress of any such programs in 2009. Legislation in the 111th Congress include: National Defense Authorization Act 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).


Date of Report: January 26, 2010
Number of Pages: 65
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Chinese Tire Imports: Section 421 Safeguards and the World Trade Organization (WTO)

Jeanne J. Grimmett
Legislative Attorney

On April 20, 2009, the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union filed a petition with the U.S. International Trade Commission (ITC) requesting that it initiate an investigation under Section 421 of the Trade Act of 1974, a trade remedy statute addressing import surges from China, to examine whether Chinese passenger vehicle and light truck tires were causing market disruption to U.S. tire producers. Market disruption will be found to occur under Section 421 whenever imports of a Chinese product that is "like or directly competitive with" a domestic product "are increasing rapidly ... so as to be a significant cause of material injury, or threat of material injury, to the domestic industry." The ITC initiated the investigation (TA-421-7) on April 24, 2009. 

As a result of its investigation, the ITC in June 2009 voted 4-2 that imports of the subject tires were causing domestic market disruption and recommended that the President impose an additional duty on these items for three years at an annually declining rate. The ITC also recommended expedited consideration of trade adjustment assistance applications filed by affected firms or workers. On September 11, 2009, President Obama proclaimed increased tariffs on Chinese tires for three years effective September 26, 2009, albeit at lower rates than those recommended by the ITC. The tariff increase is 35% ad valorem in the first year, 30% in the second year, and 25% in the third year. The President also directed the Secretaries of Labor and Commerce to expedite applications for trade adjustment assistance and to provide other available economic assistance to affected workers, firms, and communities. The President may review the tariffs in six months and, after receiving an ITC report on the probable effects of any change, may modify, reduce or terminate them. Although six petitions were filed under Section 421 in the past and the ITC found that market disruption existed in four out of six of its investigations, President Bush decided against providing import relief under the statute in these earlier cases. 

Section 421 was enacted as one element of 2000 legislation that permitted the President to grant most-favored-nation (MFN) tariff treatment to Chinese products upon China's accession to the World Trade Organization (WTO). Section 421 authorizes the President to impose safeguards— i.e., temporary measures such as import surcharges or quotas—on Chinese goods if domestic market disruption is found. The statute implements a China-specific safeguard mechanism contained in China's WTO Accession Protocol that may be utilized by WTO Members through December 2013. The Protocol provision is separate from Article XIX of the General Agreement on Tariffs and Trade (GATT) 1994 and the WTO Agreement on Safeguards, which allow WTO Members to respond to injurious import surges generally but on a stricter basis than under the Protocol. A major difference is that the Protocol provision permits a safeguard to be applied only to Chinese products while the Safeguards Agreement requires that a safeguard be applied to a product regardless of its source. 

China filed a WTO complaint against the United States on September 14, 2009, and requested a dispute panel on December 21, 2009, claiming that the Section 421 tariffs violate U.S. GATT obligations to accord Chinese tires MFN tariff treatment and not to exceed negotiated tariff rates, that the United States imposed tariffs under China's Accession Protocol without first attempting to justify them under general GATT and WTO safeguard provisions, and that Section 421 and its application in this case violate U.S. obligations under the Protocol. A dispute panel was established on January 19, 2010. Assuming that panelists are seated, this would be the first WTO dispute panel to consider the obligations of other WTO Members under the China-specific safeguard.


Date of Report: January 26, 2010
Number of Pages: 29
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China-U.S. Poultry Dispute

Renée Johnson
Specialist in Agricultural Policy

Geoffrey S. Becker
Specialist in Agricultural Policy

In April 2006, the U.S. Department of Agriculture's (USDA's) Food Safety and Inspection Service (FSIS) published a final rule allowing certain poultry products processed in China to be imported into the United States. However, USDA appropriations measures for recent years have prohibited FSIS from using funds to implement the rule. In October 2009, Congress enacted the FY2010 Agriculture appropriations bill (P.L. 111-80), which contains language that seeks to address this issue. Instead of continuing this prohibition, the FY2010 Agriculture appropriations bill allows USDA to use appropriated funds to implement the FSIS rule permitting U.S. imports of certain processed poultry and poultry products from China, if specified preconditions are met. 

The appropriations language is intended not only to ensure the safety of Chinese poultry imports but also to address trade concerns. The Chinese government has strongly criticized the ban on implementation of the rule as a violation of trade rules and, on April 17, 2009, formally requested World Trade Organization (WTO) consultations on the issue. The consultation period, which has expired, is considered the first step toward referral to a dispute settlement panel. 

Many food safety advocates have supported the ban on the poultry rule, arguing that China—the third leading foreign supplier of food and agricultural imports into the United States—lacks effective food safety protections. They have noted that China has experienced outbreaks of highly pathogenic avian influenza, and have argued that USDA's determination that Chinese-processed poultry was appropriately regulated was flawed. These advocates have argued, among other things, that China has been the source of a number of unsafe consumer products, including dairy products, infant formula, and wheat gluten (used in pet and animal feeds) intentionally contaminated with melamine to heighten measurable protein levels, and farmed seafood with illegal levels of antibiotics. 

A coalition of U.S. animal product exporters has opposed the appropriations language banning the China poultry rule. This group has argued that continuation of the ban has fueled trade retaliation by China, where a rising quantity of U.S. poultry products are now being marketed and where U.S. beef exporters are seeking re-entry for their products. China announced on September 14, 2009, that it was launching anti-dumping and anti-subsidies investigations into chicken meat (and automobile parts, after the United States imposed import safeguard tariffs on Chinese tires) produced in the United States, which Chinese manufacturers allege have harmed them domestically due to unfair competition. U.S. meat and poultry exporters believe that such trade disputes threaten an estimated $1.5 billion in livestock and poultry exports to China annually, including $774 million in poultry product sales. China has reported that over 70% of its poultry imports are from the United States. 


Date of Report: January 20, 2010
Number of Pages: 11
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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 that assumed power in December 2008 has proven surprisingly durable, but anti-government forces remain active and organized. Many questions remain on how relations will fare as Bangkok seeks political stability. With Thai nationalism apparently on the rise, some analysts see a risk of drift in the U.S.-Thai relationship, although no major shift in overall cooperation. 

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: January 22, 2010
Number of Pages: 24
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Guam: U.S. Defense Deployments

Shirley A. Kan
Specialist in Asian Security Affairs

Larry A. Niksch
Specialist in Asian Affairs

Since 2000, the U.S. military has been building up forward-deployed forces on the U.S. territory of Guam to increase deterrence and power projection for possible responses to crises and disasters, counter-terrorism, and contingencies in support of South Korea, Japan, the Philippines, Taiwan, or elsewhere in Asia. The defense buildup on Guam has been moderate. Nonetheless, China has concerns about the defense buildup, suspecting it to be directed against China. Guam's role has increased with plans to withdraw some U.S. forces from Japan and South Korea. 

In 2006, the United States and Japan agreed on a "Roadmap" to strengthen their alliance, including a buildup on Guam to cost $10.3 billion, with Japan contributing 60%. The goals are to start the related construction on Guam by 2010 and to complete relocation of 8,000 marines and their 9,000 dependents from Okinawa to Guam by 2014. 

On February 17, 2009, Secretary of State Hillary Clinton visited Tokyo and signed the bilateral "Agreement Between the Government of the United States of America and the Government of Japan Concerning the Implementation of the Relocation of the III Marine Expeditionary Force Personnel and Their Dependents From Okinawa to Guam" that reaffirmed the "Roadmap" of May 1, 2006. The two governments agreed that of the estimated $10.27 billion cost of the facilities and infrastructure development for the relocation, Japan will provide $6.09 billion, including up to $2.8 billion in direct cash contributions (in FY2008 dollars). The United States committed to fund $3.18 billion plus about $1 billion for a road. 

However, on September 16, 2009, Yukio Hatoyama of the Democratic Party of Japan became Prime Minister. This political change raised a question about whether Japan would seek to renegotiate the agreement, even while the United States seeks its implementation. This dispute has implications for the relocation of marines from Okinawa to Guam. In a meeting in Honolulu on January 12, 2010, with Secretary of State Clinton, Japan's Foreign Minister conveyed Hatoyama's promise to decide by May on the location of Okinawa's Futenma Replacement Facility for the U.S. Marine Corps, on which depends the relocation of marines to Guam. 

The National Defense Authorization Act for FY2010 (H.R. 2647, enacted as P.L. 111-84 on October 28, 2009) authorized the first substantial incremental funding for the relocation of marines from Okinawa to Guam, but conditioned upon the Defense Department's submission to Congress of a Guam Master Plan. Among a number of provisions related to Guam in the legislation and conference report, Congress designated the Deputy Secretary of Defense to lead a Guam Executive Council and coordinate interagency efforts related to Guam. Congress also required a report on training, readiness, and movement requirements for Marine Forces Pacific, with a sense of Congress that expansion of Marine Corps training should not impact the implementation of the U.S.-Japan agreement on relocation from Okinawa to Guam. 

Updated as warranted, this CRS Report discusses major developments and policy issues. On appropriations related to military construction on Guam, see CRS Report R40731, Military Construction, Veterans Affairs, and Related Agencies: FY2010 Appropriations. 

Date of Report: January 19, 2010
Number of Pages: 11
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