[Congressional Record (Bound Edition), Volume 156 (2010), Part 11]
[Senate]
[Pages 15732-15736]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        REPORT ON FOREIGN TRAVEL

  Mr. SPECTER. Mr. President, It has been my custom to make a report to 
the Congress, my constituents, and the general public when I return 
from a trip. I have sought recognition to speak about foreign travel I 
made to Beijing, Hanoi and Taipei from August 6, 2010, to August 16, 
2010.
  We departed Dulles International Airport on United Airlines on Friday 
morning, August 6 en route to Beijing, China. This was my sixth visit 
to China, with the most recent taking place in 2006.
  On Sunday, August 8, we had a meeting with Mr. William Farris, 
Managing Counsel for Google. Mr. Farris had previously served as 
general counsel for the Congressional-Executive Commission on China, 
which was created by congressional statute in 2001 to oversee human 
rights and the rule of law. Especially with his background in these 
critical issues, Mr. Farris offered his views on the potential for 
unfettered access to the internet in China, the recent cyber attack 
against Google, and an overview of the Chinese business environment. 
Although Google initially censored its search engine in China, I was 
pleased that it has decided to offer a reroute through Hong Kong 
servers in order to provide uncensored access. China continues to put 
pressure on international firms over the nature of content produced. 
The Chinese government maintains a block on many U.S. Websites, 
including Facebook, Twitter, and YouTube. The pressure that the Chinese 
government places on firms has already led to the departure of major 
foreign ventures. Go Daddy, a leading U.S. Web site registration firm, 
has recently left the Chinese market. Increasing freedom will 
facilitate economic growth and attract investment.
  In my fiscal year 2011 appropriations request letter to the State and 
Foreign Operations Subcommittee on the Senate Appropriations Committee, 
I urged the provision $50 million from the democracy fund to promote 
widespread, secure Internet use by individuals residing in countries 
with Internet monitoring, censorship, and control. This is a low-cost 
method of allowing people, especially those living under repressive 
regimes, to access all-source, unfiltered information. This capability 
enables freedom of thought, expression, and the unimpeded flow of ideas 
and information. One group, the Global Internet Freedom Consortium--an 
alliance of several organizations specializing in anti-censorship 
technologies--has submitted several important proposals. This group has 
been particularly effective in China, neutralizing the Chinese 
government's ``Golden Shield'' and ``Green Dam'' barriers.
  As I wrote in my July 7, 2009, op-ed in the Pittsburgh Post-Gazette:

       The United States must fight fire with fire in finding ways 
     to breach these cyberwalls,

[[Page 15733]]

     which dictatorships use to control their people and keep 
     themselves in power. Tearing down these walls can match the 
     effect of what happened when the Berlin Wall was torn down. 
     No one understands this better than the dictator states.

  The Internet has proven to be one of the most powerful tools for 
cultivating nascent democracies. American companies who have abetted 
repressive regimes by censoring information should reexamine their 
relationships and ways of doing businesses.
  That afternoon, we met with Ambassador Jon F. Huntsman Jr. and his 
wife, Mrs. Mary Kaye Huntsman, at the Ambassador's residence. I have 
known Ambassador Huntsman since his days as Deputy U.S. Trade 
Representative in the George W. Bush administration as well as the 
Governor of Utah. Ambassador Huntsman, fluent in Mandarin, brought 
unique skills to this post, gleaned from studying China for much of his 
life, serving as a missionary in the Republic of China, and extensive 
business experience. We discussed different dynamics of the U.S.-China 
relationship, including international trade, regional security, and 
human rights.
  On Monday, August 9, we began the day with a country team briefing 
from the U.S. Embassy in China. The briefing was led by Robert 
Goldberg, the Deputy Chief of Mission, and included Christopher Adams, 
Minister Counselor for Trade Affairs at the Office of the U.S. Trade 
Representative, Aubrey Carlson, Political Minister Counselor, MaryKay 
Carlson, Acting Consul General, David Dollar, U.S. Treasury Economic 
and Financial Emissary to China, Robert Forden, Acting Economic 
Minister Counselor, Bradley Gehrke, Defense Attache, Randal Phillips, 
Minister Counselor for Plans and Programs, and William Zarit, Minister 
Counselor for Commercial Affairs from the Department of Commerce. 
Following the Country Team Briefing, I met John Klena, Julie Schneider, 
Andriana Wiegand, Sanford Dawson, Frank Joseph, Msg. Simon Price, Msg. 
Michael Fernald, Msg. Kenneth Hayles, and Megan Kellogg, fellow 
Pennsylvanians who admirably serve the U.S. through our Embassy in 
Beijing.
  Although the U.S. has many shared interests with China, it is 
important that we do not shy away from issues of potential conflict. I 
pushed for the need to gain leverage in our relationship with the 
Chinese in order to get them to change their behavior. I posed the 
question whether congressional action on trade issues and other 
disagreements with China would be helpful in pursuing U.S. policy aims. 
The country team indicated that congressional engagement helps China 
understand different stakeholders in the U.S. system. One other way to 
engage the Chinese is to coordinate with other countries and the 
business community to apply unified pressure against China on specific 
trade issues.
  An area of concern is China's commitment to reducing the 
proliferation of nuclear weapons, especially with regard to Iran and 
North Korea. Although China initially resisted a new round of sanctions 
against Iran this year, China seems to have been compliant with United 
Nations Security Council resolutions. China has significant energy and 
banking investments in Iran, and is reluctant to undermine its own 
interests. Iran has a history of using deceptive financial practices to 
circumvent U.N. sanctions, and it is important that all nations block 
banking relations with Iranian financial institutions if those 
transactions could facilitate Iranian nuclear proliferation. I made the 
point that an Israeli strike on Iranian nuclear weapons facilities 
could harm China's energy supply, and that China might not have 
considered the impact of such an armed conflict on their bilateral 
relationship with Iran.
  China is North Korea's most significant economic partner and 
continues to provide North Korea with food aid. In 2009, trade between 
China and North Korea surpassed $2.7 billion. In 2009, North Korean 
exports to China rose by 4.3 percent to $793 million. China needs to be 
more willing to collaborate with the U.S. and international partners on 
urging North Korea to abandon its nuclear weapons program and 
destabilizing rhetoric. According to the U.S. Mission, engagement with 
North Korea is the best bilateral working relationship we have with 
China.
  A recurring issue during my visit to the region was territorial 
disputes in Southeast Asia. One especially problematic area is the 
South China Sea, which stretches from Singapore and the Strait of 
Malacca to the Strait of Taiwan. This waterway includes over 200 small 
islands, the majority of which are uninhabitable but rich in such 
natural resources as oil and natural gas. Although projections for 
energy reserves in the South China Sea vary, a 1994 U.S. Geological 
Survey approximated that there were 28 billion barrels of oil. Because 
there has not been any exploratory drilling in the area, estimates for 
energy reserves in two of the particularly resource-rich island chains, 
the Spratly Islands and Paracel Islands, are unknown. According to the 
Energy Information Administration at the Department of Energy, oil 
consumption in Asia is estimated to rise by over 2.7 percent per year 
to nearly 29.8 million barrels per day in 2030. Given the strategic 
importance of the South China Sea, many of its proximate nations have 
competing claims for territory. Although the 1982 United Nations 
Convention on the Law of the Sea has not determined specific 
territorial delineations, it has offered guidelines for the resolution 
of competing claims through negotiation between nations.
  China submitted a map to the United Nations Security Council that 
depicted China's claim to over 80 percent of the South China Sea. The 
map includes a U-shaped line, connected by ``9 dots,'' granting China 
access to portions of the shores of Vietnam, Indonesia, Malaysia, 
Brunei and the Philippines. This year, China began referring to this 
disputed waterway as a ``core national interest,'' similar language 
used to describe Tibet and Taiwan. China currently occupies several of 
the Spratly Islands. Vietnam has also claimed the Spratly Islands, 
occupying a small portion of the chain, as well as the Paracel Islands, 
despite ceding the latter to China after being forcibly removed by the 
Chinese military in 1974. China claims a wide-ranging exclusive 
economic zone, EEZ, an area of a sea zone for which a nation owns 
rights for use of marine resources including fishing and subterranean 
energy stores, in the South China Sea, despite the fact that Brunei, 
Malaysia, the Philippines, Taiwan, and Vietnam all have proximate 
coastal areas and competing claims for sovereignty. An EEZ, as 
described in the U.N. Convention on the Law of the Sea, is permitted 
for certain waterways given their proximity to the coast of a country 
and other geographic factors.
  The South China Sea is host to over one-third of global maritime 
commerce, as well as more than 50 percent of Northeast Asia's energy 
supplies. U.S. forces also use the South China Sea to support the war 
in Afghanistan. China's naval aggression is troubling. China has 
developed its naval power to an unprecedented extent in recent years. 
Not only has China provoked U.S. military and aircraft in the South 
China Sea, but its defense budget has grown by 10 percent per decade, 
only slowing to 7.5 percent in 2010. China's naval modernization began 
in the 1990s, integrating such components as anti-ship ballistic 
missiles, submarines, new weapons acquisition, and surface ships into 
their forces. China has been known to use the force of its navy to 
resolve disputes, in opposition to U.N. treatises and internationally 
accepted norms.
  Increased Chinese aggression is also evident in the Yellow Sea. In 
the wake of a March 26, 2010, North Korean sinking of a South Korean 
ship, killing 46 sailors, the U.S. and South Korea announced, on July 
6, 2010, plans to hold war games. In a July 8, 2010, press report, 
China came out against any foreign warships or planes participating in 
military activities in the Yellow Sea or adjacent areas and ultimately 
hosted its own war games on the same day that the U.S. and South Korea 
did. The Chinese military conducted a drill of unmanned drone aircraft 
in coastal areas to test radar and electromagnetic interference. The 
Yellow Sea is international waters--all nations should have access.

[[Page 15734]]

  Another contentious issue is the manufacturing of counterfeit 
products. In 2009, China was the source of 79 percent of the total 
value of all counterfeit products seized by U.S. Customs, totaling over 
$260 million. Chinese products also accounted for over 90 percent of 
all intellectual property rights-related seizures. The Business 
Software Alliance, an information technology industry group, has 
projected that 80 percent of software used in China has been pirated in 
violation of international copyright infringement laws, an improvement 
from 90 percent in 2004. As a growing power, China should make a 
greater effort to abide by international conventions and respect 
intellectual property rights. In fact, China stands to greatly benefit 
from fostering a business environment that protects innovation. A 10-
percent drop in pirated software since 2004 corresponded to the 
addition of 220,000 jobs in China's legitimate information technology 
sector. Additionally, companies such as Apple, could be more willing to 
introduce new ventures to Chinese markets with assurances that their 
products would be protected. Because Chinese companies preemptively 
registered both the iPad trademark and design patent, Apple has delayed 
market entry of the iPad in China.
  We departed the Embassy for a meeting with the Governor of the 
People's Bank of China, Zhou Xiaochuan. Many of the economic issues in 
the relationship between the U.S. and China have persisted for years. 
Although Chinese officials have met with Secretary Geithner and former 
Secretaries of the Treasury, the U.S. should continue to develop a 
frank dialogue with the Chinese. The U.S. Embassy counts 49 formal 
dialogues with the Chinese regarding financial and economic 
cooperation, although the Chinese count 60. At the meeting, I pressed 
the issue of China's currency manipulation. Governor Zhou mentioned 
that the Chinese economy is transitioning, noting that workers' wages 
have increased by 20 percent and that China is allowing for increased 
private sector growth. Although the Chinese economy grew at 7.7 percent 
in 2009, Governor Zhou expected China's export growth rate to slow over 
the next 3 to 5 years. I objected that 5 years would be too long to 
wait as the U.S. is losing jobs, especially in industries such as steel 
and rubber. I argued that Congress is contemplating legislating on the 
currency issue to rectify imbalances. Governor Zhou discussed how 
economic uncertainty has made the Chinese government more careful about 
economic policy changes and that China has economic challenges of its 
own, including a 10-percent unemployment rate. I retorted that the U.S. 
unemployment rate is currently at 9.6 percent.
  I informed Governor Zhou about how Chinese subsidies and dumping are 
unfairly harming the steel and tire industries. According to the most 
recent data issued by the Foreign Trade Division of the U.S. Census, 
the annual trade deficit with China stands at $93.3 million as of May 
2010. Employment in American manufacturing has plummeted at the same 
time that Chinese imports and U.S. trade deficits have set records. The 
trade deficit with China is the largest imbalance ever recorded between 
two countries, in part because of China's deliberate undervaluing of 
its currency. I brought up two cases I recently argued before the 
International Trade Commission, ITC, for which the ITC found that 
Chinese tire imports had disrupted the U.S. tire industry. In December 
of 2009, I urged the ITC to charge China with dumping of tubular steel 
and to impose sanctions. I argued that the lost jobs, reduced hours, 
and plant shutdowns constituted a ``severe and intolerable harm.'' By 
the spring of 2009, 6 of 11 high grade tubular steel plants in the 
country, including mills in Koppel and Ambridge, PA, were idle as a 
result of Chinese imports. While the Koppel and Ambridge plants are 
back operating at minimum capacity, overall industry operating capacity 
dropped from 68.5 percent in 2006 to 17.6 percent in 2009. During the 
same period, China's market share of high grade tubular steel rose from 
15 to 37 percent. The ITC determined that the steel industry was 
materially injured or threatened with material injury, and the Commerce 
Department issued an AD duty order on imports ranging from 29.94 to 
99.14 percent.
  I emphasized to Governor Zhou that it is unacceptable for China to 
continue to dump goods on the American economy. He mentioned that China 
understands the pressure on the Pennsylvania industries. He said that 
certain shifts are inevitable and suggested that the U.S. seek 
settlement from the World Trade Organization, WTO. The U.S. has filed 
eight cases at the WTO for trade violations. We settled four cases and 
won four of them. I pressed that the WTO takes too long and that the 
damage from unfair trade practices is done before there is time for a 
resolution.
  Following our meeting with the People's Bank of China, we departed 
for a meeting with Vice Minister of Commerce Wang Chao. We discussed 
the benefit of enhancing the U.S.-China relationship by targeting areas 
of mutual interest. I argued that the current trade relationship 
between the U.S. and China has an unfair impact on the U.S. steel and 
rubber industries. I also pressed the issue of ITC violations and 
Chinese subsidizing and dumping goods. The U.S. is the largest export 
destination of China, and China is the third largest export destination 
for the U.S. There are 58,000 U.S. companies present in China. I told 
the Minister that both China and the U.S. should review subsidies in a 
manner where everything is placed on the table.
  Our last meeting in Beijing was at Tsinghua University, host of the 
Temple University Rule of Law Program in China. On this visit, I met 
with Wang Zhenmin, dean of the Law School and John Smagula, director of 
Asian Programs at Temple University Beasley School of Law. Since 1999, 
Temple has educated 1,024 legal professionals. Seventy-nine percent of 
these participants have been from the public sector, including 370 
judges, 151 prosecutors, 88 government officials, 152 law professors, 
and 47 Non-Governmental Organization legal staff.
  On this visit, I addressed students in the master's in law program. 
The students included: Judges Jiang Minsong, Su Tuan, Wang Didi, Wang 
Xiaoqin, Wei Xigui, Xie Aimei, Yang Lingping, and Zhou Junsheng; 
Prosecutors Feng Guanhua, Lin Bowen, Lu Xiaomei, Tang Shengjia, and 
Yang Li; Chinese Officials Li Sheng, Ma Ning, Pang Lei, Xiang Hang, and 
Yang Kefei; Law Professors Abulimiti Ameina, Lu Yao, and Zheng Yanpu; 
and from the private sector, Dimitrova Deniza, Fan Ping, Guo Qiushi, 
Kuang Lu, Lang Zhuo, Tan Jiacai, Wang Hong, Wang Xin, Xu Changrong, 
Zhang Hairong, Zhang Xianzhong, Zhang Yitong, and Zhu Wenting. The 
group asked me numerous questions on topics ranging from Justice Kagan, 
my battles with cancer, my legislation that would televise Supreme 
Court deliberations, and health care reform. The students were eager to 
discuss the benefits of the Temple University Program in China and how 
the school continues to play an important role in bridging U.S.-Chinese 
relations and cultivating the development of law.
  This trip to China was especially meaningful for me because my last 
visit in August 2006 was on a CODEL led by my friend, the late Senator 
Ted Stevens. The Nation has lost an icon of statesmanship and a 
stalwart public servant. Senator Stevens was an exemplary leader in the 
U.S. Senate, a champion for military and defense issues, a proud 
veteran, and friend of mine. His work on behalf of all Alaskans was 
unparalleled in the U.S. Senate, and his passion for this country will 
be forever remembered. Joan and I are deeply saddened by this news and 
offer our most sincere condolences to Catherine and the Stevens family.
  I want to note that Senator Stevens was awarded the Distinguished 
Flying Cross for flying support missions for the 14th Air Force, also 
known as the Flying Tigers, during World War II. The Flying Tigers, the 
First American Volunteer Group of the Chinese Air Force, were organized 
before the U.S. officially entered World War II, designed to fight 
against Japanese forces. In 1942, the division was officially inducted 
into the U.S. Air Force.

[[Page 15735]]

  On Tuesday, August 10, we departed Beijing on Vietnam Airlines for 
Hanoi, Vietnam. This was my second visit to Vietnam. We were met at the 
airport by Ambassador Michael Michalak and Control Officer Michael 
Goldman.
   On Wednesday, August 11, we departed for the U.S. Embassy in Hanoi 
to receive a country team briefing. This briefing, led by Ambassador 
Michalak, was staffed by Mike Goldman, Acting Political Counselor, 
Patrick Reardon, Defense Attache, Justin Taylor, from the Foreign 
Agricultural Service, Michael Foster, Acting USAID Country Director, 
Eric Frater, the Environment, Science, Technology, and Health Officer, 
Yashue Pai, from the Foreign Commercial Service, Vivian Chao, PEPFAR 
Country Director, Lloyd Neighbors, Public Affairs Officer, Bruce 
Struminger, Center for Disease Control Country Director, Jessica 
Webster, Economic Counselor, and Robert Frazier, Management Counselor 
and Acting Deputy Chief of Mission. I also appreciate the efforts of 
Nicole Johnson, Michael Orona, Tim Liston, and Matt Mathews.
   At the briefing, we discussed the need to promote education in 
Vietnam, address climate change in a global way, and deepen trust 
between the U.S. and Vietnam. Military exchanges could assist the 
latter aim. The U.S. Embassy is actively involved in locating and 
returning the remains of U.S. soldiers who were missing in action 
during the Vietnam war, as well as managing funding appropriated by 
Congress to clean up Agent Orange. The continued presence of Agent 
Orange in Vietnam continues to present grave health threats to the 
Vietnamese. The Vietnamese government requested that the U.S. focus its 
remediation efforts on Da Nang Airport. USAID has estimated that at 
least $24 million is needed to complete this remediation project. I 
have supported U.S. funding for remediation of dioxin contaminants, one 
of the harmful components of Agent Orange, including $15 million in 
fiscal year 2010 funding. The fiscal year 2010 amount was $3 million 
higher than the fiscal year 2009 amount.
   The U.S. currently contributes over $154 million a year in total aid 
to Vietnam, with $102 million allocated to the health sector--largely 
for the President's Emergency Plan For AIDS Relief, PEPFAR, and avian 
influenza. HIV/AIDS continues to pose a serious threat to the 
Vietnamese. In the 111th Congress, I voted to appropriate $48 billion 
for international HIV/AIDS, tuberculosis, and malaria programs through 
fiscal year 2013, including $30 billion for PEPFAR. In my fiscal year 
2011 appropriations request letter to the State and Foreign Operations 
Subcommittee on the Senate Appropriations Committee, I asked for $1.75 
billion for the global fund to fight AIDS, tuberculosis, and malaria 
worldwide.
   Another issue in Vietnam is the continued presence of unexploded 
ordinance. Since the end of the Vietnam war in 1974, more than 40,000 
Vietnamese have been killed from contact with unexploded ordinance and 
another 64,000 people have been injured. According to Vietnam's 
Ministry of Defense, over 16 million acres of Vietnam are still 
contaminated by 350,000 to 800,000 tons of unexploded ordinance, with 
over 3 million landmines in addition to unexploded bombs. From 2000 to 
2009, Vietnam has received more than $37 million in U.S. assistance for 
de-mining, mine risk education, survivors' assistance, and landmine 
impact studies. At the current pace of clearance, it will take 300 
years and more than $10 billion to clear Vietnam of leftover unexploded 
ordinance.
   This year, the U.S. and Vietnam celebrate the 15th anniversary of 
diplomatic relations. Fifteen years ago, bilateral trade was $451 
million annually, an amount dwarfed by the $15.4 billion traded in 
2009. The U.S. and Vietnam have come very far in overcoming historical 
animosities, exemplified through joint military exercises held on 
August 11, 2010. Vietnam currently holds the rotating Chair of ASEAN 
and the ASEAN Regional Forum, increasing its leadership role in the 
region. Since adopting a series of economic reforms in 1986, Vietnam 
has been steadily liberalizing its economy. Vietnam was admitted to the 
World Trade Organization in 2007. This economic transition has led to a 
steep decline in the poverty rate, which dropped from 58 percent of the 
population in 1993 to below 30 percent in 2003. The partnership between 
Vietnam and the U.S. continues to grow. In 2009 the U.S. imported $12.2 
billion from Vietnam and exported $3 billion.
   With regard to territorial disputes in the South China Sea, in 
recent months, China has escalated its rhetoric, harassed Vietnamese 
fishing boats, and objected to potential cooperation between Western 
energy companies and the Vietnamese government to harness resources. 
Using the guidelines for EEZs, Vietnam claims sovereignty over all of 
the Spratly and Paracel Islands. In 2002, Vietnam, along with other 
ASEAN countries, signed the Declaration on the Conduct of Parties in 
the South China Sea. The parties of this declaration agreed to settle 
the territorial disputes in the South China Sea through negotiation and 
the development of peaceful solutions rather than military force. 
Accordingly, Vietnam resolved a dispute with Cambodia over the Gulf of 
Thailand through a 2006 resource-sharing pact. In 1992, Vietnam and 
Malaysia signed a Joint Development Areas agreement. In 1997, Vietnam 
and Thailand signed an agreement delineating their respective sea 
boundaries. Despite all of these agreements, China has not been willing 
to pursue peaceful arrangements, instead relying on coercion and 
bullying. Supported by the leadership of Secretary Clinton, a coalition 
of Southeast Asian nations, at the recent ASEAN Regional Security 
Forum, publicly challenged Chinese sovereignty over many areas of the 
South China Sea, seeking a regional solution as opposed to a series of 
bilateral agreements.
   On August 11, we participated in a working lunch hosted by the 
National Assembly Foreign Affairs Committee Chairman Ngo Quan Xuan. We 
discussed the importance of the U.S.-Vietnam economic relationship, 
Agent Orange remediation, as well as the prospect of Chinese regional 
hegemony. The Chairman also mentioned that there are 13,000 Vietnamese 
students studying in the U.S.--this student exchange is particularly 
important given the need for trained doctors and lawyers in Vietnam and 
for fostering ties between the U.S. and Vietnam among the next 
generation of leaders. I explained to him how a lack of progress on 
human rights threatens progress of many areas of the U.S.-Vietnam 
relationship, including arms sales.
  The next day, we met with Duong Trung Quoc, a member of the 
Vietnamese Assembly. He is one of the few non-Communist members in the 
Assembly and shared his views on prospects for liberalizing Vietnam and 
the future of the Vietnamese political and economic systems. He is a 
historian and journalist by trade. We spoke at great length about the 
history of Vietnam and how historical interactions have shaped current 
regional tensions and security concerns.
  On Friday, August 13, we departed Hanoi for Taipei, Taiwan on China 
Airways. This was my fourth visit to Taiwan, with the most recent one 
taking place in 2001.
  After being received at the airport by officials from the Taiwanese 
Ministry of Foreign Affairs and the American Institute in Taiwan, we 
were escorted to a meeting with President Ma Ying-jeou. President Ma 
was born in Hong Kong and received his undergraduate education from the 
National Taiwan University. He then received graduate degrees from New 
York University and Harvard University. President Ma served as mayor of 
Taipei before being elected President in 2008.
  The U.S. and the Republic of China enjoy close ties. President Ma 
offered his views on North Korean aggression and China's role in the 
region. I pressed him on the steel industry, tariffs in both our 
countries, importing American beef to Taiwan, and ways of enhancing the 
bilateral economic relationship. The U.S. exported over $18.5 billion 
to Taiwan, while it imported $28.4 billion. Taiwan is currently the 
11th largest export market for U.S. goods and the U.S. is currently 
Taiwan's third largest trade partner. The

[[Page 15736]]

bilateral Trade and Investment Framework Agreement, TIFA, a process 
designed to enhance economic cooperation and resolve disputes, guides 
U.S.-Taiwan trade relations.
  We spoke about the recent Economic Cooperation Framework Agreement, 
ECFA, between Taiwan and China, signed on June 29, 2010. The EFCA was 
preceded by the first direct flight between Taipei and Shanghai, which 
departed on June 14, 2010, increasing the ease of travel between China 
and Taiwan. The ECFA will remove tariffs on 539 Taiwanese products and 
267 Chinese goods over the next 3 years. This deal permits Taiwan to 
seek free trade agreements with other nations in the region, and talks 
with Singapore are currently underway. Because Taiwan would struggle 
economically without the Chinese market, some are wary that Taiwan is 
becoming too dependent on the Chinese.
  We discussed U.S. arms sales to Taiwan. The Taiwanese Relations Act, 
TRA, of 1979 calls for the U.S. to supply Taiwan with capabilities for 
self-defense and creates unofficial representation in Taiwan through 
the American Institute in Taiwan. The TRA names U.S. policy as being 
oriented towards resisting coercion of the unofficial U.S.-Taiwan 
relations. Although the U.S. must provide for the sale of arms to 
Taiwan, the TRA does not specify the types of armaments, requiring only 
that Taiwan should be able to maintain ``sufficient'' defensive 
capabilities. Under the purview of the TRA, the U.S., on August 25, 
2008, announced its intent to sell 60 Harpoon missiles, worth 
approximately $89.8 million, to Taiwan. On October 3, 2008, the Defense 
Security Cooperation Agency notified Congress of the possible foreign 
military sale of six different types of defense articles and equipment, 
which could have totaled a maximum of approximately $6.4 billion. After 
increasingly tense relations between the U.S. and China, President 
Obama decided to defer the arms deal until 2011. Taiwan will still be 
able to purchase minor parts and upgrades.
  We discussed the Taiwanese request, submitted in November 2009, to 
upgrade F-16A/D fighters which were initially sold to Taiwan in 1992. 
The Taiwanese request noted that the upgrades would render the fleet 
parallel to the new F-16C/D fighters, reducing the need for a 
substitute fleet. American contractors have estimated that this 
retrofit would take approximately 6 years to complete.
   On August 15, we attended a working lunch hosted by Dr. Lyushun 
Shen, Deputy Minister of Foreign Affairs. The meeting was attended by 
Benny T. Hu, Chairman of CDIB BioScience Venture Management, Maj. Gen. 
Mike Tsai-Mai Tien of the Republic of China Air Force Academy, Mrs. 
Tien, Lawrence S. Liu, Senior Vice President of China Development 
Financial Holdings, Johnson S. Chiang, Section Chief of the Department 
of North American Affairs at the Ministry of Foreign Affairs, Ms. Grace 
Ya-hung Lin, Assistant to Deputy Minister Shen, Eric Madison, Deputy 
Director of the American Institute in Taiwan, Ms. Judy Kuo, Deputy 
Chief from the Economic Section at the American Institute in Taiwan, 
and Ms. Astrid Ai-yun Chen, Officer, Department of North American 
Affairs at the Ministry of Foreign Affairs.
   On Monday, August 16, we met with Wang Jin-pyng, president of the 
Legislative Yuan, before departing for Taipei International Airport. We 
flew on Eva Airlines from Taipei to Newark, NJ, for 16 hours leaving on 
August 16 and arriving on August 16 crossing the international date 
line.
   I would like to recognize Major Lance Burnett and Dan Eisenberg of 
my staff for their support of this CODEL.

                          ____________________