UNITED STATES-TAIWAN RELATIONS ACT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-00003R000100050016-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 26
• Document Creation Date: December 21, 2016
• Document Release Date: October 27, 2008
• Sequence Number: 16
• Publication Date: March 3, 1979
• Content Type: REPORT

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96TH CONGRESS 1 HOUSE OF REPRESENTATIVES REPOBT
1st Se88ionMt.,.;,_ _ No 96-26
UNITED STATES-TAIWAN RELATIONS ACT,
Mr. ZABt.oc81, from the Committee on Foreign Affairs,
submitted the following
REPORT
together with
ADDITIONAL VIEWS
[To accompany H.R. 2479]
[Including cost estimate of the Congressional Budget Office]
The Committee on Foreign Affairs to whom was referred the.* bill
(H.R. 2479) to help maintain peace, security, and stability in. the
Western Pacific and to promote continued extensive,-close, and friendly
relations between the people of the United 'States and the people on
Taiwan, having considered the same, report favorably thereon without
amendment and recommend that the bill do pass.
BACKGROUND. AND COMMITTEE Ao'i oN .
,On December 15, 19,78,- President Carter announced agreement by the
United 'States and the People's Republic of China 'to recognize each
other and to establish 'diplomatic relations as of January 'I, 197.9. In a
joint communique,, the United States recognized the government of the
People's Republic of" China as "the sole legal government'of'Chma,"
but stated that "the people of the United 'States will maintain cultural,
commercial, and other unofficial relations with the people -6f Taiwan.:"
The exchange of Ambassadors and estblishment of embassies was set
'for March 1, 1979.
In furtherance-of a policy of maintaining relations with Taiwan
without official government representation and without diplomatic re-
lations, and pending enactment of legislation on the subject, the Presi=
'dent issued a Memorandum to all U.S. Government departments and
agencies. The Presidential ' Memorandum directed the departments
and agencies to continue to conduct l11'ogr ms, transactions Wand 'other
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relations with Taiwan; it stated that existing international agreements
and arrangements with Taiwan would remain in force; it ordered that
laws, regulations or orders of the United States which refer to a foreign
country, state, government or similar entity be construed to apply to
Taiwan; and it directed that U.S. interests will be represented, as ap-
propriate, by an unofficial instrumentality in corporate form. On Janu-
ary 16, 1979, an entity was incorp'orated' under the laws of the District
of Columbia to serve as this instrumentality. It was named "The Amer-
ican Institute in Taiwan."
The President subsequently, on January 26, 1979, transmitted to
Congress a draft bill -to provide for legislative implementation of the
above policy in regard to continuing relations with Taiwan. The pur-
pose of the proposed legislation was "to promote the foreign policy of
the United States through the maintenance of commercial, cultural
and other relations with the people on Taiwan on an unofficial basis,
and for other purposes." The President asked for prompt enactment
of the legislation. The bill was introduced on January 29, as H.R. 1614,
by Chairman Zablocki, by request, and referred to the Committee on
Foreign Affairs.
. The full Committee heard initial Administration testimony on
Taiwan legislation from Secretary 'of. State Vance on February 5,
On February 7 it received testimony from Warren Christopher,
Deputy Secretary of State. Deputy Secretary Christopher was ac-
companied by Herbert J. Hansell, State Department Legal Adviser,
John M. Thomas, Assistant Secretary for Administration, and
Harvey Feldman, State Department Taiwan Coordinator. On Febru-
ary 8, in morning and ~ afternoon sessions, the Committee heard
testimony from the Honorable George Hansen, Member of Congress
from Idaho, from Ambassador Leonard Unger, former Ambassador
to the Republic of China, from Ambassador David Kennedy, Chair-
man of the USA-ROC Economic Council, and from Ray S. Cline,
Executive Director, World Power ,Studies, The Center for Strategic
and International Studies, Georgetown University.
Following the hearings of the full Committee on Foreign Affairs,
the Subcommittee on Asian and Pacific Affairs held public sessions
on February 14 and 15, . at which Executive branch and public
witnesses testified. On February 14, Richard Holbrooke, Assistant
Secretary of State for East Asian and. Pacific Affairs, Michael Arma-
cost, Deputy Assistant Secretary of Defense for East Asia, Pacific and
Inter-American Affairs, and Lee Marks, State Department Deputy
Legal Adviser, appeared. On February 15, the Honorable Jim Leach,
Member of Congress from Iowa, Dr. Peng Ming-min, Director of the
Taiwanese-American Society, Winston Lord,-President of the Coun-
cil on Foreign Relations, and Ambassador Walter. P. McConaughy,
former Ambassador to the Republic of China, appeared. Additionally,
extensive material was received for the record by the. full committee
and 'the subcommittee in the course of the hearings.
During the hearings, various shortcomings in the Administration
legislation were discussed and additional and alternative provisions
were suggested. Chairman Zablocki subsequently circulated among
Commit-tee 'Members a-new draft bill which was-designed to remedy
the deficiencies and reflect views expressed by Members, while also
providing the President with the requested authority.
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On February 27, the full committee met in morning and afternoon
markup sessions, using the new. draft as its markup document. The
following day; February 28, H.R., 2479, a clean bill reflecting the Com-
mittee's action in markup, was. introduced, by Chairman Zablocki
with 28 co-sponsors. The bill was ordered reported by the Committee
on that. date, a quorum being present.
PURPOSE OF THE BILL
The purpose of H.R. 2479; the United States-Taiwan Relations Act,
is to help maintain peace, security, and stability in the Western
Pacific and to promote continued extensive, close and friendly re-
lations between the American people and the people of Taiwan.
PRINCIPLE FEATURES OF THE BILL
The bill combines in one package a declaration of principles gov-
erning U.S. policy toward Taiwan, protection of Taiwan security, and
a legislative framework for carrying forward the full range of U.S.
relationships with Taiwan in the absence of diplomatic ties. It stresses
continuity of U.S. dealings with Taiwan in the future in the same
manner as before January 1, -1979, with the exception of formal gov-
ernment=to-government relations:
Provisions and declarations in the bill include :
-Peace and stability in the Western Pacific are in the U.S. political,
security, and economic interest and must be maintained. Con-
tinued close and friendly commercial, cultural and other re-
lations with the people of Taiwan must be assured.
-Taiwan's future must be determined by peaceful means without
prejudice to the'well-being of-the people on Taiwan. Any armed
attack against Taiwan, or use of force, boycott, or embargo, would
be a threat to the peace and stability of the Western Pacific area
and of grave concern to the United States.
-The United States will make available to Taiwan defense articles
and services' for' its' defense against armed attack. If Taiwan's
security is threatened, the President shall promptly inform the
Congress of any danger to U.S. interests, and the President and
Congress shall determine appropriate action in accord with Con-
stitutional processes.
-U.S. laws and programs will continue to apply with respect to
Taiwan as if derecognition had not taken place. These include
laws relating to rights, obligations, standing to sue and be sued,
legal capacity, or eligibility for Taiwan to take part in programs
and other activities under U.S. laws.
-All treaties and international -agreements between the United
States and the Republic of China which were in force on Decem-
ber 31, 1978, will continue.in force unless terminated under their
own terms or otherwise in accordance with U.S. laws.
-All interests in property,` tangible or intangible, which the Repub-
lic of China acquired' before January 1, 1979, shall not be affected
by derecognition.
-TJ:S?: Government dealings with Taiwan. shall be conducted
thtough a nongovernmental entity which the President designates.
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U.S. laws may be applied to the designated entity by the Presi-
dent as if it were a U.S. Government agency.
-Taiwan dealings with the U.S. Government shall be conducted
through an instrumentality established by Taiwan in agreement
with the President.
-Privileges and immunities for the personnel of the Taiwan instru-
mentality in the United States and its personnel may be extended
reciprocally for such privileges and immunities provided by
Taiwan to the employees of the U.S. entity on Taiwan.
-U.S. Government personnel may be temporarily separated from
Government service to work for the U.S. entity on Taiwan, with-
out disadvantage to their government careers upon returning to
government service and without loss of benefits.
-Employees of the U.S. entity on Taiwan are authorized to perform
services for protection of U.S. citizens and businesses which would
be performed byU.S. consular officers in countries with which the
United States has diplomatic relations.
Taiwan is defined in the bill as including, as the context requires :
The islands of Taiwan and the Pescadores; the inhabitants of those
islands corporations and other entities and associations created or or-
ganized under the laws applied there; and the authorities exercising
governmental control on those islands, including their agencies and
instrumentalities.
COMMITTEE COMMENT
The establishment of full diplomatic relations between the United
States and the People's Republic of China (PRC), which has been
widely welcomed in the Congress and by the American people gen-
erally, has been accompanied by concern that this action not affect
adversely the future well-being of the people on Taiwan or the wide
range of non-diplomatic relationships between the United States and
Taiwan. Such concern was reflected by the President when, in his
December 15, 1978, announcement of the agreement with Peking, he
stated that the American people will continue to have "extensive, close,
and friendly relations" with the people of Taiwan. The intention of
the Committee in approving H.R. 2479 is to give legislative embodi-
ment to the policy of continuing and promoting the 'extensive range
of nongovernmental relations between the United States and Taiwan
within a framework of peace and stability in the Western Pacific area.
The draft legislation submitted' by the Executive branch provided
for the continuation of daily relationships between the United States
Government and Taiwan previously. handled through embassies,
through new instrumentalities. set up as private entities. The executive
branch legislation specified that, for the, United States, the entity is
to be the "American Institute in Taiwan," anon-profit corporation
incorporated under the laws of the District of Columbia. In the com-
mittee's view, the executive branch. bill, H.R. 1614, did not address
the broader concern for future peace and security of Taiwan, particu-
larly in view of the President's announcement of intent- to terminate,
as of December 31, 1979, the U.S.-ROC Mutual Defense Treaty; nor
did it give sufficient emphasis to' assuring, a strong legal foundation
for continuing, as. if derecognition. had not taken place, the broad
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scope of private commercial, cultural, and other nongovernmental ac-
tivities that constitute the great bulk of relationships between the
United States and Taiwan. Accordingly, the committee drafted and
approved a clean bill, H.R. 2479, which addresses future U.S. policy
toward Taiwan as a package : it deals with policy, with security, and
with the legal foundation for continuing business and other relation-
ships with Taiwan, as well as providing for a nongovernmental entity
to handle matters previously handled by the American Embassy in
Taipei.
SECURITY FOR TAIWAN
Since continued security for Taiwan and peace in the Western
Pacific. are in the U.S. national interest and are a necessary condition
for maintaining United States-Taiwan relationships, the Committee
gave particular attention to security provisions in the bill.
Two principles in the bill's policy declaration specifically address
the question of protection for Taiwan, The fourth principle states that
the. future-of Taiwan must be determined. through peaceful means in
a way that will not prejudice the well-being of the people on Taiwan.
The fifth principle declares that an armed attack against Taiwan or
use of force, boycott or embargo to prevent Taiwan from engaging in
foreign trade would threaten peace and stability in the region and be
of grave concern to the United States.
These principles are followed in the bill by a section for protection
of U.S.. security interests. This section stipulates that the United States
will supply Taiwan with defense articles. and services for. its defense
against armed attack. Secondly, it requires the President to inform
Congress promptly of any danger to U.S.. interests arising from threats
to Taiwan and for joint Presidential-congressional determination of
appropriate. action in response.
The security provisions are designed to. make clear, among other
things, that settlement of issues involving Taiwan by use of military
force or coercion, such. as through interference with economic relation-
ship, by boycotts, embargoes, or other means, is unacceptable to the
United States. The committee has taken into account policy statements
made, by the executive branch at the time of establishment of diplo-
matic relations with, the, People's. Republic. of China. In the President's
statement on last December 15, for example, he said "the, United States
is confident that the people of Taiwan face a peaceful and prosperous
future. The United States continues to have an interest in the peace-
ful resolution of the Taiwan issue and expects that the Taiwan issue
will be settled peacefully by the Chinese themselves." The parallel
Chinese statement of the same date did not contradict the U.S. stand
on a peaceful settlement of the Taiwan question.
The committee also notes various political and military factors that
help insure the security of Taiwan and encourage a peaceful resolution
of issues affecting Taiwan likely. Executive branch witnesses testified
that an armed attack on Taiwan is'unlikely, that militarily the PRC is
not now capable of mounting a successful invasion across the 100-mile-
wide. Taiwan Strait, and that any PRC' attempt, to mount an invasion
of Taiwan would require the PRO to weaken important defenses on its
borders with the U.S.S.R. and Vietnam. From a political standpoint,
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the administration witnesses stated that such an attack would under-
mine the PRC'smodernization effort and particularly jeopardize the
active cooperation' required of the United States, Japan and the West
in general for the modernization-to-succeed. It would also undermine
Chinese relations with many, countries in Asia-which rem ain'extremely
sensitive to Taiwan's fate. Also, in the judgment of executive branch
witnesses, a PRC blockade of trade with Taiwan would pose prohibi=
tivecosts'and,risks while offering little assurance of success.
These judgments, while not in themselvesa guarantee of security for'
Taiwan in future years, do indicate l that `inilitary action against
Taiwan is unlikely in the near term and would be readily detected by
the United States and other countries of the world ' and that appro-
priate response would be possible. In the meanwhile, the committee is
making clear in this legislation that the United States will continue to
sell arms to Taiwan for its defense. The United States currently is
preparing to deliver previously ordered defense equipment in the
pipeline valued at more than $850 million.. It is the committee's intent
that the United States will continue to make available modern weapons
for Taiwan, and not shift to a policy of supplying only obsolete weap-
ons. In fact the United States should make available those types of
conventional weapons and equipment needed for Taiwan's defense and
not upon the reaction that supplying such defense articles or defense
services might stimulate.
If, . nonetheless, an armed attack or use of force against Taiwan
were, to occur, the legislation makes clear that there should be a'prompt
response by the United States. What would be appropriate action,
including possible use of force in Taiwan's defense, would depend on
the specific circumstances. The committee does not attempt to specify
in advance what the particular circumstances or response might be;
and in any event, U.S. action is to be according to Constitutional proc-
esses. In the, committee's opinion, at the very least, the United States
should seriosly consider withdrawing recognition of the PRC.
Finally, the committee takes particular note of recent statements by
Chinese leaders, most notably by Chinese Vice Premier Teng Hsiao-
p'ing, which indicate that the PRC will accept a Taiwan. that will
maintain its present economic and social system, that 'will continue
foreign trade. and investment and people-to-people contact, and main-
tain its own armed forces. These policy statements are welcomed and
are of some consultation to the many Americans concerned about the
future security of Taiwan.
MAINTENANCE. .OF COMMERCIAL, CULTURAL, AND OTHER RELATIONS WITH
The bill is intended to assure that the many commercial, cultural,
and other relations between the United States and Taiwan continue
as they had prior to the establishment of diplomatic relations with
the People's Republic of China and that there be no hiatus 'in such
relations nor' inadequate protection given to such relations by U.S.
law. Title II of the bill contains provisions which continue the applic-
ability of U.S. law with respect to Taiwan and continue the validity
of Taiwan law with respect to the United States. Under the title, provi-
sion is also made for continuation of relations through a nongovern-
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-mental-entity., Measures' regarding/employment-;with;-the entity and
'fiir ctions-of the entity are also.stipulated..
Cbinmercial, cultural, arid. other relations with Taiwan are im-
portant?to:the people on- Taiwan and of the United. States.. Trade,
investment, and a broad range of private dealings of the.United States
and Taiwan should not be jeopardized by the action of establishing
formal diplomatic relations with ..the People's Republic of China.
Diverse American relationships with Taiwan,,such as those formalized
?in approximately 55 international agreements, should .not. be broken.
In conclusion, the committee emphasizes that the intention of this
legislation is to: demonstrate -its concern for the welfare and security
of--the-people-on--Taiwan; and.to.provide a:necessary legal framework
which_,will?permit the continuation and-expansion of the many com-
-in6rcial arid' other:nongovernmental:actiwities which are the backbone
of United States-Taiwan relations.. .
SECTION-BY-SECTION ANALYSIS-
Section 1-Short title
This section cites the Act as, the "United States-Taiwan Relations
Act."
Section c-Declaration of principles''governing United States policy
with regard to Taiwan
This section states that the following principles ,shall govern U.S.
policy with regard to Taiwan :
First, the United States desires to preserve and promote friendly
relations with the people on--Taiwan, as, well as the people on the
?China'mainland, and all -other peoples.of the. Western Pacific area'.
Second, peace and stability in.the Western Pacific are in the U.S.
political, security and economic interest, are of international concern,
and must be maintained.
Third, continued. extensive; close, and friendly commercial, cultural,
and other relations between the American people and the people on
Taiwan must be assured.
Fourth, the future of Taiwan must be determined,through peace-
ful means without prejudice to the well-being of the people on. Taiwan.
Fifth, any armed. attack against. Taiwan, or use of force; boycott,
or embargo to prevent Taiwan from trading with other nations, would
-be a threat to the peace and stability of the area and of grave concern
to the United States.
TITLE I-PROMOTION OF. SECURITY IN THE WESTERN PACIFIC : PROTECTION
OF UNITED STATES SECURITY INTERESTS
Section 101(a) .-This section states that the United States will; make
available to Taiwan defense articles and services -for ? its defense
against armed attack. The provision would continue U.S. arms supply
policy which was in effect under the Mutual Defense- Treaty with- the
Republic of China prior to the President's notification of intent to
terminate the treaty. ., .
Section 101-(b).-This section requires that the President. promptly
inform Congress of any dangers to U.S. interests arising from any
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threat to the security of Taiwan. Where possible,, the President should
inform Congress of anticipated dangers. and should not await their
actual occurrence. Information relevant to this, section would include
information about development of military capability that, might
threaten Taiwan, deployment. of armed forces in positions that could
threaten Taiwan and any perceived intentions to undermine continued
peace and prosperity on Taiwan. Such information would also in-
clude information about. actions or anticipated action of an economic
-nature, such as boycott, or embargo, which also would be a threat to
Taiwan.
This section also specifies that in the event such information is
received, the President and Congress shall determine an appropriate
response in accordance with Constitutional processes., This. section is
not intended to, supersede other statutory requirements. In particular,
all of the provisions of the War . Powers Resolution, including, its
provisions regarding consultation and reporting, remain fully appli-
cable with respect to Taiwan.
,TITLE II-MAINTENANCE OF COMMERCIAL AND OTHER RELATIONS
Title II is designed to provide legislative implementation for the
purpose, as stated in the title. of the bill, of promoting. continued exten-
sive, close, and friendly relations between the people of the United
States and the people on Taiwan. Paragraphs (1), (2), and' (3).,. of
the Declaration of Principles in section. 2', are particularly applicable
to! this title.
Seetion 201-Application of United States laws to Taiwan.
This section deals with U.S. domestic law as it, affects or relates'to
Taiwan. It is designed to,continue.the application of all U.S. laws, both
Federal and State, with respect to Taiwan, as if derecognition had not
occurred. In other words, derecognition is to be legally irrelevant in
deciding issues involving Taiwan under U.S. law. In particular, this
section preserves, the rights, and obligations of Taiwan under U.S.
law.
Section 201(a) provides that no U.S. legal requirement, explicit or
implicit, concerning existence of diplomatic relations or governmental
recognition shallapply with respect to Taiwan. This provision makes
clear that any legal' requirements for maintenance of diplomatic rela-
tions with the United States or for recognition of a foreign govern-
ment-by the United States shall not apply to, or be. a bar to, Taiwan
participation in activities of any kind under United States law, includ-
ing government programs. For example, provisions of laws such as
section 620(t) of the Foreign Assistance Act of 1961 (22 U.S.C.
2370(t) ), which prohibits U.S. assistance to any country with which
U.S. diplomatic relations have been severed, will not apply to Taiwan.
The provision is, also. intended to make inapplicable the requirements
for diplomatic relations with, or recognition by, the United States
which might be. implied by terms such as- "friendly country" contained
in various statutes. One such provision of particular importance is
section 4A of the Export Administration Act of 1969.which prohibits
U.S. persons from complying with a foreign boycott directed against
a friendly country. The bill will ensure that those prohibitions would
apply with respect to any boycott against Taiwan.
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Section '201('b) ?(1) provides that the absence of diplomatic rela-
tiousand recognition'shall not. affect the application of U.S. laws with
respect to'Taiwan, and the laws of the United'States shall apply with
respect to Taiwan in the manner that the laws of the United States
applied with respect to Taiwan prior to January 1, 1979. This section
continues the'application of U.S. laws to Taiwan after January 1, 1979,
the date of derecognition, inthe mannerthat U.S. laws applied prior
to that date. This section expressly provides that among the laws
which shall continue to apply ,are those relating to rights, obligations,
standing to sue and be 'sued, legal capacity, or eligibility to take part
in U.S. Government programs and other activities. Accordingly, the
legal rights and obligations of the Republic of China remain valid
under i .S. law and are unaffected by derecognition. The rights and
obligations of corporations and other entities established under the
laws. of Taiwan are similarly protected. Legal rights assured by this
section 'include both contract rights and property rights. They include
rights involving bank'assets and other intangible assets. Obligations.
which will -remain 'binding under this section include the obligations ?of
the Republic of 'China with respect to loans and guarantees, 'oblig a-
tions that will continue unaffected by derecognition. Regarding rights
and, obligations, the bill is applicable both to those which existed prior
to January 1, 1979,.the'date of derecoaiiition of the Republic of China
by the President, and the rights anc obligations which, might arise
subsequent to that date.
Tn providing that the U.S. laws will continue to apply with respect
to Taiwan without regard to the presence of diplomatic relations or
recognition, this section will also insure that the Republic of China
will continue to have standing to sue and 'be shed. in U.S. Federal and
State courts as before. Similarly, the ability to sue and be sued of
corporations and other entities established under the laws of Taiwan
remains unchanged. The laws of 'Taiwan will have the same validity
under U.S. laws as before. For example, marriages performed under
Taiwan law will continue to be recognized as valid in the United
States. Likewise, a business contract entered into under Taiwan law
will continue to be dealt with under U.S. law as before. Judgments
rendered by the counts of Taiwan will continue to be enforceable in
U.S. courts.
Furthermore, derecognition will not affect the applicability, to
Taiwan of U.S. laws referring to foreign countries, governments,,
states, nations, and similar entities. Similarly; restrictions applicable
to communist countries will not apply to Taiwan. Thus Taiwan will
continue to be eligible under such U.S. laws as the Arms Export. Con-
trol Act,,'the Atomic Energy Act of 19.54, the Export-ImportB ank
Act, the Foreign Assistance Act of 1961, (including its provisions
authorizing overseas private investment insurance)., the Mutual Edu
cational and Cultural Exchange Act of 1961, and the trade laws of the
United States (including nondiscriminatory trade treatment (most-'
favored-nation status) and the generalized system of preferences
(GSP) ). Exports from Taiwan to the United States will not be com-
bined with those from the People's Republic of 'China in determining
GSP or orderly marketing agreement limits.
Because Taiwan continues to be treated as a foreign country, taxes
imposed by Taiwan will be treated as taxes imposed by a foreign
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country. Thus, Taiwan real property taxes would generally be deduct.
ible (Section 164 of the Internal Revenue Code) and income taxes.
would-be deductible or creditable (Section 33 of the Internal Revenue
Code) for Federal income tax purposes if the other requirements of
the Internal Revenue Code are met.
Moreover, any U.S. source income of the governing authority or,
Taiwan would be exempt from Federal income taxation to the same
extent as the income of a foreign government (Section 89.2 of the
Internal Revenue Code). (The. exemption from tax. for foreign, gov-;
ernments would, not apply to the people governed,by. that gayernmg,
authority.) Similarly, employees of the governing. authority.;on Tai-
wan could qualify-for exemption. from Federal income taxation under.
the same rules which apply to. employees of a foreign government;
(Section 893).
Because section 205 (2) of the bill provides that the term "Taiwan,".
when used in a geographical sense,. includes the islands of Taiwan and
the Pescadores, that definition will apply under the provisions of the
internal revenue laws of the United States which refer to foreign coun-,
tries in a geographic sense. Thus, for example, residence or presence in
Taiwan would be treated as residence or presence in a "foreign coun-.
try" to determine eligibility for the deduction for excess foreign living.
costs (Section 913 of the Internal Revenue Code).
This section of the bill does not "freeze" the application of U.S. law
with respect to Taiwan. It affects application of future laws as well
as existing laws. Likewise, this section does not affect the future resolu-
tion of; legal issues 'based on changed circumstances; it simply makes
the fact of Aerecognition irrelevant,to the resolution of those issues.
For example, under this section .the Nuclear Regulatory Commission
will-be able to make the required findings and determinations under the
Atomic Energy Act of 1954 in order to permit continued nuclear ex-
ports to Taiwan, and derecognition will not constitute a basis for not
making those findings and determinations. At the same time, nothing in
this bill will prevent the Commission from taking into account sub-
sequent changes in circumstances in its application of the statutory
criteria in particular cases.
Section 201 (b) (2) creates a specific exception to continue unchanged
application of U.S. laws with respect to Taiwan. This exception is
made for the first sentence of section 202(b) of the Immigration and
Nationality Act of June 27, 1952. The exception makes it possible for
Taiwan to be granted a U.S. immigration quota of 20,000 annually,
rather than sharing such a quota with the People's Republic of China
as has been the case in the past.
Section 201('b) (3) provides that pursuant to section 201(-b) (1)
above, dealing with the continued unchanged application of U.S. laws
with respect to Taiwan, all interests in real or intangible property ac-
quired by the Republic of China prior to January 1, 1979, shall not be,
affected by U.S. recognition 'of the People's Republic of China. Claims
of the People's Republic of China will not affect property rights or
assets of the Republic of China in the United 'States. This section
applies to real- property used for diplomatic purposes as well as all
other property owned by the Republic of China before derecognition.
Section 201(c) is designed to make clear that all treaties and other
greements between the United States and the Republic
international 'agreements-
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of China; which wem in force before derecognition will continue to be
in force. For gxample, the U.S.-ROC Treaty of Friendship, Commerce
and Navigation, which provides a legal.foundation for commercial re-
lations.between, the United States and Taiwan, will continue without
interruption. No United States-Republic of China treaty or interna-
tional agreement would be terminated' except that which is terminated
under its terms or otherwise, pursuant to U.S. law.
The President has given notice of termination of the United States-
Republic of China Mutual Defense Treaty under terms of the treaty.
However, this provision is not intended to deal with that issue. It is
intended to confirm as a matter of U.S. law the President's statement
of December 30, 1978, that all other treaties and agreements then in
force.shall continue in force.
Section 202-Maintenance of relations
This section provides the modalities under which dealings between
the United States Government and the authorities on Taiwan shall be
conducted. Nothing in this bill requires that dealings by private parties
be conducted through the entities described below.
Section 202 (a) (1) provides that U.S. Government dealings with
Taiwan shall be by or through a nongovernmental entity to be desig-
nated by the President after consultation with Taiwan. The Executive
branch has indicated its intention to use, for this purpose the "Amen-
can Institute in Taiwan," a nonprofit corporation incorporated -under
the laws of the District of Columbia. The committee would have pre-
ferred an entity with a name such as a "Commission," because of the
Committee's desire to continue United States-Taiwan relations on as
close to a government-to-government basis as possible. The language
of this section, by not naming the designated entity, leaves flexibility
for the choice of an entity other than, or with a name other than,
"American Institute in Taiwan."
Section 202 (a) (2) provides that Taiwan dealings with the'United
States shall be by or through a similar instrumentality established by
Taiwan in agreement with the President for dealings with the United
States. The Taiwan entity must hold whatever authority is necessary
under Taiwan laws to act on Taiwan's behalf. It must be able to provide
assurances as may be required of foreign governments by such U.S.
laws as the statute governing exports of nuclear materials. In general,
stipulations in U.S. laws for dealing with a "foreign government" will
be satisfied, with respect to Taiwan, by dealing with this instrumen-
tality. The authorities on Taiwan have established a Coordination
Committee for North American Affairs as a nongovernmental entity to
act on Taiwan's behalf in this regard.
Under the exception clause prefacing section 202(a), the President
is given broad power to provide for dealings between the United States
Government and the authorities on Taiwan without use of the desig=
nated entities. Thus he is not precluded by this bill from dealing on a
government-to=government basis generally, or in specific instances, if
he so chooses. Also, the provision for existence of the two entities is not
intended as a requirement that they be the exclusive channel for deal-
ings between the' U.S. Government and private persons on Taiwan.
For example, the U.S. Export-Import Bank will be able to continue
activities on Taiwan, as it has in the past, without going through either
of the new entities.
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Under this legislation, existing provisions of law concerning report-
ing to Congress and Congressional review in relation to international
agreements and other transactions continue to apply to agreements and
transactions made by or on behalf of the United States Government in
relation to Taiwan. For example, agreements entered into by the desig-
nated entity with the Taiwan instrumentality will be subject to the
reporting requirements of the Case-Zablocki Act (1 U.S.C. 112b) and
other applicable, congressional review provisions, such as section 123
of the Atomic Energy Act. Statutory procedures applicable to other
types of transactions such as various provisions of the Nuclear Non-
Proliferation Act of 1978 and the Arms Export Control Act, continue
to apply.
Section 202 (b) is intended to provide the U.S. designated entity with
.all attributes necessary to function in the absence of a diplomatic mis-
:sion in Taipei. Under Section 202(b) (1) U.S. laws applying to U.S.
`Government agencies shall apply to the designated entity, to the extent
the President may specify, as if it were an agency of the U.S. Gov-
'ernment. For example, under this provision the designated entity may
be audited by the General Accounting Office and would not be subject
to antitrust action.
Also, the designated entity, its property, and its income could be ex-
-empted from all taxation imposed by the United States or by any
State or local taxing authority of the United States. The only excep-
tion to this rule would befor Social Security taxes of certain employees
of the designated entity, as discussed below. In addition, contributions
to or for the use of the designated entity could qualify (within the
limits otherwise applicable) as deductions for Federal income, estate,
and gift tax purposes.
If the designated entity is treated as a Federal agency for social
security purposes, the designated entity and its employees generally
will not be subject to social security (FICA) taxes and service for
the designated entity generally will not earn its employees quarters of
coverage toward qualification for social security benefits. However,
under section 203 (a) (3) of the bill, employees of the designated en-
tity who have been separated from Federal service are entitled to con-
tinue to participate in any benefit program in which they were covered
prior to employment by the designated entity. This includes the So-
cial Security program. Thus, in the event that an employee of the
designated entity was covered by Social Security in his Federal em-
ployment immediately prior to separation, he will continue while em-
ployed by the designated entity. In that situation, both the designated
entity and the employee will be subject, to FICA taxes on wages paid
by the designated entity, and his service for the designated entity will
be covered employment under title II of the Social Security Act. Treat-
ment of the designated entity as a Federal agency would not prevent
its former employees from using their service for the designated en-
tity toward qualification for coverage under State unemployment
compensation programs. This coverage would be pursuant to the right
of employees of the designated entity separated from Federal service
to continue to participate in two benefit programs, Unemployment
Compensation for Federal Civilian Employees and Unemployment
Compensation for Ex-Servicemen. The designated entity would not
be subject to taxation under the Federal Unemployment Tax Act
(FUTA).
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Under Section 202(b) (2) any U.S. Government agency may sell,
loan, or lease property to and perform support functions and serv-
ices for the designated entity as the President may direct. Reimburse-
ments to the agencies under this subsection shall be credited to the
current applicable appropriation of the agency concerned.
Under Section 202(b) (3) any U.S. Government agency may acquire
and accept services from the designated entity on such terms and con-
ditions as the President directs, notwithstanding laws and regulations
normally applicable to federal procurement.
Section 202(c) authorizes the granting of privileges and'immuni-'
ties for the Taiwan instrumentality, including both property and per-
sonnel, to the extent needed for it to carry out its functions in the
United States. The granting of such privileges and immunities is con-
ditioned on comparable privileges and immunities being accorded by
Taiwan to the U.S. designated entity and its personnel. It is the Com-
mittee's expectation that the President will accord extensive priv-
ileges and immunities to the Taiwan instrumentality on a reciprocal
basis,: including secure pouch comnnuiications, inviolability of 'prem-
ises, exemption from property and income taxes, exemption from
foreign agent registration requirements, and immunity of personnel
with respect to the performance of their functions.
Section 203-Separation of Government personnel for employment
with the designated entity
Section 203(a) (1) provides that a federal officer or employee who.
accepts employment with the Institute may be separated from his-or-
her agency.
Section 203 (a) (2) provides that any officer or employee so sep-.
arated is entitled, upon termination of employment with the desig-
nated entity, to be reemployed or reinstated in the Federal service..
Normally, reemployment for an employee in the classified service will
be to the position from which the employee was separated. However;.
the President is authorized to determine the appropriateness of the
position for reemployment. It is anticipated that, especially in per-
sonnel systems based on the rank in person concept, reemployment
could be in a higher class.
Section 203(a) (3) provides for continuity-of federal benefits during
service with the designated entity, including compensation .for job-
related death, illness, or injury; health and life insurance, leave, and
retirement., Contributions, where required, must be paid in order to
preserve these benefits. This section also provides that death or re-
tirement by a federal employee separated under. subsection. (a) while
employed by the designated entity shall be considered a death in or
retirement from the Federal service for purposes of benefit entitlement..
The provision for continuation of eligibility to participate in Fed-
eral benefit programs is intended to permit the affected individuals to,
retain the opportunities they would have as Federal employees to elect
changes in those benefits, as in the case of "open season" for changes.
in health insurance coverage.
Section 203 (a) (4) authorizes the extension of the benefits of, this
section of the bill to Federal employees serving with the designated?
entity on leave without pay prior to the bill's enactment.
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Section. 203 (b) . authorizes the transfer to the designated entity of
alien employees of the U.S. Government, and preserves their benefits
under the local compensation plan applicable; in Taiwan under sec-
tion 444 of the Foreign Service Act of 1946 (22 U.S.C. 889). It is ex-
pected that the designated entity will adopt this 'plan for its alien
employees. This section also authorizes the continued participation in
U.S. Government retirement systems by those transferred alien em-
ployees who have heretofore been covered by such systems, subject to
continued payment of contributions and deductions to the appropriate
fund.-
. Section 203 (c) stipulates that employees of the designated entity
shall not be U.S. Government employees and, in representing the des-
ignated entity. shall be exempt from section 207 of title 18, United
States Code, which otherwise would prohibit employees. of the entity
from dealing with their former agencies, in representing the entity.
Section 203(d) provides that the salaries and allowances paid to
employees of the designated entity are to be treated the same way for
tax purposes under the Internal Revenue Code of 1954 as salaries and
equivalent allowances paid by, agencies of the U.S. Government. Thus,
employees of the designated entity will be exempt from tax on over-
seas allowances and benefits they receive which, are equivalent to the
tax-exempt overseas allowances and benefits received by civilian officers
and employees of the U.S. Government (under section 912 of the
Internal Revenue Code). As ' a corollary, compensation paid to em-
ployees by the designated entity will not be "earned income" qualify-
ing them for the deduction or exclusion provided to individuals
working in the private' sector (under sections 911; and 913 of the
Internal Revenue Code).
The 'Committee on Post Office and Civil 'Service has advised the
Foreign Affairs Committee that, from the standpoint of its. jurisdic-
tion over the Civil Service, it has no objection to consideration of this
section of H.R. 2479. The exchange of letters between Chairman Za-
blocki and Chairman Hanley follows :
MARCH 1, 1979.
Hon. JAMES M. HANLEY,
Chairman, Post O Bice and ,Civil Service Committee,
Room 309, Cannon Building, Washington, D.C.
DEAR MR. , CHAIRMAN : I am writing with reference to H.R. 2479,
the United States-Taiwan Relations Act, which was ordered favorably
reported by the Committee on Foreign Affairs on February 28, 1979.
In. order to maintain relations with Taiwan to the maximum extent
possible on a nongovernmental basis in view of the President's action
in shifting U.S. governmental recognition to Peking, the bill author-
izes the creation of a nongovernmental entity to conduct dealings of
the United States Government with Taiwan. Section 203 of the bill
provides authority for the President to separate from the Government
any officer or employee'who accepts employment with the new entity
without advantage or disadvantage to such officer or, employee's rights,
privileges, and benefits as a government, employee. ' Section 203 will
affect, for the most-part, Foreign Service officers and.employees. The
bill does not create a new class of Federal employees nor does it change
in any way the rights, privileges, and benefits now available to such
employees.
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Since Section 203 of the bill does deal with Federal employee mat-
ters, the Committee on Post Office and Civil Service could request se-
quential referral of the bill. However, in order to facilitate action on
this important legislation which is urmeiitly required to insure uninter-
rupted relations between the United gtates and, Taiwan, I respectfully
request that your Committee forgo formal consideration of this meas-
ure. If you agree to this request, I would be happy to include in our
,Committee's report on the bill or in the record of debate on the House
Floor a letter from you stating that your Committee is agreeable to the
consideration of the bill as reported by the Committee on Foreign Af-
fairs without prejudice to your Committee's jurisdiction with respect
to Federal employees.
Thank you for your consideration.
With warm personal regards, I am
CLEMENT J. ZABLOCKI, Chairman.
U.S. HOUSE OF REPRESENTATIVES,
COMMITTEE ON POST OFFICE AND CIVIL SERVICE,
Washington, D.C., March 2,1979.
Hon. CLEMENT. J. ZABLOCKI,
Chairman, Committee on Foreign ,4 f f airs,
U.S. House of Representatives, Washington, D.C.
DEAR CLEM : Thank you for your letter of March 1, 1979, concerning
certain provisions of H.R. 2479 ("United States-Taiwan Relations
Act") which pertain to matters within the jurisdiction of this
'Committee.
Under section 203 of the bill, any employee of a Federal agency may
be separated from Government service for a specified period for the
purpose of accepting employment with the nongovernmental entity
established under the bill to conduct dealings of the United States
Government with Taiwan. An employee who is so separated is entitled
to be reemployed by his former agency in an appropriate position
without loss of rights or benefits. While employed with the new entity,
the employee may continue to participate in any employee benefit
program, such as retirement, life insurance and health insurance pro-
grams, but only to the extent that the appropriate employee and em-
ployer contributions to the programs are made.
As you pointed out in your letter, our Committee could request the
Speaker to sequentially refer H.R. 2479 to this Committee for the pur-
pose of considering those provisions which pertain to matters under
our jurisdiction. However, I understand that expeditious consideration
of this legislation is necessary to ensure uninterrupted relations be-
tween the United States and Taiwan and that consideration of the
measure by the House has ? been scheduled for next week. In view of
these facts, our Committee will interpose no objection to consideration
of H.R. 2479, provided that such action is not construed as relinquish-
ment of jurisdiction over the employees to whom section 203 of, the
bill applies.
I would appreciate the inclusion of this letter in your Committee's
Sincerely yours,
report on H.R. 2479.
With kind regards.
Sincerely,
JAMES M. HANLEY, Chairman.
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.8ection.204-Service8to United States Citizens in Taiwan
'This, section authorizes, employees. of the designated entity to per-
form'services; for' American citizens and businesses on Taiwan. of a
nature normally performed' by U.S. consular officials. It is intended
to. permit such, services; to- U.S. citizens and businesses to. be performed
as if a U.S. consulate were in Taiwan.
Section 204 (a) (1) authorizes. any employee of the designated entity
,to administer or take oaths; affirmations, affidavits, or depositions, and
to perform, any act a notary public may perform in the United States.
Section 204(a) (2) authorizes such employees to act as provisional
conservator.- of- the personal, estates- of deceased U.S. citizens. Section
204 (a) (3) authorizes them to perform other functions which are per-
formed by U.S. copsular officers. These,include a wide range of func-
tions such as authenticating foreign documents and assisting American
vessels and seamen.
Section'204(b); provides that acts performed by employees of the
designated entity under this section shall be valid under U.S. law.
Section 205-Definitions
"Laws of the United States" are defined as including any statute,
rule, regulation, ordinance, order, or common law rule of the United
States Government or of any of, its political subdivisions including
State, county and city governments.
"Taiwan" is defined as including, as'the context. may require, the
island's of'Taiwan and the Pescadores, the inhabitants of.those islands,
corporations and other.entities and associations created or organized
under the laws applied on those islands, and the' authorities exercising
governmental control on those islands (including agencies-and instru-
mentalities thereof.).
The above definitions are illustrative, not limiting. The terms "laws
of the United. States" and "Taiwan" are to be construed expansively to
carry out the purposes of this act. Thus, for example, the term
"Taiwan" may in some contexts appropriately encompass the islands
of Quemoy and Matsu, as well as other islands governed by authorities
exercising government control on Taiwan.
Section 206-Implementing. regulations'
This section authorizes the President to issue regulations necessary
to implement this act.
Section 207-Effective date
This section makes, this Act effective starting January. 1, 1979, thus
assuring that there will be continuity of United States-Taiwan rela-
tions on all matters covered by the act.
COST ESTIMATE
_
H.R. 479 does not authorize the appropriation of any funds. There-
fore', enactment of the legislation will have no cost impact, as indicated
in the, fetter from the Congressional Budget Office below.
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INFLATIONARY IMPACT STATEMENT
The enactment of H.R. 2479 will have no inflationary impact.
STATEMENTS REQUIRED BY. CLAUSE 2 (1) (3) OF .HOUSE RULE XI
(A) OVERSIGHT FINDINGS AND RECOMMENDATIONS
As indicated earlier in this report, the Committee on Foreign Af-
fairs conducted extensive hearings on the issues involved in the formu-
lation of H.R. 2479. Based on those hearings and other. relevant
oversight activities, the committee recommends the passage of H.R.
2479.
(B) BUDGET AUTHORITY
H.R. 2479 does not create any new budget authority.
(C) COMMITTEE ON GOVERNMENT OPERATIONS' SUMMARY
No oversight findings and recommendations which relate to this
measure have been received from the Committee on Government
Operations under clause 4(c) (2) of rule X of the rules of the House.
(D) CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
The committee has received the following letter from the. Congres-
sional Budget Office :
? MARCH 2,1979.
Hon. CLEMENT J. ZABL'OCKI,
Chairman, Committee on Foreign Affairs,
House of Representatives,
Washington, D.C.
DEAR MR. CHAIRMAN :' Pursuant to section 403 of the Congressional
Budget Act of 1974, the Congressional Budget Office has reviewed
H.R. 2479, the United. States-Taiwan Relations Act, as ordered re-
ported on February 28, 1979. This bill is designed to help maintain
peace, security, and stability in the Western Pacific and to promote
cQntjnued extensive, close, and friendly relations between the people
of the United States and the people on Taiwan. This bill is estimated
to have no cost impact.
Sincerely,
ALICE M. RIvLIN, Director.
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ADDITIONAL VIEWS OF THE HONORABLE WILLIAM
S. BROOMFIELD
I would like to commend my good friend, the distinguished Chair-
man of the Committee on Foreign Affairs, Clement J. Zablocki, for
his leadership, in developing H.R. 2479. This bill reflects the deep
concern for the security needs and economic freedom of the people on
Taiwan, as well as the national security interests of the United States
in the Western Pacific. Under his leadership, the legislation drafted
by the Committee remedies many of the deficiencies of the Adminis-
tration's original.legislative request.
In particular, H.R. 2479 strengthens the Administration's legisla-
tion in relation to the legislative provisions concerning threats to the
security of Taiwan. In this regard, I personally offered an amend-
ment, which received broad bipartisan support, stating that beyond
an armed attack, any economic boycott or embargo to prevent Taiwan
from engaging in trade with other nations would also be a threat to the
security of Taiwan. Other distinguished Members of our Committee
were constructive in strengthening the Administration's legislation
by providing language to better protect America's commercial inter-
ests on Taiwan as well as the embassy property of the Republic of
China.
I have never questioned the right of the Administration to normalize
relations with the People's Republic of China. What I do question,
however, is the Administration's specific arrangements-or lack there-
of-in normalizing relations including the lack of consultation with
the Congress and with our ally, Taiwan. Moreover, the Administration
not only failed to consult the Congress in relation to the specific nor-
malization arrangement but also in relation to proposed changes
affecting the continuation of the Mutual Defense Treaty with Taiwan,
a consultative procedure called for by Section 26(b) of the P.L.
95-384, the International Security Assistance Act of 1978.
I am also deeply concerned about the kinds of signals which the
Administration has been sending to our friends and allies abroad. In
particular, the Administration, which has always made human rights
the keystone of its foreign policy, has abandoned the diplomatic recog-
nition of more than 17 million people and formally recognized an
oppressive Communist dictatorship. Moreover, because of the way in
which the Administration treated an ally I am very much concerned
over the reactions of other countries-small and large-with whom we
have mutual security interests. In particular, I am deeply disturbed
over recent events in Southeast Asia which could complicate the Ad-
ministration's announcement that the United States will make no new
arms sales agreements in 1979 with Taiwan, an ally which has been
totally dependent on the United States for its defense equipment.
In conclusion, I believe that the Committee on Foreign Affairs-and
its staff-have developed a bill which is a significant improvement
over the Administration's request. In light of these legislative im-
provements, I urge my colleagues to favorably consider H.R. 2479.
WM. BROOMFIELD.
(18)
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ADDITIONAL VIEWS ON H.R. 2479.
The Administration has played its China Card but without the
positive effects it hoped for either at home or abroad. The Adminis-
tration seems to have under-estimated the lack of enthusiam-indeed
resentment-in the Congress and the country at large for its treatment
of the Republic of China. Teng Hsiao-ping's deftly managed trip to
the United States cleverly drew the Administration, albeit unwill-
innly, into China's dispute with the USSR. Also in allowing itself
tote associated with Teng's calls for united action against "hegemon-
ism," the Administration seems to have forgotten that only a short
time ago the People's Republic of China (PRC) was condemning !both
the USSR and the 'U.' for the same offense. The constitution of the
PRC approved unanimously on August 18, 1977, only a year and a half
ago, stresses China's opposition to "the hegemonism of the two super-
powers, the Soviet Union and the United States, to overthrow impe-
rialism, modern revisionism and all reaction." (The constitution also
calls for the "liberation" of Taiwan.)
This bill reflects the strong sentiment in the Congress that the Presi-
dent should have consulted with the Congress, in compliance with the
law, before taking such a controversial foreign policy step as he has.
? It also demonstrates the strong desire to undo as much of the Admin-
istration's -damage as possible in this legislative vehicle. It goes a long
way to improve a poor situation.
We understand that recognition doesn't mean approval of a par-
ticular form of government. But what troubles us, in addition to its
lack of caution, is the Administration's excessive pretense that nor-
malization is 'anything more than it actually is. Despite all' the hoopla
and claims to the contrary, normalization of relations with the PRC
is not the greatest event since Georgia statehood.
Given the circumstances with which .the Administration has pre-
sented us, we cannot be certain that even the efforts of this bill suffi-
ciently protects Taiwan from attempts by the PRC to strangle her
economically. There have already been reports that American firms
have been told by Peking that they must stop trading with Taiwan to
be able to trade with the Mainland. We must resolve here to act to
thwart 'Chinese Communist trade, embargoes and secondary boycotts
against Taiwan. We must uphold our laws and take the timely and
effective action required to protect Taiwan's flourishing economy.
To abandon a free society of more than 17 million persons to one of
the most oppressive dictatorships of all time, would be a human rights
disaster. The People's Republic of China has one of the worst human
rights records in history and if, as the President has said, "human
rights is the soul of our foreign policy," not much could be said for our
national soul, if we were to let that happen. No one says the Adminis-
tration seeks that end, only that it has been careless in its machinations
and hasty in implementing its ill-conceived decisions.
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We strongly believe that the flow of material in the defense pipeline
to Taiwan should not be interrupted. Our supply of weapons to Tai-
wan should be based on the latter's own assessment of its defensive
needs and should not be influenced by negative Administration atti-
tudes reflecting PRC views.
There are many unanswered questions about the way our new ar-
rangement with Taiwan will be handled. Since the Republic of China
does not exist anymore in the new Carter Administration and Taiwan
is only a province of the PRC we will not be dealing directly with a
government but through unofficial institutions with-as the Adminis=
tration insists-"the people on Taiwan." To use the administration's'
pet term "the reality of the situation is that there are two Chinese
states.
Administration witnesses before the Foreign Affairs Committee
stressed the absolute need that our future representation in Taipei be
unofficial in nature. They said the American Foreign Service personnel;,
temporarily on duty as non-official diplomats in Taiwan, would not be
representing the United States government in their dealings with the
"people on Taiwan," as they are pleased, to put it. Does this mean that
our unofficial officials will accost individuals on the streets and by-ways,
of Taiwan asking to be of service to. them ? It will be interesting to
watch their progress. A commercial non-officer, for example, (or per_
hags a non-commercial officer) will leave the American unofficial insti-
tute established by our government for these non-governmental 'con-
nections. He will approach the first person he sees to discuss a purchase
by Taiwan of American electrical machinery, let's say, "I would like
to talk about the deal," the local will say, "but I'm not sure you exist."
Through the Looking Glass provides the most apt model for this Ad-
ministration, dream.
This bill, fortunately, preserves for the Republic of China its em-
bassy property of Twin Oaks in Washington. Largely symbolic, this
provision is, nonetheless, important. Congressman Lagomarsino's
amendment, adopted in the full Committee, provides that in this case
the property of the Republic of China-including its real property=
its embassy, remains in its possession.
There remains a nagging suspicion that there are still secret agree-
ments in this. affair since details of both the Panama Canal treaty and
the Camp David accords somehow failed to surface immediately. In
those cases too the Administration claimed that everything had been
made public only to provide some errant detail later. In the case of
US/PRC normalization, only sometime after the President's announce-
ment did an important aspect of the agreement work its way to the
surface. We had forgotten to mention, it seems, that we had agreed
with the PRC not to allow any Free China purchases of arms during
the remaining years of our Mutual Defense' treaty. 'Were there any
other lapses of memory?
There will be further perfecting amendments to this bill offered on
the Floor.
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EDWARD J. DERWINS%I.
ROBERT J. LAGOMARSINO.
Gus PATRON.
TENNYSON GIIYER.
BILL GOODLING.
LARRY WINN, Jr.
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ADDITIONAL VIEWS OF THE HONORABLE ROBERT J.
LAGOMARSINO ON H.R. 2479
The new China policy of the United States, which was proudly pro-
claimed by President Carter on December 15,1978, clearly has a serious
effect upon the parties which were directly affected by the recognition
of the People's Republic of China (PRC), and upon the United States
foreign policy toward the .rest of the world. The Administration's leg-
islative, proposal (H.R. 1614) concerning this development reflected
the naivete of this Administration's view of Congress and the world.
The new legislation (toward which these comments are specifically
directed) is still an inadequate statement of proper American policy,
but it is certainly a substantial improvement over the initial executive
proposal.
Although Congress is constitutionally prohibited from determining
which countries this nation recognizes, it clearly possesses a number of
ways in which it can offer its suggestions and directives to the executive
branch: One of those areas which is of great concern to me and to many
of the Taiwanese who are directly affected by the President's action,
concerns the disposition of the Taiwanese Embassy in Washington,
D.C. Because of the. concerns that the Embassy not be permitted-as
the Carter Administration has advocated-to be relinquished to the
People's Republic of China, I offered an amendment permitting the
Taiwanese government to maintain its interest in that Embassy. Two
reasons, discussed below, prompted me to. introduce the amendment
which was inserted in the legislation reported to the House.
My. first concern was that in allowing the Taiwanese to maintain
ownership. of their Embassy, Congress can demonstrate that Taiwan
still has allies in the United States, despite President Carter's dis-
courteous behavior toward the Taiwanese diplomats. The affirmation
of the Taiwanese ownership of the Twin Oaks Embassy is a clear
congressional signal to Taiwan, and other U.S. allies, that the United
States is still extremely interested in the safety and.protection of
Taiwan.
A second reason to maintain Taiwanese interest in the Washington,
D.C. Embassy involves the actual occupation of the building by the
new PRC officials. By disallowing the Carter/PRC intention to occupy
the former Taiwanese premises, Congress is underscoring its under-
standing that there is absolutely no continuity between the policies of
Taiwan and those of, the PRC. Essentially, it is an affirmation that the
occupation should not be regarded as a continuation of relations, as
some might conclude when observing the,PRC in the old Taiwanese
offices.
Another amendment which I introduced relates to the possibility of
an eventual embargo and/or attack on Taiwan by the PRC. Although
administration officials have insisted that these "unlikely" events
should not concern Congress, the recent PRC invasion of Vietnam
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raises serious questions about this possibility. Although the Commit-
tee rejected this amendment, I support it for two important reasons
which I still believe are pertinent to our new relationship with the
PRC.
The first concerns the emphasis upon the fact that U.S. recognition
of the PRC should not be construed as an irreversible process. By in-
dicating to the PRC that such hostile action would, at the very least,
mandate that the President consider "derecognition," it would prop-
erly demonstrate the- legitimate U.S. concern about the attitude toward
reunification.' of the PRC. It would effectively serve to remind the PRC,'
that;the.U.S. is extremely interested in reminding the PRC'that such.
actions would have a serious impact upon our relations with them and
with Taiwan.
The United States has withdrawn recognition from various nations
in the past to demonstrate our disapproval of certain action ; in light,
of the new southeast Asian. hostilities the proposed language .would
be particularly applicable.
A second concern which I have relates to comments made by some
of my colleagues that "derecognition" would be the minimum in the
list of U.S. responses to hostile ,PRC actions. Although I share the
hope that the, U.S..react with a positive response in the event that Tai-
wan were invaded by the PRC, the experience -of watching the reaction
of this administration to a number of foreign policy developments
does not suggest that we would have the hoped-for result. .
The amendment certainly. would. not limit the options. available to?
the U.S. response in this scenario. It is simply another indication of
the concern for the safety and protection of Taiwan.
I would like to join with several of. my colleagues who have ex-
pressed their opposition to the manner in which the recognition process
was managed by the President. Carter's failure to consult with Coro-.
gress again demonstrates the view which the Executive branch has of
Congress. It is no wonder that the President continues this policy in
light of the feeble response of many Members to pass legislation to
demonstrate the outrage over the presidential attitude toward Congress.
Another. concern which I have involves President Carter's referral
to both Presidents Nixon and Ford in his December 15 statement of
recognition. Although the President was attempting to demonstrate,
that he was continuing a process which these two Republican Presi-
dents had initiated, he neglected to mention that both Nixon and Ford
were extremely concerned that the interests of Taiwan be protected.
Either of those Presidents could have obtained recognition on the terms
Carter has, but did not because of the paramount concern for Taiwan's
safety. All of their efforts in Taiwan's behalf, however, have been lost.
by a President who did not even ask for a "no force" agreement on
Taiwan.
Finally, I would like to directly address the issue concerning the
military defense of Taiwan. The defense' of that island and the others
which are part of the Republic of China is primarily dependent, upon.
deterrence, which in the past has been directly attributable-to United
States interests in. that part of the world. Without our specific inter-,
ests, the effect of deterrence is lost, and increases the likelihood of for-
eign pressures on Taiwan. For this reason, I supported the Quayle
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23
amendment in the Committee hearings which would have inserted lan-
guage in the bill which spoke to the United States "security interests,"
in Taiwan.
Few would dispute the fact that the U.S. commitment to Taiwan has
been the cornerstone of that country's defense for the past thirty years.
Congress can contribute to this defense of Taiwan, and of the other
friendly Asian regimes, if it inserts language in the legislation which
more properly reflects our interest in the safety and autonomy of those
countries.
ROBERT J. LAGOMARSINO.
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ADDITIONAL VIEWS OF REPRESENTATIVE DAN
QUAYLE, INDIANA,, ON H.R. 2479, DEALING WITH THE
MAINTENANCE OF U.S. COMMERCIAL,' CULTURAL,
AND OTHER RELATIONS WITH TAIWAN
For the past 30 years the United States has recognized and main-
tained full diplomatic relations with a government on Taiwan and
its 17 million citizens. Suddenly, and with little notice, a. decision was
made by the President of the, United States in concert with the gov-
'erument of the People's Republic of China that a government does not
exist .on Taiwan. This is not a realistic approach for a responsible
American foreign policy, and, in fact, smacks of hypocrisy.
We have had a liaison office for nearly seven years with. the People's
Republic of China, and we. maintained full diplomatic relations with
Taiwan. Since our government now has established. full diplomatic
relations with the PRO, it is only common sense that, we reverse the
situation and have at least a liaison office with Taiwan. A liaison office
is less than full diplomatic recognition.
Regretfully the committee. bill 'remains silent on this vital point
regarding our, continued relations with our friends in Taiwan: While
the bill is improved over the Administration draft proposal, I am op-
posed to the retreat: to unofficial, nongovernmental relations with Tai-
wan. We. should recognize'the realities of the situation.
First, we can not.'justify nonrecognition of Taiwan anymore than
we could the nonrecognition of the PRC. Both are functioning and
viable governments with whom the United Staten wishes to carry on
important trade and cultural relations. We do not. have the right to
cede, Taiwan to, the PRC', but do have a responsibility to maintain
strong relations' with Taiwan along with the normalization of relations
with the PRC.
Secondly, we will be engaging in a game of political charades in
the very nature of the proposed nongovernmental instrumentality,
.which was labelled by the Administration as an. Institute. Its func-
tions will be those of a liaison office-the primary difference' being its
lack of official status. In fact, it will be staffed by State Department
personnel who will be "temporarily separated" for the, purpose of
maintaining this charade.
I do not believe the U.S. Government, whose current international
status is, shaky at best, should be openly playing such games. The
entity will function as a liaison office and should bear its just title and
recognition.
If the Administration refuses-to: deal honestly with the government
of Taiwan, then-the Congress must. There are strong arguments for
the maintenance of government-to-government relations with Taiwan
in the form., of a liaison office.
?? 1. Taiwan has. a viable,government which has been in power for
over 30 years. It has jurisdiction over 17 million people. The country
is economically viable and ranks in the top ten of our trading partners.
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W
We recognize the need to continue our trade with Taiwan, to guaran-
tee the security of the people and the islands, to continue in force all
other treaties with Taiwan, and yet this legislation attempts to put in
question the legitimacy of Taiwan and its governing authority.
2. There is no, reason why the establishment of a liaison office. in Tai-
wan,, with. a corresponding Taiwanese office in Washington, should
undermine our relations with the People's Republic of China. We were
able to' conduct a. similar relationship with the PRC for nearly 7 years
withoutterminating our relationship with Taiwan.
3. For the United States to remove the security umbrella provided
by. our formal: relationships and Mutual Security Treaty; we. are,. in
.effect, cutting Taiwan diplomatically ' adrift.. Once allied, to and
recognized by the strongest . economic and military power on earth,
Taiwan will now become a political outcast. This separation from the
political mainstream of the rest of the world can hardly be reassuring
to other nations planning investments or other forms of long-term
dealings with Taiwan.
4. In the absence of some form of official relations between Taiwan
and the United States it will prove difficult for the U.S. to legally
come to Taiwan's aid in the event of an attack or blockade by the
PRC. Having recognized Peking as the sole legitimate Chinese' Gov-
ernment. U.S..aid to Taiwan in those circumstances would amount
to interference in China's internal affairs, ' Taiwan being no more
(by our admission) than a 'rebellious Chinese province. Should the
United States decide to limit its 'ties to Taiwan to a corporate frame-
work, the 'resulting political isolation of Taiwan will constitute a
standing invitation to eventual mainland aggression.
The establishment of a liaison office in Taiwan need not, and should
not, undermine the normalization process. President Carter could ad-
vise Vice Premier Tenng that Congress- wholeheartedly endorses nor-
malization and that trade agreements and other necessary negotiations
will be dealt with expeditiously.' However, the. Legislative Branch,
-which is elected by the people of the United States and is a partner
in the implementation of foreign policy, does not endorse, and can
not accept, the nonrecognition of Taiwan. We, therefore, insist on the
maintenance of government-to-government relations with Taiwan as
one of the U.S. conditions for normalization.
It can be made clear that, we do not seek `full diplomatic standing
for Taiwan-but feel that it is entitled- under American standards to
a similar relationship of liaison status which was enjoyed previously
by the PRC.
While the President has stated that he would veto any legislation
which would differ with'his secretly-concluded agreements with the
People's Republic of China. the Congress surely has a responsibility
to place its imprint on any foreign agreements reached- by the Execu-
tive Branch.
Mr. Carter;'on December 1:5,1978; played what was described as his
"China card;" without promised consultation with the Congress. The
general consensus in both the House and the Senate is that the Presi-
dent's proposed legislation and the terms of his agreement with the
PRC are inadequate to protect U:S'. interests in Taiwan and to honor
'our' long-standing commitment to Taiwan.
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It is now time for Congress to play the American card and assure
,government-to-government relations with Taiwan as we move into a
new period of relations with the People's Republic of China.
In recent years, we have heard much about the need for "honesty
in government." America's credibility and standing in the world now,
.depend on its "honesty in foreign policy."
DAN QUAYLE.
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