U.S. Navy, Defense Industry Push
Sale of Aegis Destroyers to Taiwan

The Wall Street Journal, March 21 2001

By GREG JAFFE
Staff Reporter of THE WALL STREET JOURNAL

WASHINGTON -- The U.S. Navy and the defense industry have been lobbying Congress to support the sale of Aegis radar-equipped destroyers to Taiwan, complicating what was already a perilous political decision for the Bush administration.

The push comes as the administration is set to wrap up deliberations on what types of weapons to sell Taiwan, which has requested four destroyers equipped with the sophisticated Aegis air-defense and battle-management system to counter China's growing missile threat. China has adopted a hard line opposing the sale.

But Mr. Bush's own Republican Party and some of his advisers are divided on how to deal with China, with some conservatives urging him to confront what they view as a rising Chinese threat, while others argue for a course of engagement.

"China will be able to pound Taiwan no matter what we sell the Taiwanese," said one GOP staffer. "It is in everyone's best interest to maintain an even keel and not overly mess with the status quo."

For the companies that build the destroyers, General Dynamics Corp., Falls Church, Va., and Litton Industries Inc., Los Angeles, the sale to Taiwan would provide a much-needed boost. Under the Navy's current shipbuilding plan both companies will be busy until 2005, when there is a hole in the construction schedule. From 2005 to 2007 only one destroyer will be built at the two shipyards, say industry officials.

Navy officials have said that a sale to Taiwan would drive down infrastructure costs that the Navy would otherwise have to bear to keep the yards running. With the exception of Taiwan, no foreign buyers have shown any recent interest in purchasing Aegis-class destroyers.

Navy and industry officials drew attention to the hole in the shipbuilding budget last year, but this year have stepped up their efforts, sensing an ally in the White House, say Hill staffers. At least two of the Aegis-equipped destroyers likely would be built by Ingalls Shipbuilding in Pascagoula, Miss., home state of Senate Majority Leader Trent Lott.

China opposes the sale to Taiwan because it fears the U.S. could link the ships into a regional missile-defense network. U.S. officials discount such a possibility, saying that China grossly inflates the capability of the system. They note that the U.S. is still years away from deploying a sea-based regional missile-defense system capable of defending its own troops, let alone Taiwan.

A vocal group of conservative Republicans is urging the administration to disregard China's warnings. Several GOP staffers have suggested that if the U.S. doesn't agree to sell Taiwan the Aegis combat system, conservative House members will reintroduce the Taiwan Security Enhancement Act, which calls for closer military ties between the U.S. and Taiwan. The act, certain to infuriate Beijing, passed the House last year but never made it to the floor of the Senate for a vote. "There is no plan right now to bring it up, but it is an option. It is a card that people are holding," said one GOP House staffer. "The administration needs to make a major break with the policy of the last eight years on the arms sales."

Write to Greg Jaffe at greg.jaffe@wsj.com