The American Chamber of Commerce in Taipei released its annual white paper last week. At the same time, Taiwan's Ministry of National Defence put forward a NT$610 billion (HK$142 billion) budget for weapons procurement. Even conspiracy theorists would agree that the timing of the two events are unrelated. But they do put forward an interesting case study in realpolitik. The AmCham white paper is considered something of a bible of economic reform - well, at least the US bible on economic reform. This year, the 48-page bilingual report covers all manner of issues, from intellectual property protection to telecommunications law. One issue covered was brought up again this week by Bill Weinstein, head of economics at the American Institute in Taiwan, the pseudo US embassy. It involves the Government Procurement Agreement, a World Trade Organisation-related accord, setting out standards for government purchases and contracts, which promotes fair and open tendering processes. The problem is that the US is Taiwan's main source of support for joining this accord. In Taiwan, America has a mixed reputation for fairness and equality. Meanwhile, the weapons budget will have to gain legislative approval, and getting legislators to agree on anything is notoriously difficult. The US is particularly keen to see the budget passed, as it means Taiwan could finally start purchasing weapons. Washington wants this to happen because it knows that the NT$610 will go straight to America. It is all a bit presumptive. Taiwan puts aside a big chunk of money for weapons, and the US starts salivating. Never mind fair and open tender processes. That is realpolitik. Few countries have the weapons industry of the US, and those that do rarely have the guts to sell them to Taiwan. This realpolitik is starting to cause tension in Taiwan, though, as more people begin to feel frustrated about the island's subservience to the US. Just this week, one legislator from the ruling Democratic Progressive Party said American Institute in Taiwan director Doug Paal had been sent 'to collect protection fees'. While that is an extreme view, the sentiment has been growing for the past few years. It was highlighted by Mr Paal's active lobbying for Boeing when state-owned China Airlines was tendering for aircraft and had initially awarded the contract to Airbus. Institute officials deny this, saying Mr Paal was lobbying for openness, not Boeing per se. But openness, you see, means open to the US. Even America's staunchest critics admit that Taiwan needs Washington, but that does not stop the growing desire to bite the hand that feeds.
