Parts 1 and 2 of this series showed that new submarines play an important role in Taiwan’s defense, and a cost-benefit analysis of the island’s indigenous submarine program showed that its plan would be better served by importing certain high tech components for submarines rather than completing the project entirely on its own. The final segment in this series explores the question: Which countries have both the technological capability and political will to manufacture and export high tech submarine components to Taiwan?
In terms of technical capability, the United States, South Korea, the United Kingdom, and Japan are the key players in the global submarine industry, and thus meet this requirement. Major corporations involved in submarine defense products include: General Dynamics Electric Boat and Huntington Ingalls Industries in the United States; BAE Systems in the United Kingdom; Daewoo Shipbuilding and Marine Engineering in South Korea; and Kawasaki Heavy Industries in Japan.Other prominent defense vendors are Lockheed Martin in the United States, Mitsubishi Heavy Industries in Japan, Fincantieri in Italy, Saab in Sweden, and Thales in France. However, this is a generalization, since assembly lines and supply chains for multinational defense companies can span many countries.
A major consideration for Taiwan in selecting an arms sales partner is interoperability in a conflict scenario. Taiwan would be interested in ensuring its weapons and communications systems are compatible with “NATO plus four” countries, which include the United States, NATO’s European members, and the “plus four” countries, South Korea, Japan, Australia and New Zealand. These NATO plus four countries have military communications systems that are compatible with one another, and they are also the most likely to both help Taiwan and to work with Taiwan’s military during a conflict, so interoperability with these partners is especially important.
The “NATO plus four” criteria keeps virtually all of the above listed countries in the running, with few exceptions. One exception might be Saab in Sweden, since it is not technically part of NATO; however, it participates in the Partnership Interoperability Initiative with NATO and reports that its systems are interoperable. Japan is also a question mark, since it has historically restrained itself from exporting arms and military technology through its Three Principles on Arms Exports and Article 9 of its constitution. However, in 2014, the Japanese government replaced its Three Principles on Arms Exports with the revised Three Principles on Transfer of Defense Equipment and Technology, in order to allow arms sales under certain conditions. Nevertheless, the future of Japan’s arms exports and prospects for assisting Taiwan’s submarine program are still unclear, since Japan’s policy changes are so new. There are also heightened political sensitivities involved in working with Japan on a military program because of historical and regional dynamics.
Then, there is the second question of which countries are willing to work with Taiwan to build its submarines, considering the possibility that submarine deals may become public. Cooperating with Taiwan requires the fortitude to endure China’s efforts to officially demarche government officials, cut off diplomatic exchanges, and even retaliate against private companies. In 2010, in response to a $6.4 billion arms sale from the United States to Taiwan, China threatened sanctions on US companies like Boeing, which were selling weapons to Taiwan. In 2011, when the US approved a $5.3 billion foreign military sales case, in order to upgrade Taiwan’s F-16 aircraft, then Chinese Vice Foreign Minister Zhang Zhijun (張志軍) warned: “The wrongdoing by the US side will inevitably undermine bilateral relations as well as exchanges and cooperation in military and security areas.” It is indeed hard to bear the political and economic costs of crossing China.
In terms of willingness to publicly work with Taiwan, in this current geopolitical context, only the United States has the stomach to face China’s tough response to a public sale. Each year, as China’s clout grows, it becomes harder for many countries to sell arms to Taiwan. There is already evidence that Taiwan’s submarine planners have been reaching out to European countries for cooperation on submarine design over the past few years. However, the title of an article in The Diplomat says it all: “How Europe Shies from Taiwan: Europe accounts for a fraction of Taiwan’s defense import needs. Expect things to stay that way.” China continues to raise the political and economic cost for other actors to do anything that it views with displeasure or a threat to its interests.
Taiwan’s best hope of gaining submarine components from the United States and other NATO plus four countries is by doing it discreetly. Cooperation is much more likely on a private and secret level. However, it is hard to be discreet when it comes to importing entire submarines, since the dollar values are so high—in the hundreds of millions, or even billions of dollars per submarine—though discretion is possible with smaller and relatively less expensive submarine components. A dollar value is considered “small” in the arms sales industry when individual items are priced just up to the millions of dollars. Still, the United States and other NATO plus four allies would have to make some tough choices through the deliberative process within their executive branches to approve even a quiet arms sale to Taiwan.
Through the United States, the two main channels for arms sales are Foreign Military Sales (FMS) at the Department of Defense and Direct Commercial Sales (DCS) at the State Department. Taiwan could choose either as a way to gain submarine components. The benefit of taking the FMS approach is that the United States government guides every step of the way, and uses the same acquisition process—operational expertise, procurement infrastructure, purchasing practices—for Taiwan as it would if the United States military was the customer. The difference with the DCS channel is that Taiwan works directly with the American defense company. However, Taiwan officials would have to discuss details with their US defense counterparts since some cutting edge technologies are considered FMS-only. The US government wants to stay intimately involved through FMS when technology is sensitive and cutting edge, so DCS might not be an option for some items.
In sum, as Taiwan takes its first steps in developing indigenous submarines, it will grapple with the question of what technologies to develop on its own and when to look to the United States and other NATO plus four countries for collaboration. As mentioned in previous articles, Taiwan’s domestic industry can already produce the submarine’s hull, steel shell, propeller, hydraulic system for periscope control, and other components. For cutting edge technology Taiwan would benefit from working with others that have more R&D experience and production volume. On the other hand, it isup to the United States and other countries to determine if they have the political will to publicly approve arms sales to Taiwan. If not, then they can still collaborate in a more discreet manner through smaller quantities and lower dollar values.
Main point: Though a dozen major defense companies in the United States, Europe and Asia have experience in manufacturing submarines and components, few will be willing to work with Taiwan publicly, so Taiwan’s best bet is to cooperate quietly with its international partners.