In this series, I have outlined a model for Taiwan’s defense industry, discussed which specific countries would buy weapons from Taiwan, and delineated what Taiwan could sell to these countries. This final article in the series addresses Taiwan’s new geopolitical considerations as it expands arms sales abroad. Becoming an exporter of military platforms is a high-stakes political decision, and Taiwan would bear some responsibility for how its weapons platforms are used by others. For these reasons, it behooves Taiwan to continue to develop and refine its arms export policy and decision-making process; below, I make several recommendations based on US arms export policy.
As Taiwan moves forward with plans to export its indigenously-produced military platforms, its policymakers and diplomats will gradually become more sophisticated in their geopolitical considerations regarding the impact of their arms sales. They will face new situations and challenges that have not arisen in the past, and will thus take on greater responsibilities as geopolitical analysts. If conventional weapons fall into the wrong hands, they can exacerbate international tensions, foster instability abroad, inflict damage, enable transnational crime, be used to violate universal human rights, and more. As Taiwan refines its own arms transfer policies, it may refer to US laws and policies, particularly the Arms Export Control Act (AECA), the International Traffic in Arms Regulations (ITAR), Conventional Arms Transfer policy (CAT) (US Presidential Policy Decision 27 of 2014), and others.
The United States’ policy guides arms sales decisions regarding the recipient country and region. The general principles for arms sales decision making include the importance of promoting regional stability and peaceful conflict resolution; preventing arms races in the region; preventing international terrorism; not causing an outbreak in conflict; determining if a sale will affect the relative military strengths of other countries in the region; determining whether the recipient country’s military is well-trained enough to effectively use the defense articles; assessing the recipient country’s capability, with regard to preventing the unauthorized transfer of technology; determining the risk of significant change in the political or security situation in a recipient country; and understanding the likelihood that recipient will use the arms to commit human rights abuses. If Taiwan exports arms to a recipient who violates any these principles, it would be wise to cease the transfer. If chances are high that exported arms will be used in a civil war, or cause an arms race overseas, then would be wise to refrain from the transfer. The consequences of starting a distant war or allowing others to misuse equipment will not be worth the profit.
There are also considerations for Taiwan as the seller. Arms sales should not negatively affect the selling country’s military stocks and preparedness, and they should be in the seller’s national interest. It is important to determine whether the sale to the recipient would impact the seller’s relations with other countries in the region. If Taiwan is planning a sale that would violate these principles, then it would be in Taiwan’s direct national interests to cease the transfer.
It is in the interests of the international community to prevent nuclear proliferation. Nuclear non-proliferation considerations include both weapons-grade nuclear materials (which Taiwan does not possess), but also aerospace items such as missiles that could be used as delivery vehicles for nuclear warheads. For instance, consider Missile Technology Control Regime restrictions on long-range missiles and space vehicles. Essentially, it would be wise to refrain from exporting long-range missiles capable of traveling over 300 km. Technology related to satellites and space launch vehicles should be more carefully protected. In addition, conventional arms transfers should not hinder negotiation of arms controls.
While Taiwan references these US law and policies, it should keep in mind that they have built-in checks and balances in the United States. Congress is legally required to provide oversight of the Executive branch. and authority for arms sales decisions is centralized in the State Department, not the Department of Defense. In addition to equipment, the decision to export defense services and technical data must also be approved under the State Department’s International Traffic in Arms Regulations (ITAR). Furthermore, the Executive branch must notify Congress before announcing a sale if the item is considered major defense equipment (MDE) and the sale is over US$14 million, or is considered regular defense articles (not MDE), but is over US$50 million, or worth over US$200 million, including design or construction services. These checks and balances ensure that arms sales decisions are the result of an all-of-government approach, rather than in the interest of one specific department within the government.
Taiwan can reference these US policies as an example of how to make arms sales decisions while trying to minimize geopolitical repercussions. If Taiwan decides to export weapons to countries that do not fit AECA, ITAR, or CAT guidelines, and the recipient country uses those weapons in aggressive or illegitimate ways, the international community may assign some level of blame, , causing Taiwan to incur reputational costs.. This type of profit will come with heavy political and moral costs.
Before deciding to become an arms exporter, Taiwan officials should carefully consider China’s views and the opinions of its neighbors, and consult with the United States as it moves forward in this direction. Cross-strait relations have a direct impact on Taiwan’s politics and future, so it is important to consider how China would react. In addition, the United States may end up helping Taiwan—like when it sent two aircraft carrier battle groups near Taiwan during the Third Taiwan Strait Crisis in 1995 and 1996 —so it is important to consult with the US government on sensitive matters such as Taiwan’s plans to export arms. Taiwan should also consider the opinions of neighbors in the region such as Japan, South Korea, and Australia, since they are in a military alliance with the United States and would possibly play a role in working with Taiwan in a military contingency.
In addition, as Taiwan moves in the direction of developing weapons for export, there is a new dilemma that will strain its relations with its closest international partners. The dilemma is whether to save money by reverse engineering advanced technology to sell overseas, or to forego that extra profit. The temptation to copy, sell and profit will be strong. It is much cheaper to copy than to invest the high research and development costs required when starting from scratch or building on one’s own proprietary technology. As this new incentive arises, and even if a government is decisive about not copying and selling another country’s defense technology, private companies could still try to do it. It will take vigilant Legislative Yuan government oversight of the Executive Yuan, oversight of other government-affiliated organizations, and keeping private companies in check to resist this pressure, since violating intellectual and property rights will ultimately lead to strained relationships with major powers that sell advanced military technology to Taiwan.
In conclusion, through this series of articles on Taiwan’s defense, I have covered the supply side (what to sell) of Taiwan’s export-oriented defense industry, demand side (who will buy), how to organize this growing industry, and new policy considerations. There is still much to consider, such as how to establish leadership at all levels to oversee defense projects, how to delegate responsibilities, ensure projects are completed on time and within budget, and the hard question of how to draw top talent from overseas back to Taiwan with constrained budgets. These answers will come through trial and error at each step of the way, and through extensive consultation with industry and policy experts in Taiwan and abroad.
The main point: As Taiwan pursues arms exports, it should continue to refine its laws and policies, so that they protect Taiwan’s interests, preserve peace for the recipient country, and encourage regional stability, using the United States’ AECA, ITAR, and CAT arms export laws and policies as points of reference.
 Arms Export Control Act, Public Law 90–629 § 36(b)(1)(D)(i) (2014).
 Arms Export Control Act, Public Law 90–629 § 36(b)(1)(D)(ii) (2014).
 Arms Export Control Act, Public Law 90–629 § 36(b)(1)(D)(iii) (2014).
 Arms Export Control Act, Public Law 90–629 § 36(b)(1)(I) (2014).
 Arms Export Control Act, Public Law 90–629 § 36(b)(1)(J) (2014).
 Arms Export Control Act, Public Law 90–629 § 36(b)(1)(F) (2014).
 Arms Export Control Act, Public Law 90–629 § 36(b)(1)(G)(ii) (2014).
 Arms Export Control Act, Public Law 90–629 § 36(b)(1)(L)(ii) (2014).
 Arms Export Control Act, Public Law 90–629 § 36(b)(1) (2014).
 Arms Export Control Act, Public Law 90–629 § 36(b)(1)(D)(iv) (2014).
 Arms Export Control Act, Public Law 90–629 § 36(b)(5)(C)(ii) (2014).
 Chi Su, Taiwan’s Relations with Mainland China: A Tail Wagging Two Dogs (New York: Routledge, 2008),14.