By Don Shapiro

In the lead-up to President Jimmy Carter’s announcement on December 15, 1978 that the United States would switch diplomatic recognition from Taipei to Beijing, only cursory discussion had taken place within the U.S. government about the nature of the future American relationship with Taiwan. The administration had held its plans close to the chest to prevent Taiwan’s friends in Congress from trying to undermine the change in policy.

As a result, even many observers who accepted the need for “normalization” of U.S. relations with China were distressed by the abruptness of the initiative and the apparent disregard for the impact on America’s longstanding friend and ally, the Republic of China on Taiwan.

“Through the American Chamber of Commerce in Taipei, resident meiguo [American] businessmen voiced surprise and disappointment at Carter’s move,” the Hong Kong-based magazine Asiaweek reported at the time. “But they also expressed faith in Taiwan’s future. Said a Chamber statement: ‘We expect U.S. investment in Taiwan and the trade between our two countries not only to continue but to increase.’”

The joint communique issued by the United States and China stated that within the context of recognizing the People’s Republic of China as the sole legitimate government of China, “the people of the United States will maintain cultural, commercial, and other unofficial relations with the people of Taiwan.” But precisely how those unofficial relations would be carried out was unclear.

Credit: Taiwan Business TOPICS AIT Director Kim Moy gives Premier William Lai (賴清德) a tour of the new facility.

In a flurry of activity over the weeks following the presidential announcement, the State Department finished drafting a proposed bill – later, in revised form, to become the Taiwan Relations Act (TRA) – to provide the legal underpinnings for the new relationship. Among the contents of the bill was authorization for establishment of a private, non-profit organization to represent American interests in Taiwan under contact from the State Department.

To underscore the “unofficiality” of the relationship, the name originally considered for the organization was simply the Institute in Taiwan, without mention of the sponsoring country. The idea was no doubt modeled on the Interchange Association that the Japanese had created after their diplomatic break with Taiwan. But the title finally adopted added the word “American” for greater clarity.

Almost immediately, two outstanding veteran U.S. diplomats who had previously served in Taiwan signed up to take leadership positions in the new organization to help ensure continued stability in U.S.-Taiwan relations. As he related in his memoir, Unofficial Diplomacy: the American Institute in Taiwan, David Dean volunteered to head AIT’s Washington office as chairman and managing director. “I had worked in Hong Kong, Taiwan, and China,” Dean wrote. “I knew many of Taiwan’s leaders, including President Chiang Ching-kuo (蔣經國), with whom I had a good personal relationship. I felt I could make a difference and that I could help advance our national interests.”

After serving as the U.S.-based chairman of AIT from 1979 to 1986, Dean later became the Director of AIT Taipei from 1987 to 1989.

The other key early appointment was that of Charles T. Cross as the first Director of AIT Taipei. Born in China to missionary parents, Cross had had a prestigious foreign-service career, most recently as the U.S. ambassador to Singapore. His book Born a Foreigner: a Memoir of an American Presence in Asia contains warm reminiscences about his first posting as a junior foreign service officer – to the U.S. Consulate-General in Taipei in 1949.

Following the “derecognition” announcement, and even before it was determined what the new American representation in Taiwan would consist of, Cross angled for another Taipei assignment. “I let it be known that I was interested in the job as head of whatever would replace the American embassy in Taipei,” he wrote. According to Dean, Cross “believed, as I did, that the United States needed to treat Taiwan with respect and dignity if our new relations with the PRC and Taiwan were to receive support from Congress and the U.S. public.”

Dean’s first task was to get AIT properly registered in Washington so it could begin operations. “I accompanied Deputy Legal Advisor Lee Marks to register the American Institute in Taiwan as a private, non-profit corporation in the District of Columbia,” Dean wrote. “Since AIT had no money, Marks told me that he borrowed the fifteen-dollar fee from Harvey Feldman, director of the Taiwan office in the State Department.”

In the absence of legal grounding and funding, that loan was just the beginning of the scrambling for resources. AIT Washington’s first location was a “small, borrowed office in the State Department, with a borrowed secretary,” Dean recalled. After the office moved to Rosslyn, Virginia, it was outfitted with borrowed furniture and equipment, a telephone account was arranged for on credit, and “every time one of the officers or secretaries had to visit the Department of State, he or she was given a list of office supplies” to “borrow” from the supply cabinet.

A period in limbo

According to the original schedule, the U.S. embassy opposite Taipei’s North Gate (the current site of the National Tax Administration) and its affiliated offices would close down as of the end of February 1979, with AIT to open its doors on March 1 in facilities that had previously served as a U.S. military headquarters. But as Asiaweek reported, Senator Ernest Hollings of South Carolina, chairman of the appropriations subcommittee on foreign operations, refused to authorize a transfer of US$2 million (now approx. US$7.2 million) in State Department funds to permit AIT to start operations. Even after a personal phone call from President Carter, Hollings insisted that funding had to wait until the TRA was enacted.

Closure of the embassy was postponed, but mid-March was set as the absolute deadline. Meanwhile, many of the local embassy employees were being pensioned off. Others from the local staff, plus some of the American officers, were notified that while they would eventually have jobs with AIT, for the time being they would need to be placed on paid administrative leave. From mid-March until the AIT’s opening on April 15, the United States was temporarily left without any functioning representation in Taiwan.

Credit: Reuters / TPG The journey to the new AIT complex, shown above, was a complicated one.

Many members of Congress were resentful that they had not been consulted prior to the decision to derecognize Taiwan. Some also harbored serious doubts about the proposed new arrangements, expressing skepticism that American interests in Taiwan could be adequately managed by a private foundation like AIT. “It may be a European or Asian way of doing things,” objected Senator Lowell Weicker of Connecticut during Senate hearings, “but it is not an American way of doing things.”

More broadly, many supporters of Taiwan in Congress, as well as in the business and academic communities, faulted the proposed TRA draft for a number of deficiencies, including failure to provide sufficient commitments to Taiwan regarding security and arms sales.

American Chamber of Commerce Taipei Chairman Robert P. Parker, an attorney with a U.S. law firm in Taipei, was among those who testified at Congressional hearings on the need to bolster those commitments in order to maintain U.S. companies’ confidence in investing in Taiwan. During that period of uncertainty, notes David Dean, U.S. representatives in Taiwan “kept in daily touch with the American Chamber of Commerce in Taipei,” which was “very active and maintained good relations with the ROC government ministries and industries involved in trade, commerce, and banking.”

A March 30, 1979 Asiaweek report noted that with the American diplomatic presence in limbo, “many American residents in Taiwan… have been taking their problems to the local American Chamber of Commerce, which has been acting as the American community’s ‘liaison office’ with the Republic of China government.” Many of those issues related to the future status and functioning of community organizations such as the Taipei American School, American Club, and English-language radio station.

Once AIT was up and running, the Institute had to abide by a number of restrictions in line with how the “unofficiality” doctrine was being interpreted at that stage. For example, U.S. foreign-service officers assigned to AIT had to resign from their government positions for the duration of their service in Taiwan. “Once their tours were over, they returned to their home agencies (but magically their time at AIT was counted as time-in-service for their government pensions),” Richard C. Bush of the Brookings Institution explained in his treatise A One-China Policy Primer.

In addition, meetings between AIT officers and their Taiwan counterparts had to take place outside of government offices. “For example, I served as chairman and managing director of AIT from 1997 to 2002 and headed its Washington office,” Bush related. “There were certain places in Washington where State Department and White House officials met with Taiwan officials. My AIT colleagues or I attended those meetings, which, so the logic went, made them unofficial.” In both Washington and Taipei, much of the interaction between officials of the two sides took place in restaurants and private homes, or on the golf course.

In more recent years, especially after the State Department conducted a Taiwan policy review in 1993, the guidelines governing such contacts became much more liberal. “AIT staff were for the first time authorized access to the Ministry of Foreign Affairs in Taipei, and any authorized visitors to Taiwan were allowed to meet with any level of the Taiwan leadership ‘necessary to achieve their objectives,’” wrote Sinologist Alan Romberg in his book Rein in at the Brink of the Precipice.

When appointed to serve at AIT, U.S. personnel no longer have to go through the charade of temporarily resigning their positions at the State Department, Commerce Department, or other government agency. If foreign-service officers at one time might have worried that service at AIT could be detrimental to their career advancement, in recent decades postings at AIT Taipei or its Kaohsiung branch have become among the most sought-after in the region due to the excellent living conditions in Taiwan and pleasant working relations with the host government.

From quite uncertain beginnings, AIT has evolved into a stable institution substantially larger than the former U.S. embassy it replaced. The upcoming move to the modern new quarters in Neihu will only enhance its capability.

Credit：楊之瑜／The News Lens Taiwan President Tsai Ing-wen (蔡英文) gives a speech at the opening of the American Institute in Taiwan as AIT Director Kin Moy (C) and Principal Deputy Director in the Overseas Buildings Operations Bureau of the US Department of State William Moser look on.

AIT Consular Services

AIT processed 34,000 visas in 2017, almost half of which were student and exchange visitor visas. Taiwan is the 7th largest source of international students in the United States, with over 21,500 students studying in the United States in the 2016-2017 academic year.

Over 460,000 Taiwan visitors travel to the United States each year. Since Taiwan joined the Visa Waiver Program (VWP) on November 1, 2012, the number of Taiwan travelers to the United States has increased by 60%. Taiwan is one of only seven VWP partners in the Asia Pacific region and one of 38 worldwide.

On the 5th Anniversary of the VWP, Taiwan became the United States’ 12th Global Entry partner worldwide and only the 3rd in East Asia, facilitated through AIT and its counterpart organization on Taiwan. At the same time, U.S. citizens became the first non-residents of Taiwan eligible to participate in Taiwan’s e-Gate program.

There are approximately 79,000 U.S. citizens on Taiwan on any given day. AIT issued nearly 10,000 U.S. passports to them last year.

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The News Lens has been authorized to repost this article. The piece was first published by Taiwan Business TOPICS. (Taiwan Business TOPICS is published monthly by the American Chamber of Commerce in Taipei.)

TNL Editor: Nick Aspinwall (@Nick1Aspinwall)

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