Monday, July 23, 2012

US-Taiwan ties strained despite deal on F-16 upgrade - Wendell Minnick

Wendell Minnick
Taiwan and the US Air Force closed a US$ 3.7bn deal on upgrading the island's F-16 fleet after two years of negotiations. But the deal did not really improve the US-Taiwan relationship, writes Wendell Minnick in Defense News.

Wendell Minnick:
Under the deal inked July 13 in Washington, the U.S. Air Force will pick the upgrade package Taiwan will have to live with — and pay for — and will exacerbate the country’s fighter shortfall for a dozen years starting in 2016 as Block 20 A/B aircraft are pulled from frontline duty for modernization. The first upgraded jets will be delivered starting in 2021. 
BAE Systems, Lockheed Martin, Raytheon and Northrop Grumman are competing for segments of the upgrade program, with the winner to be picked by the Air Force. Lockheed has emerged as the frontrunner, however, after striking an exclusive deal with Taiwan’s leading aerospace contractor, Aerospace Industrial Development Corp. (AIDC).
Taiwan has left too much of the upcoming decision in US hands, critics say:
[T]he letter of offer and acceptance (LOA) doesn’t allow Taiwan to recoup the non-recurring engineering (NRE) costs of the installation of the new radar to replace the mechanically scanned APG-66 system... “I can’t believe the Taiwanese are allowing the U.S. Air Force to make the decision for them,” said one U.S. defense executive involved in the competition, expressing a widespread Taiwanese viewpoint.
More about the concerns about this deal on the Taiwanese side in Defense News. 

Wendell Minnick is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.
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