When Washington suddenly “derecognized” Taiwan three decades ago, the Chamber stepped forward to look after the interests of the U.S. community in Taiwan.

By Marinus van Gessel and Robert P. Parker

When President Jimmy Carter announced, 30 years ago this past December, the end of formal U.S. diplomatic relations with the Republic of China on Taiwan, the American Chamber of Commerce in Taipei was thrust into a crisis that virtually everyone had seen coming – but that no one was fully prepared for.

In the 1972 Shanghai Communique, the United States and China had put the world on notice of their mutual goal to normalize diplomatic relations. The Communique reflected China's view that America’s relationship with Taiwan was the principal “obstruction” to that goal. At the time, Marinus “Dutch” van Gessel was Deputy Assistant Secretary of the U.S. Commerce Department in Washington, where he often encountered the U.S. State Department's view of Taiwan as a “problem” to be surmounted.  

By 1976, van Gessel was in Taipei, heading the Taiwan operations of Corning Glass and serving as AmCham’s Chairman (the position was then called President). Under his leadership, AmCham made a strategic decision not to oppose the improvement of U.S. relations with mainland China, as long as it was not at the expense of Taiwan. That stance was more than simply resigning ourselves to the inevitable, because the head offices of practically all of AmCham’s American members had by then awakened to commercial reasons for supporting improved relations with China. The practicality of AmCham’s position ultimately strengthened our credibility in Washington, of course, when “derecognition” actually happened.

As AmCham Chairman, van Gessel also testified before the U.S. Congress in 1977, published a  position paper, and organized a vigorous letter-writing campaign to establish the other pillar of AmCham’s basic position – that the U.S. commitment to Taiwan’s security was a fundamentally important business issue, not only a military and diplomatic one. This position was highly unpopular with the U.S. State Department, which was intent on not letting Taiwan get in the way of recognizing the P.R.C.

When the phone call informing him of the “derecognition” decision came from Washington, the American ambassador in Taipei was dancing at AmCham’s Christmas Ball. It was well into the evening of December 15, 1978. Just a few minutes earlier, the ambassador, Leonard Unger, had raised his champagne glass to toast the prospect of working with AmCham’s newly-elected officers. We were never to have the pleasure.

After a tense 45 minutes on the telephone with the State Department that evening, Unger returned briefly to the Ball.  He excused himself to guests at the head table, and then, unnoticed by most others in the ballroom, departed immediately with his wife. A few hours later, the ambassador woke up President Chiang Ching-kuo to break the news of what was about to happen.

Like most other Americans in Taiwan, we heard President Carter’s announcement the next morning over Armed Forces Radio Taiwan (AFNT), the U.S. military’s radio station broadcasting from Yangmingshan. So secretive had been the Carter Administration’s execution of our country’s first-ever break in diplomatic relations with a friendly country – only five people in the entire government were fully aware of the plan – that the announcement caught virtually everyone off guard.

Within an hour of President Carter’s announcement, all three Taiwan television networks had crews in Rob Parker’s office, clamoring for a statement. Though Parker would not formally take office as head of AmCham for two more weeks, he had become the organization’s spokesperson in his capacity as Chairman-elect – and began formulating AmCham’s response – when outgoing Chamber Chairman James Smith announced: “My boss told me to stay out of this!” In those first TV interviews, Parker repeated AmCham’s position that we didn’t object to U.S. recognition of the PRC, as such, but took strong exception to the terms and to how our friends in Taiwan had been treated

Regular television and radio programming was suspended throughout Taiwan that weekend, as President Carter’s grinning announcement, President Chiang’s dignified response, the ROC national anthem, and Parker’s statement on behalf of AmCham were played over and over. The hurt and indignation felt toward the U.S. government by Taiwan and its people were palpable. By Monday morning, Taipei was a rife with banners denouncing the break in relations. “Carter Sells Peanuts, Also Friends,” read one memorable sign on ZhongShan North Road. 

We Americans in Taiwan were anything but sure that we had not been cast adrift by our own government, along with our Taiwan friends. New developments were happening at a fast clip, rumors abounded, and communicating with AmCham members wasn’t easy.  The U.S. military radio station was off limits to the Chamber, and in any event it carried no local Taiwan news. Email was years in the future, and even fax machines weren’t yet available. Thus, we called frequent meetings of the Board of Governors and Supervisors, often on short notice, and van Gessel and Parker met together on a daily basis to coordinate AmCham’s efforts. Parker wrote a series of letter reports to the membership, updating them by mail once or twice a week.

Despite their bitterness toward the Carter Administration, people throughout Taiwan seemed eager to view AmCham as symbolic proof that America’s longstanding affection for Taiwan was alive and well. Thanks to the power of television, they knew where AmCham stood. Americans were frequently stopped on the street in those days by local people they didn’t know, who wanted to exchange assurances that we would always be friends.

Testimony to Congress

Both the U.S. Senate and House of Representatives invited AmCham to testify on the so-called “Omnibus Legislation” drafted by the State Department and proposed by the Carter Administration to provide a basis for unofficial relations with “the people on Taiwan.” When Parker testified in Washington on AmCham’s behalf in February 1979, he began by reiterating AmCham’s position on improving U.S. relations with the PRC.  He pointed out, however, that the Carter Administration had unfortunately chosen to “normalize” relations with mainland China on terms sharply prejudicial to Taiwan.  Parker told Congress that the Administration’s proposed legislation for continuing relations was “vague in expression, naïve in approach, and wholly inadequate to the needs of American companies doing business in or with Taiwan.”

Parker made a series of specific proposals on what Washington should do to rectify those problems, starting with a strong U.S. commitment to Taiwan’s security. Fortunately, Congress was in a mood to listen. Taiwan had many friends on Capitol Hill, and the Senate had recently passed a resolution calling on the President to make no change in the U.S.-R.O.C. Mutual Defense Treaty without consulting them first. No such consultation occurred, of course, and members of both houses of Congress were angry. They were ready to enact a strong reaffirmation of U.S. friendship with Taiwan, if shown the way. AmCham was more than willing to oblige.

At the hearings in Washington, Congress heard a wide range of testimony from academic experts on China, strategic thinkers, Administration advocates, and other witnesses. The USA-ROC Economic Council (now the U.S.-Taiwan Business Council) participated in the hearings, and made suggestions on maintaining the R.O.C. embassy in Washington and how to establish the American Institute in Taiwan. AmCham emphasized the importance of maintaining a U.S. commitment to Taiwan’s security, describing physical security as essential to a broad range of practical needs of American business in Taiwan, and we followed up with a list of specific recommendations.

Parker also told Congress, “As strongly as we may feel about the impact of ‘normalization’ on Taiwan and its people, it is not our purpose to argue on their behalf.”  AmCham, he emphasized, is an organization dedicated to American economic interests in Taiwan. AmCham’s purpose in testifying, he stated, was to point out how those interests had been jeopardized by “normalization” and to offer specific proposals for correcting the failure (1) to provide adequately for the security of Taiwan and (2) to offer a clear and sufficient legal framework to continue the normal functioning of trade and investment.

“Business thrives on certainty,” Parker testified, “and no element of certainty is more essential than a reasonable assurance of physical security.” On behalf of AmCham, he then called on the Congress to enact legislation which would include (1) a strong American commitment to Taiwan’s security, (2) an assurance of Taiwan’s ability to obtain from the U.S. the defensive arms it needs, and (3) a provision that China would lose everything it wants from the United States if force is used against Taiwan.

AmCham’s specific recommendations for legislation also included the following:

• Existing treaties and agreements between the United States and Taiwan would remain in effect.
• Agreements between the United States and Taiwan would have the force of law.
• Taiwan would have capacity to enter into contracts and sue in the United States.
• U.S. courts would recognize and enforce laws and judgments of the R.O.C.

“The prompt enactment of legislation reflecting such terms would not only be in the interest of American business,” Parker testified, but “necessary to meet our country’s moral responsibilities to Taiwan and its people.”

The full testimony before the Senate Foreign Relations Committee was broadcast live in the United States over PBS and rebroadcast in Taiwan over all three local TV networks.  Thus, thanks again to the power of television, practically everyone in Taiwan knew the stand taken by AmCham. When the final version of the Taiwan Relations Act was adopted, they recognized that virtually all of  AmCham’s principal recommendations had been written into the law.

During this time, the American business community in Taiwan also developed a close, new working relationship with Taiwan’s government. The U.S. Embassy was gone, and the American Institute in Taiwan (AIT) hadn’t yet been created. AmCham stepped forward as the new leader of the American community. We submitted four requests to Premier Y.S. Sun: (1) a new campus for Taipei American School, on land being vacated by the U.S. military, (2) a youth activities program for foreign children, (3) a new home for the American Club, at the U.S. military’s former non-commissioned officers club, and (4) permission to operate ICRT, an English-language radio network to replace the departing U.S. military station. Within two weeks, Premier Sun approved them all.

ICRT was a fitting symbol of continuity in U.S.-Taiwan relations, because the race to establish ICRT took place within the same hectic four months – mid-December to mid-April – as the shaping of the Taiwan Relations Act (TRA). Without missing a beat, when the U.S. military radio station signed off the air for the last time, ICRT immediately began broadcasting.

When AIT was established under the TRA, a new chapter in “unofficial” diplomatic relations began. Fortunately, the State Department sent one of its ablest diplomats, former U.S. Ambassador to Singapore Charles T. Cross, to Taipei as the first Director of AIT. Meeting frequently with AmCham’s officers, often informally at his home, “Chuck” Cross set the standard for excellent cooperation that has characterized AIT’s relationship with AmCham ever since.

“Success has many fathers,” it has been said, and the TRA is a good example. AmCham didn’t do it alone. Nevertheless, AmCham’s role in helping to shape the TRA marked a turning point in perceptions of AmCham in both Taipei and Washington, and AmCham has continued to build successfully on that in the years that have followed.

— Dutch van Gessel was Chairman of AmCham in 1976 and 1977. Rob Parker held that position in 1979 and 1980.