Summary: The testimony given concerned a GAO review of the implementation of the Taiwan Relations Act. The review focused on the operations of the American Institute in Taiwan (AIT), the status of treaties and agreements, how Taiwan's military equipment needs will be determined, and how foreign military sales to Taiwan are handled. GAO found that the Act is working. Although the form of U.S. relations with the people of Taiwan has changed, the substance has remained basically the same. After an uneasy start, including a brief interruption in some aspects of relations, the mechanism for unofficial contacts is functioning fairly smoothly. Since passage of the Act, trade and investment are up, the United States recently announced a $280 million arms sale after a 1 year moratorium, AIT has negotiated a number of agreements important to maintaining and expanding relations, and U.S. relations with the People's Republic of China (PRC) are improving. The dire predictions of U.S. abandonment of Taiwan and economic disaster have not materialized. Despite these positive signs, two congressional concerns expressed during consideration of the Act remain valid: the degree to which PRC reaction influences U.S. decisions, and the degree of executive branch consultation with the appropriate Members of Congress.
