Wooing Washington With Nuclear PowerAmy Borrus and Margaret Dawson
After Typhoon Tim slammed into Taiwan in early July, power blackouts pitched homes into darkness for days. For Taiwan's 21 million residents, power outages had already become far too common. State-run Taiwan Power Co. has frequently imposed brownouts this summer, citing a shortage of juice.
But the outages have a bright side. They're helping the government reach two of its top goals: build a fourth nuclear plant to solve the power problem, and improve relations with the U.S. On July 13, Taiwan's legislature approved plans for a $6.4 billion nuclear power plant. Moreover, as President Clinton reviews his Taiwan policy, Taipei has hinted that it will award the plant contract to a U.S. company in return for diplomatic concessions.
WINDFALL. That has pulses racing at Westinghouse Electric Corp. and Swedish conglomerate ABB Asea Brown Bo-
veri (Holding) Ltd.'s U.S. nuclear-systems unit. The two American companies are bidding for prime contracts worth $2 billion. For Westinghouse, which is teamed with Britain's Nuclear Electric PLC, the contract is expected to generate revenues of more than $1 billion--roughly equal to the nuclear division's annual sales.
The potential jobs bonanza hasn't been lost on Clintonites. They are considering easing restrictions imposed on Taiwan since 1979, when the U.S. cut ties and recognized Beijing. The proposals, which await Clinton's approval, allow Cabinet officials to visit Taiwan, Taiwanese officials to meet mfficially with State Dept. and White House counterparts, and Taiwan to change the name of its U.S. office, Coordination Council for North American Affairs, to something more identifiable. The U.S. may also back Taiwan's push for entry into international economic organizations.
Such modest steps have sparked predictable protests from China. But many China experts, who doubt that Beijing would lash out at the U.S., say the measures are long overdue. In stark contrast with China, Taiwan has made steady progress toward democracy.
Moreover, Taiwan has become too important an economic player to treat as an outcast. Now the U.S.'s sixth-largest trading partner, Taiwan is spending lavishly on telecommunications, transportation, and other infrastructure projects that could be a bonanza for U.S. companies.
But the U.S. is behind the curve in courting the Taiwanese. A stream of top European officials has trooped through Taipei over the past two years. The lame-duck Bush Administration sent U.S. Trade Representative Carla A. Hills in December, 1992, but so far, Clinton has sent no top officials. U.S. companies are lobbying hard for a Cabinet-level visit. "It takes more than good products to get the contract," says Lynn Murray Sien, executive director of the American Chamber of Commerce in Taipei. "It all comes down to who's willing to give Taiwan the greatest diplomatic face."
HOT HOUSE. Capitol Hill is turning up the heat, too. Lawmakers were galvanized by the handling of Taiwanese President Lee Teng-hui's request in May to stop in Hawaii en route to Central America. The U.S. permitted him to refuel but didn't allow Lee off the plane. In a letter to Clinton, 54 senators called for a new policy. "When are we going to treat Taiwan in a reasonable manner?" fumes Senator Frank Murkowski (R-Alaska), sponsor of an amendment endorsing more U.S. arms sales to Taiwan.
If Clinton approves the policy shift, White House officials say, Commerce Secretary Ronald H. Brown may be the first to visit, during a planned Asian trip in August.
However, even with high-level backing, the nuclear contract isn't a sure thing for Westinghouse or ABB. The proj-ect, which has been harshly criticized by Taiwan's main opposition parties,
was mothballed for 10 years before the government revived it. Activists say tiny Taiwan, which has three nuclear facilities already, can't safely handle a new one--and they vow to block the project. They're also lacing their protests with anti-U.S. gibes. "The worst of American culture is being dumped on Taiwan," lamented one protester at a recent demonstration in front of Taiwan's legislature.
Analysts say the political wrangling will leave contractors little room for profit. That led General Electric Co. to drop out of the bidding last year, says a GE official in Taipei. For now, though, Taiwan's government is undaunted. It's betting that it has found a solution to electrical brownouts at home and diplomatic blackout abroad.