- By Joshua Keating
Joshua Keating was an associate editor at Foreign Policy
The New York Times has a very strange op-ed today from Paul V. Kane, a former international security fellow at the Harvard Kennedy School. The piece makes the case that the U.S. should trade Taiwan to China for a deal on debt. Here’s the argument:
There are dozens of initiatives President Obama could undertake to strengthen our economic security. Here is one: He should enter into closed-door negotiations with Chinese leaders to write off the $1.14 trillion of American debt currently held by China in exchange for a deal to end American military assistance and arms sales to Taiwan and terminate the current United States-Taiwan defense arrangement by 2015.
This would be a most precious prize to the cautious men in Beijing, one they would give dearly to achieve. After all, our relationship with Taiwan, as revised in 1979, is a vestige of the cold war.
Kane argues that with this one bold stroke, Obama can “correct the country’s course, help assure his re-election, and preserve our children’s future.” It could also “pressure Beijing to end its political and economic support for pariah states like Iran, North Korea and Syria and to exert a moderating influence over an unstable Pakistan.”
Decline-o-meter: Giving this a two for the fact that we’ve gotten to the point where a suggestion like this is being featured on a prominent op-ed page. I’m all for counter-intuitive thinking, and intelligent people can disagree on the wisdom of the current U.S. Taiwan policy, but like most magic bullet solutions to major international crises, this makes absolutely no sense.
1. Why would China take this deal? According to the figures Kane himself cites, Beijing will spend around $500 billion over the next decade on Taiwan-related defense spending. So a $1.14 trillion debt write-off isn’t really a bargain. Obviously Taiwan is a major priority for Beijing. But its trade relationship and relative economic position with the U.S. is a much, much bigger one.
2. U.S. debt is approaching $15 trillion. Lowering that to $14 trillion isn’t going to “save our economy”. And I can’t imagine a write-off on the scale doing wonders for the U.S. credit rating.
3. How exactly will this help Obama’s reelection chances? I’ve always thought the argument that Obama is “selling out” U.S. allies was overblown, but it would be a bit hard to refute if he literally sold a U.S. ally.
4. Even if this deal magically resolved the Taiwan situation, what does that have to do with Iran, North Korea, Syria, or Pakistan — countries where China has completely different interests at stake? If anything, it takes a bargaining chip off the table.
Flawed as it is, the idea got me thinking. Canada holds about $90 billion in U.S. debt. Maybe they’d take a Dakota or two for it.
Update: Via James Fallows, I see that the good folks at Taiwan’s Next Media Animation have weighed in: