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Subs deal has become problematic for White House

The sale of eight submarines US President George W. Bush promised Taiwan in April 2001 to counter the growing threat of China has met a number of obstacles that Washington must overcome, experts said Friday.

The Pentagon considers the yet-to-be-built subs and advanced ground-based anti-missile defense systems necessary to counter Beijing's fast-growing military might.

"These submarines and other parts of the arms package are intended to redress the imbalance that favors China" and any future cross-strait imbalances, said Ronald Rourke, an independent Congressional Research Service analyst.

Quoting Pentagon opinion, he said that the submarines are "one of the armament improvements that [are needed] to give Taiwan a more formidable ability to defend itself against the current and future potential military threat that can be posed by China."

Originally the subs were to be diesel-powered, but the US has not made diesel subs in 50 years and it currently has a totally nuclear-powered submarine fleet. It is therefore looking to foreign suppliers to complete the deal.

Taiwan has already begun making down payments on the subs.

The US Navy favors Germany's HDW, which offers a new hydrogen-tech motor that allows subs to stay under water for much longer periods of time than diesel-propelled subs, and is quieter.

HDW and German shipyard unions are pushing to reel in the US contract, but Randy Belote, an executive with Northrop Grumman, a US contractor and an HDW partner, said that the German government is concerned that taking the contract would rub Beijing the wrong way. The deal is in stasis pending Ger-many's decision on an export license for HDW, Helmut Sonnenfeldt, a Brooking Institution analyst, said.

"If it's not possible for Northrop Grumman to work with HDW on this particular program we would look at other potential sources," said Belote. Israeli shipyards are one alternative, he said.

But a former Pentagon consultant said nothing can match the HDW subs, which he said were ideal for Taiwan.

Belote also acknowledged that Spain's Izar shipyard, a partner of General Dynamics, is also under consideration for the deal because Bush is seeking ways to thank Madrid for joining his "coalition of the willing" in support of the invasion of Iraq, a source close to the Pentagon said.

The US is grappling with other challenges related to arms sales to Taiwan. Taipei is struggling financially in a hobbling economic climate that has been further aggravated by the SARS epidemic.

Aircraft and missles from other proposals have not been delivered or even contracted formally, Michael O'Hanlon, a military expert also at Brookings, said, adding that the Bush administration likely will not back off from previous commitments, but that it is a "very delicate time ... given China's key role to solving the North Korean crisis."
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